Extra Space Storage (EXR, Financial) reported its first-quarter revenue at $820 million, slightly missing the market expectations of $823.42 million. During this period, the company's same-store revenue saw a modest increase of 0.3%, while its same-store net operating income experienced a decline of 1.2% compared to the previous year.
Despite these mixed results, CEO Joe Margolis highlighted the company's strong performance in beating same-store revenue expectations and sustaining high occupancy rates. Additionally, EXR continued to expand its capital-light ancillary businesses, which contributed to a growth in funds from operations that surpassed internal forecasts. In light of economic uncertainties, the company decided to maintain its same-store guidance for the future. Margolis expressed confidence in EXR's team and strategies, stating that the company is well-prepared to deliver stable cash flow returns even amidst volatile economic conditions.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 17 analysts, the average target price for Extra Space Storage Inc (EXR, Financial) is $161.35 with a high estimate of $181.00 and a low estimate of $141.00. The average target implies an upside of 14.09% from the current price of $141.43. More detailed estimate data can be found on the Extra Space Storage Inc (EXR) Forecast page.
Based on the consensus recommendation from 20 brokerage firms, Extra Space Storage Inc's (EXR, Financial) average brokerage recommendation is currently 2.7, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Extra Space Storage Inc (EXR, Financial) in one year is $162.02, suggesting a upside of 14.56% from the current price of $141.43. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Extra Space Storage Inc (EXR) Summary page.
EXR Key Business Developments
Release Date: February 26, 2025
- Core FFO (Q4 2024): $2.03 per share
- Full Year Core FFO (2024): $8.12 per share
- Same-Store Revenue (Q4 2024): Decrease of 0.4%
- Same-Store NOI (Q4 2024): Negative 3.5%
- Property Taxes Impact: Higher than estimated, contributing to 9.5% increase in same-store expenses
- Investment in 2024: $950 million in joint ventures, structured, and wholly owned investments
- Bridge Loan Origination (Q4 2024): $224 million
- Total Bridge Loan Origination (2024): $980 million
- Third-Party Management Growth (Q4 2024): 114 net new stores
- Total Net New Managed Stores (2024): 238 stores
- Bond Reopenings (Q4 2024): $300 million
- Bond Reopenings (Q1 2025): $350 million
- Commercial Paper Program Initiation (Q4 2024): $1 billion
- 2025 Core FFO Guidance: $8 to $8.30 per share
- 2025 Same-Store Revenue Guidance: Negative 0.75% to positive 1.25%
- 2025 Same-Store Expense Growth Guidance: Positive 3.75% to 5.25%
- 2025 Same-Store NOI Guidance: Negative 3% to positive 0.25%
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Extra Space Storage Inc (EXR, Financial) reported core FFO of $2.03 per share for Q4 2024, slightly ahead of internal expectations.
- The company maintained near-record occupancy levels, indicating strong demand and operational efficiency.
- Extra Space Storage Inc (EXR) successfully integrated Life Storage stores into its brand, resulting in marketing savings and increased rental activity.
- The company invested $950 million in joint ventures and other investments in 2024, with a significant portion occurring in Q4, showcasing robust external growth strategies.
- Extra Space Storage Inc (EXR) expanded its third-party management program significantly, adding 238 net new managed stores in 2024, marking its best growth year in this segment.
Negative Points
- Same-store revenue decreased by 0.4% in Q4 2024 due to lower new customer rates, despite strong occupancy.
- Property taxes exceeded expectations, contributing to a same-store NOI decline of 3.5% in the quarter.
- The company faces challenges in regaining pricing power with new customers, impacting revenue growth potential.
- Guidance for 2025 includes a potential 20-basis-point revenue headwind due to state of emergency restrictions in Los Angeles County.
- Property tax increases in states like Georgia, Illinois, and Indiana are expected to continue, with a budgeted increase of 6% to 8% for 2025.
