Investment Thesis
Terreno Realty demonstrates strong revenue growth (+24.5% YoY) and exceptional profitability margins (55.8%), supported by conservative leverage (Debt/Equity 0.22x) and robust free cash flow generation. However, critical concerns emerge: net income growth of only +0.4% despite strong revenue expansion signals significant margin compression, while ROE (1.6%) and ROA (1.3%) are dangerously low for an asset-heavy real estate business, suggesting operational efficiency deterioration or asset quality challenges.
Strengths
- Strong top-line growth: 24.5% YoY revenue increase demonstrates market demand and portfolio expansion
- Conservative capital structure: Debt/Equity ratio of 0.22x provides substantial leverage capacity and financial flexibility
- Exceptional cash generation: 49.8% free cash flow margin indicates strong underlying business unit economics despite bottom-line weakness
Risks
- Margin compression: Revenue up 24.5% but net income up only 0.4% indicates deteriorating operating leverage or cost inflation
- Severely depressed returns: ROE of 1.6% and ROA of 1.3% suggest inadequate profitability relative to large asset base; unacceptable for real estate operator
- Data quality gaps: Missing current ratio, quick ratio, operating margin, and capex metrics prevent full liquidity and operational assessment
Key Metrics to Watch
- Operating margin trend: Critical to understand if 24.5% revenue growth can convert to earnings growth
- Return metrics trajectory: Monitor whether ROE/ROA improve; current levels unsustainable for growth validation
- Free cash flow sustainability: Verify if 49.8% FCF margin persists as company scales
Financial Metrics
Revenue
124.4M
Net Income
69.4M
EPS (Diluted)
$0.66
Free Cash Flow
61.9M
Total Assets
5.6B
Cash
87.9M
Profitability Ratios
Gross Margin
N/A
Operating Margin
N/A
Net Margin
55.8%
ROE
1.6%
ROA
1.3%
FCF Margin
49.8%
Balance Sheet & Liquidity
Current Ratio
N/A
Quick Ratio
N/A
Debt/Equity
0.22x
Debt/Assets
22.6%
Interest Coverage
N/A
Long-term Debt
942.0M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-08T12:49:12.525981 |
Data as of: 2026-03-31 |
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