California-based Alexandria Equities (ARE) develops and leases office and laboratory spaces. The company that primarily serves the life sciences industry recently signed a 15-year lease agreement to develop a new headquarters and an R&D facility in Cambridge for Moderna (MRNA). (See Insiders’ Hot Stocks on TipRanks)
Let’s have a look at ARE’s third-quarter performance and understand what has changed in its key risk factors that investors should know
Q3 Financial Results
Alexandria reported revenue of $547.8 million for the third quarter of 2021 against $545 million in the same quarter last year. The revenue figure surpassed the consensus estimate of $450.8 million. Further, the company posted adjusted FFO per share of $1.95 against $1.83 in the same quarter last year. The figure was in line with the Street’s expectations.
Meanwhile, during the quarter, the company acquired life science properties worth $989.7 million and added 5.4 million square feet of space to its portfolio. Alexandria ended the quarter with $4 billion of liquidity and no debt maturing before 2024. (See Alexandria Equities stock charts on TipRanks).
According to the new TipRanks’ Risk Factors tool, Alexandria’s mail risk categories are Finance & Corporate, Production, and Legal & Regulatory, which account for 37%, 21% and 19%, respectively, of the total 89 risks identified for the stock. The company recently added three new risks under the Production category.
Alexandria has cautioned investors that global supply chain problems could affect its suppliers and contractors and cause material and labor shortages. Due to this, the company added, it may be unable to complete construction projects within the expected budget and a timely manner to meet tenants’ expectations. Consequently, its reputation and financial performance may get adversely impacted.
The company has told investors that most of its expenses are subject to inflation. It highlights that otherwise lucrative investment opportunities could become less profitable because of the inflation. Alexandria says that due to this its financial performance and ability to pay dividends may take a hit.
The company also underlines that its development projects may get impacted due to climate-related regulations. It mentions that its suppliers of steel, concrete and timber may face expensive requirements that could drive up the costs of these materials. Alexandria points out that completion schedules and the ability to lease space to potential tenants may get impacted.
The Finance and Corporate risk factor’s sector average is at 62.5%, compared to Alexandria’s 37%. Shares of the company have gained about 16% year-to-date.
Recently, Robert W. Baird analyst Dave Rodgers reiterated a Buy rating on the stock with a price target of $218, which implies 5.71% upside potential.
Overall, the stock has a Strong Buy consensus rating based on 5 Buys. The average Alexandria Equities price target of $226.60 implies 9.88% upside potential.