Elme Communities (ELME) AI Stock Analysis

• Market Cap: $1.43B
• Dividend Yield: 4.45%
• Average Volume (3M): 719.87K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.58
• Revenue Growth: 5.31%
• EPS Growth: 73.13%
• Country: US
• Employees: 255
• Sector: Real Estate
• Sector Strength: 75
• Industry: REIT - Office
• EPS (TTM): -0.05
• Shares Outstanding: 88,158,650
• 10 Day Avg. Volume: 738,535
• 30 Day Avg. Volume: 719,872
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.42
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 14.09
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $19.00
• Price Target Upside: 17.36% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

Elme Communities' stock score reflects challenges in financial performance due to declining revenues and net losses, offset by strong cash flow management and strategic initiatives. Technical indicators are mixed, with caution advised due to potential overbought conditions. Valuation concerns persist with a negative P/E ratio, but a high dividend yield provides some appeal. Positive momentum from recent earnings calls and strategic initiatives supports resilience against economic uncertainties.

Positive Factors

Market Strength

ELME's apartment portfolio is 84% based in D.C Metro which is one of the strongest performing markets in the country.

Operational Improvements

ELME is in the process of making operational improvements through 2024 and 2025 that should provide $3.4 - $3.8 million in FFO upside.

Strategic Review

The announcement of a strategic review could be a long-term positive for shareholders.

Negative Factors

Management Pressure

The announcement could increase pressure on management to pursue a sale, potentially closing off other strategic avenues.

Office Asset Concern

ELME has one remaining office asset that currently generates 9% of their NOI.

Revenue Growth Pressure

Atlanta has been underperforming due to elevated bad debt and supply that has been putting pressure on same store revenue growth.

Elme Communities Business Overview & Revenue Model

Company Description

Elme Communities owns and operates uniquely positioned real estate assets in the Washington Metro area. Backed by decades of experience, expertise and ambition, we create value by transforming insights into strategy and strategy into action. As of October 29, 2020, the Company's portfolio of 45 properties includes approximately 3.7 million square feet of commercial space and 6,863 multifamily apartment units. These 45 properties consist of 22 multifamily properties,15 office properties, and 8 retail centers. Our shares trade on the NYSE. With a track record of driving returns and delivering satisfaction, we are a trusted authority in one of the nation's most competitive real estate markets.

How the Company Makes Money

Elme Communities generates revenue primarily through the leasing of its residential properties. The company's key revenue streams include rental income from tenants residing in its apartment units and fees associated with property management services. ELME's earnings are significantly influenced by occupancy rates, rental price adjustments, and property appreciation. Additionally, the company may engage in strategic partnerships or joint ventures to enhance its property portfolio and maximize returns. Income from property sales or refinancing activities also contributes to ELME's overall financial performance.

Elme Communities Financial Statement Overview

Summary

Elme Communities faces challenges with revenue decline and persistent net losses, impacting profitability and return metrics. The balance sheet shows increased leverage, raising financial risk, while cash flows remain robust, indicating effective cash management. The company needs to focus on improving revenue growth and profitability to enhance overall financial health.

Income Statement

Elme Communities has shown a declining revenue trend over the years, with a revenue growth rate of -24.68% from 2020 to 2021, followed by modest growth. The gross profit margin is stable but not improving significantly, and the net profit margin remains negative due to consistent net losses. Despite a positive EBITDA margin, the EBIT margin remains a concern. Overall, the income statement reflects challenges in achieving profitability.

Balance Sheet

The company's debt-to-equity ratio has increased over time, indicating higher leverage, which poses a risk. The equity ratio has decreased slightly, reflecting a higher proportion of liabilities in the capital structure. Return on equity is negative due to net losses, suggesting challenges in generating shareholder value. The balance sheet indicates moderate financial stability but highlights increased leverage risks.

Cash Flow

Elme Communities has shown consistent operating cash flows, with a positive free cash flow trend. The free cash flow to net income ratio is strong, indicating efficient cash generation relative to net income losses. The operating cash flow to net income ratio is positive, showing operational efficiency despite net losses. Overall, the cash flow statement reflects solid cash management but underscores the need for improved profitability.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
241.94M	227.91M	209.38M	169.15M	294.12M
	Gross Profit
144.37M	139.97M	127.94M	102.24M	181.21M
	EBIT
23.47M	-23.06M	-1.01M	-484.00K	37.23M
	EBITDA
120.67M	66.40M	90.00M	76.48M	117.02M
	Net Income Common Stockholders
-13.10M	-52.98M	-60.73M	-21.79M	-52.98M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.14M	7.22M	8.39M	233.60M	7.70M
	Total Assets
1.85B	1.90B	1.87B	1.88B	2.41B
	Total Debt
698.95M	679.35M	552.36M	496.95M	987.37M
	Net Debt
692.81M	673.36M	543.97M	263.35M	979.67M
	Total Liabilities
763.68M	745.68M	608.82M	558.93M	1.09B
	Stockholders Equity
1.08B	1.15B	1.26B	1.32B	1.32B
Cash Flow		Free Cash Flow
95.24M	84.67M	34.26M	56.70M	54.67M
	Operating Cash Flow
95.24M	84.67M	73.21M	89.16M	112.99M
	Investing Cash Flow
-43.74M	-146.22M	-241.16M	702.17M	65.76M
	Financing Cash Flow
-51.43M	60.24M	-56.42M	-565.40M	-185.20M

Elme Communities Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 16.19
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ELME, the sentiment is Positive. The current price of 16.19 is above the 20-day moving average (MA) of 15.42, below the 50-day MA of 16.42, and below the 200-day MA of 16.22, indicating a neutral trend. The MACD of -0.14 indicates Negative momentum. The RSI at 56.44 is Neutral, neither overbought nor oversold. The STOCH value of 87.62 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ELME.

Elme Communities Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PGRE	68 Neutral	$1.12B	―	-2.11%	2.98%	1.67%	73.75%
DEA	63 Neutral	$951.09M	51.06	1.32%	12.51%	6.06%	-15.10%
Sector *	60 Neutral	$2.79B	11.29	0.22%	8508.24%	6.33%	-14.20%
ELME	56 Neutral	$1.43B	―	-1.29%	4.45%	5.31%	73.13%
BDN	50 Neutral	$704.27M	―	-18.11%	14.78%	-2.22%	1.51%
JBGS	50 Neutral	$1.32B	―	-8.54%	4.62%	-12.34%	-36.05%
PDM	48 Neutral	$826.07M	―	-3.79%	7.53%	-6.23%	18.07%

Elme Communities Corporate Events

Elme Communities Reports Q1 2025 Financial Results

Elme Communities reported its first-quarter 2025 financial results, highlighting a 5.5% increase in same-store multifamily net operating income (NOI) and a 0.5% rise in average occupancy compared to the previous year. The company maintains a strong balance sheet with significant liquidity and minimal debt maturing before 2028. Elme is also undergoing a strategic review to explore alternatives for maximizing shareholder value. The company reiterated its 2025 guidance, expecting core funds from operations (FFO) per share to range from $0.91 to $0.97, with anticipated revenue growth driven by managed Wi-Fi rollout and declining bad debt in Atlanta.

Spark’s Take on ELME Stock

According to Spark, TipRanks’ AI Analyst, ELME is a Neutral.

Elme Communities’ overall score reflects significant financial challenges, particularly with declining revenues and persistent net losses. While technical indicators suggest bearish momentum, the company shows strengths in cash flow management and strategic governance initiatives. The stock’s valuation also indicates a potential opportunity for income-focused investors, despite concerns about profitability and market dynamics.

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

Elme Communities Appoints Ron D. Sturzenegger to Board

On March 19, 2025, Elme Communities announced the appointment of Ron D. Sturzenegger as an independent trustee to its Board of Trustees, expanding the board to eight members. Sturzenegger, with over 30 years of experience in the real estate industry, will also serve on the transaction committee overseeing strategic alternatives. This appointment is part of Elme’s ongoing efforts to refresh its board composition and maximize shareholder value. Additionally, Elme entered into a cooperation agreement with Argosy-Lionbridge Management, LLC, which includes standstill and voting provisions, and opted out of the Maryland Unsolicited Takeover Act, enhancing its corporate governance practices.

Elme Communities Shifts Focus Amid Financial Review

Elme Communities reported its financial results for the fourth quarter and full year of 2024, showing a net loss but an increase in core funds from operations. The Board of Trustees has initiated a strategic review to maximize shareholder value, highlighting a shift in strategic focus due to shares trading at a discount. The company maintains a strong balance sheet and has set guidance for 2025, anticipating growth driven by strong demand and favorable dynamics in key regions.