NETSTREIT (NTST) AI Stock Analysis

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NETSTREIT

(NYSE:NTST)

71Outperform

NETSTREIT's overall score of 71 reflects its solid financial foundation with strong cash flow generation and operational improvements. The positive momentum in technical indicators and attractive dividend yield are strengths. However, challenges with profitability and a high P/E ratio weigh on the valuation. Positive earnings call sentiment and strategic execution provide a favorable outlook, despite market uncertainties.

Positive Factors

Asset Quality

Netstreit Corp. has a high concentration of investment-grade assets, which strengthens its financial stability.

Financial Performance

The company's adjusted funds from operations per share slightly exceeded consensus expectations.

Valuation

NTST trades below the private market value of its portfolio, indicating potential for positive valuation adjustments.

Negative Factors

Investment Activity

NTST's high WACC (>8% ICR) / tighter investment spreads (<100bps) have limited its ability to raise and deploy capital.

Market Concerns

Investor concern exists around negative headlines affecting some of NTST's key tenants, impacting the stock.

Tenant Base

NTST’s IG-rated tenant base declined to 55.8% of ABR from 60.9% last quarter.

NETSTREIT (NTST) vs. S&P 500 (SPY)

Market Cap

$1.30B

Dividend Yield5.28%

Average Volume (3M)1.07M

Price to Earnings (P/E)―

Beta (1Y)0.63

Revenue Growth21.91%

EPS Growth-257.05%

CountryUS

Employees22

SectorReal Estate

Sector Strength82

IndustryREIT - Retail

Share Statistics

EPS (TTM)0.02

Shares Outstanding81,706,090

10 Day Avg. Volume964,583

30 Day Avg. Volume1,074,156

Financial Highlights & Ratios

PEG Ratio-18.68

Price to Book (P/B)1.01

Price to Sales (P/S)0.00

P/FCF Ratio17.46

Enterprise Value/Market Cap1.73

Enterprise Value/Revenue3.78

Enterprise Value/Gross Profit15.13

Enterprise Value/Ebitda5.48

Forecast

1Y Price Target

$18.06

Price Target Upside14.30% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering9

NETSTREIT Business Overview & Revenue Model

Company DescriptionNETSTREIT is an internally managed Real Estate Investment Trust (REIT) based in Dallas, Texas that specializes in acquiring single-tenant net lease retail properties nationwide. The growing portfolio consists of high-quality properties leased to e-commerce resistant tenants with healthy balance sheets. Led by a management team of seasoned commercial real estate executives, NETSTREIT's strategy is to create the highest quality net lease retail portfolio in the country with the goal of generating consistent cash flows and dividends for its investors.

How the Company Makes MoneyNETSTREIT makes money by acquiring and leasing out single-tenant retail properties under net lease agreements. These leases often require tenants to pay a significant portion of the property's operating expenses, such as maintenance, insurance, and taxes, in addition to the base rent. This structure allows NETSTREIT to generate stable and predictable rental income while minimizing its exposure to property-related expenses. The company's revenue streams are primarily derived from these rental payments. Additionally, NETSTREIT's growth strategy involves acquiring properties with strong tenants and favorable lease terms, which can enhance its income and asset value over time.

NETSTREIT Financial Statement Overview

Summary

NETSTREIT demonstrates solid revenue growth and operational improvements, particularly in EBIT and EBITDA margins. Despite these strengths, the company faces challenges with profitability, as seen in the negative net income. The balance sheet is stable, supported by a reasonable debt level, though there is a slight decline in equity ratio. Cash flows are a strong point, with consistent operating cash flow and free cash flow generation, supporting future growth investments. Overall, while there are profitability concerns, the company's financial position remains sound.

Income Statement

Positive

The company shows consistent revenue growth, with a notable increase in total revenue from previous years. However, the net profit margin is negative in the TTM period, indicating current profitability challenges. The EBIT and EBITDA margins show improvement, suggesting operational efficiencies despite the net income loss.

Balance Sheet

Positive

The balance sheet reflects a strong equity base with a stable debt-to-equity ratio, indicating moderate leverage. However, the equity ratio has decreased slightly over the years, suggesting increased liabilities relative to assets. Return on equity is low due to negative net income, which is a concern for investors.

Cash Flow

Positive

The cash flow statement highlights positive operating cash flows with a significant increase over the years, indicating strong cash generation capabilities. Free cash flow remains robust, although growth has varied. The operating cash flow to net income ratio is strong, reflecting efficient cash management.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
161.01M	150.00M	123.12M	96.28M	59.14M	33.73M
	Gross Profit
148.58M	133.80M	106.25M	84.58M	53.34M	31.16M
	EBIT
41.31M	37.21M	24.10M	15.59M	8.15M	4.35M
	EBITDA
108.79M	98.24M	95.65M	65.66M	38.96M	19.81M
	Net Income Common Stockholders
-11.29M	-11.94M	6.84M	8.12M	3.05M	-4.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
22.33M	14.32M	18.43M	70.54M	7.60M	92.64M
	Total Assets
2.03B	2.26B	1.95B	1.61B	1.07B	725.82M
	Total Debt
734.01M	894.28M	640.25M	524.32M	261.65M	191.03M
	Net Debt
711.67M	879.96M	621.82M	453.78M	254.04M	98.39M
	Total Liabilities
756.39M	921.21M	672.80M	547.27M	278.63M	197.74M
	Stockholders Equity
1.26B	1.33B	1.26B	1.05B	779.17M	494.10M
Cash Flow		Free Cash Flow
75.57M	90.16M	80.12M	49.44M	30.75M	12.70M
	Operating Cash Flow
100.60M	90.16M	80.16M	50.65M	31.48M	12.75M
	Investing Cash Flow
-383.98M	-432.88M	-451.95M	-468.36M	-430.13M	-362.13M
	Financing Cash Flow
275.25M	327.10M	331.18M	480.65M	313.61M	272.71M

NETSTREIT Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price15.80

Price Trends

50DMA

15.52

Positive

100DMA

14.80

Positive

200DMA

15.23

Positive

Market Momentum

MACD

0.14

Positive

RSI

49.52

Neutral

STOCH

54.94

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NTST, the sentiment is Neutral. The current price of 15.8 is below the 20-day moving average (MA) of 16.04, above the 50-day MA of 15.52, and above the 200-day MA of 15.23, indicating a neutral trend. The MACD of 0.14 indicates Positive momentum. The RSI at 49.52 is Neutral, neither overbought nor oversold. The STOCH value of 54.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for NTST.

NETSTREIT Risk Analysis

NETSTREIT disclosed 49 risk factors in its most recent earnings report. NETSTREIT reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

NETSTREIT Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GTY	74 Outperform	$1.58B	23.61	7.23%	6.43%	7.80%	4.15%
IVT	73 Outperform	$2.24B	127.36	1.07%	3.26%	7.45%	119.81%
NTST	71 Outperform	$1.30B	―	-0.88%	5.28%	21.91%	-257.05%
WSR	70 Outperform	$1.29B	21.05	7.33%	3.98%	4.39%	24.45%
BFS	63 Neutral	$809.77M	22.69	13.86%	7.14%	5.00%	-14.72%
Sector *	60 Neutral	$2.82B	11.08	0.22%	8543.15%	6.09%	-16.11%
PINE	59 Neutral	$217.71M	165.69	0.47%	7.38%	14.71%	―

* Real Estate Sector Average

Performance Comparison

NTST

NETSTREIT

15.80

-1.13

-6.67%

GTY

Getty Realty

28.53

2.15

8.15%

BFS

Saul Centers

33.47

-0.92

-2.68%

WSR

Whitestone REIT

12.58

0.47

3.88%

IVT

InvenTrust Properties

28.33

4.07

16.78%

PINE

Alpine Income Property Trust Inc

15.26

0.30

2.01%

NETSTREIT Earnings Call Summary

Earnings Call Date:Apr 28, 2025

(Q1-2025)

% Change Since: 0.96%|

Next Earnings Date:Jul 24, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong investment activity, portfolio diversification efforts, zero credit losses, and improved financial performance, suggesting solid operational execution. However, the investment pace was deliberately measured due to market uncertainties and cost of capital concerns. Overall, positive developments outweigh the challenges.

Q1-2025 Updates

Positive Updates

Strong Investment Activity

NETSTREIT completed $90.7 million of gross investments at a blended cash yield of 7.7% with a weighted average lease term of 9.2 years. 66% of ABR came from investment grade and investment grade profile tenants.

Portfolio Diversification

Successfully reduced top five tenant concentration by 70 basis points to 28.2% of ABR, including a 50 basis point reduction in Dollar General concentration.

No Credit Losses

Reported zero credit losses during the quarter, maintaining a strong track record of credit performance.

Financial Performance and Increased Guidance

Core FFO for the quarter was $24.6 million or $0.30 per diluted share, and AFFO was $26.2 million or $0.32 per diluted share, a 3.2% increase over last year. Guidance for AFFO per share was increased to $1.28 to $1.30.

Capital Markets Activity

Closed on $275 million of additional financing commitments, including a new $175 million term loan and an upsized $500 million revolving credit facility.

Negative Updates

Measured Investment Pace

The investment pace remains more measured versus prior years to maintain a low leverage balance sheet and ensure cost of capital reflects portfolio strength.

Uncertainty in Transaction Market

Ongoing uncertainty in the market has made it difficult for some companies to make decisions, impacting the speed of investment and disposition activities.

Company Guidance

During the first quarter of 2025, NETSTREIT Corp. focused on diversifying its portfolio and maintaining a low leverage balance sheet. The company completed $90.7 million of gross investments at a blended cash yield of 7.7%, with a weighted average lease term of 9.2 years. Investment grade or investment grade profile tenants constituted 66% of the annual base rent (ABR) for these investments. The company also disposed of properties worth $40.3 million at a 7.3% blended cash yield. As a result, NETSTREIT's portfolio included 695 properties leased to 101 tenants across 26 industries in 45 states, with 71% of the total ABR leased to investment grade or investment grade profile tenants. The weighted average lease term remained at 9.7 years, with just 1.3% of ABR expiring through 2026. The company's top five tenant concentration decreased to 28.2% of ABR. Financially, NETSTREIT reported net income of $1.7 million, core funds from operations (FFO) of $24.6 million, and adjusted FFO (AFFO) of $26.2 million, representing a 3.2% increase over the previous year. The company updated its AFFO per share guidance to $1.28 to $1.30 for 2025, assuming net investment activity between $75 million and $125 million.

NETSTREIT Corporate Events

Private Placements and FinancingBusiness Operations and StrategyFinancial Disclosures

NETSTREIT Reports Q1 2025 Financial Results

Positive

Apr 28, 2025

On April 28, 2025, NETSTREIT Corp. announced its financial and operating results for the first quarter ending March 31, 2025. The company reported a net income of $0.02 and adjusted funds from operations (AFFO) of $0.32 per diluted share. During the quarter, NETSTREIT completed $90.7 million in gross investment activity with a 7.7% blended cash yield and closed $275 million in additional financing commitments. The company also increased its 2025 AFFO per share guidance to a new range of $1.28 to $1.30, reflecting its strategic focus on capital recycling and portfolio diversification.

Spark’s Take on NTST Stock

According to Spark, TipRanks’ AI Analyst, NTST is a Outperform.

NTST’s strong revenue growth, no debt, and positive operating cash flow are key strengths. However, challenges in profitability and tenant issues present risks. The technical indicators suggest positive momentum, while valuation metrics offer mixed signals due to high P/E and a good dividend yield. Strategic corporate actions and earnings call insights add to the outlook, but profitability issues weigh on the score.

To see Spark’s full report on NTST stock, click here.

Private Placements and FinancingBusiness Operations and StrategyFinancial Disclosures

NETSTREIT Reports Q4 2024 Results and 2025 Outlook

Neutral

Feb 24, 2025

On February 24, 2025, NETSTREIT Corp. reported its financial and operating results for the fourth quarter and full year ending December 31, 2024. The company achieved a record gross investment activity of $195.1 million at a 7.4% cash yield during the fourth quarter and introduced a 2025 AFFO per share guidance of $1.27 to $1.30. Despite reporting a net loss of $0.07 per diluted share for the fourth quarter, NETSTREIT completed significant capital recycling and closed $275 million in additional financing commitments in January 2025, positioning itself for future growth with a focus on enhancing tenant diversity and internal growth.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.