CubeSmart (CUBE, Financial) reported impressive first-quarter financial results, surpassing analyst projections. The company achieved a revenue of $273.036 million, outpacing the consensus estimate of $266.67 million. This strong performance was attributed to increased demand, leading to improved occupancy and pricing trends. The President and CEO highlighted the company's robust portfolio, emphasizing its strategic position in premium markets, which aids in navigating challenging economic conditions.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 15 analysts, the average target price for CubeSmart (CUBE, Financial) is $45.13 with a high estimate of $50.00 and a low estimate of $39.00. The average target implies an upside of 10.22% from the current price of $40.95. More detailed estimate data can be found on the CubeSmart (CUBE) Forecast page.
Based on the consensus recommendation from 18 brokerage firms, CubeSmart's (CUBE, Financial) average brokerage recommendation is currently 2.8, 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 CubeSmart (CUBE, Financial) in one year is $46.50, suggesting a upside of 13.55% from the current price of $40.95. 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 CubeSmart (CUBE) Summary page.
CUBE Key Business Developments
Release Date: February 28, 2025
- Same Store NOI: Declined 3.7% in the fourth quarter.
- Same Store Revenue Growth: 1.6% for the quarter.
- Same Store Occupancy: Dropped 120 basis points on average compared to last year.
- Same Store Expenses: Grew 4.7% during the quarter, with real estate taxes increasing by 17.5%.
- FFO per Share Adjusted: Reported at $0.68 for the quarter.
- Dividend Increase: 2% increase to an annualized $2.08 per share, representing a 4.9% yield.
- Store Acquisitions: Closed acquisitions in Oregon and Pennsylvania for $22 million, and an 85% interest in a 14-store portfolio in Dallas MSA.
- Joint Venture Acquisition: Acquired remaining 80% interest in HPP4 joint venture, totaling $452.8 million in consideration.
- Equity Capital Raised: $85.6 million in net proceeds during the quarter, $118.3 million year-to-date, with an average sales price of $51.25 per share.
- 2025 FFO per Share Guidance: Range of $2.50 to $2.59, with a midpoint of $2.54.5, down from $2.63 in 2024.
- 2025 Same Store NOI Guidance: Midpoint expectation down 3%.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CubeSmart (CUBE, Financial) reported an improvement in year-over-year same-store revenue growth, indicating a potential inflection point in the trend of decelerating growth.
- The company successfully closed a joint venture investment by acquiring its partner's interest, enhancing its portfolio with recently constructed assets in tier-one markets.
- CubeSmart (CUBE) raised equity capital at attractive valuations, which was used to fund strategic acquisitions, demonstrating effective capital management.
- The company's New York City market continues to outperform, remaining a top growth area with no new supply expected in key boroughs.
- CubeSmart (CUBE) announced a 2% increase in its quarterly dividend, reflecting confidence in its financial stability and commitment to returning value to shareholders.
Negative Points
- Same-store NOI declined by 3.7% in the fourth quarter, driven by pressure on asking rates and a drop in occupancy levels.
- Real estate taxes increased significantly by 17.5% in the fourth quarter, impacting overall expenses.
- The company does not foresee an obvious catalyst for sharp re-acceleration of organic growth in 2025, indicating cautious revenue expectations.
- CubeSmart (CUBE) anticipates continued pressure on property insurance costs, contributing to expense challenges.
- The company's guidance for 2025 reflects a potential decline in FFO per share, primarily due to expected performance of the core same-store portfolio.
