Kilroy Realty (KRC) AI Stock Analysis

• Market Cap: $3.87B
• Dividend Yield: 6.66%
• Average Volume (3M): 1.69M
• Price to Earnings (P/E): 18.3
• Beta (1Y): 1.23
• Revenue Growth: 0.53%
• EPS Growth: -1.38%
• Country: US
• Employees: 229
• Sector: Real Estate
• Sector Strength: 79
• Industry: REIT - Office
• EPS (TTM): 0.33
• Shares Outstanding: 118,268,760
• 10 Day Avg. Volume: 1,136,956
• 30 Day Avg. Volume: 1,691,220
• 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: 2.24
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 11.06
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $38.67
• Price Target Upside: 21.30% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 13

Kilroy Realty's overall stock score reflects stable financial performance with strong balance sheet attributes and a moderate valuation. While technical analysis indicates a lack of momentum, the high dividend yield provides a buffer against challenges highlighted in the earnings call, such as occupancy declines and financial performance concerns. Strategic corporate events further support the company's growth potential.

Positive Factors

Financial Performance

Q4 FFO beat expectations, indicating strong financial performance for the quarter.

Leasing Activity

Leasing activity was the strongest in five and a half years.

Portfolio Valuation

The -15% YTD sell-off in KRC shares presents the opportunity to gain exposure to a high quality portfolio at a low valuation.

Negative Factors

Financial Forecast

Forecast for core FFO year-over-year growth is negative for 2025 and 2026, with estimates below consensus, indicating potential challenges for KRC.

Market Demand

Weaker office demand following the pandemic has led to low retention and downsizings by tenants, especially on the West Coast, creating a persistently elevated amount of available office space in KRC’s key markets.

Occupancy

Occupancy continued to erode, active developments remain unleased, and 2025 guidance suggests tenant retention could fall short of the 30% level achieved in 2024.

Kilroy Realty Business Overview & Revenue Model

Company Description

Kilroy Realty Corporation (NYSE: KRC, the company, KRC) is a leading West Coast landlord and developer, with a major presence in San Diego, Greater Los Angeles, the San Francisco Bay Area, and the Pacific Northwest. The company has earned global recognition for sustainability, building operations, innovation and design. As pioneers and innovators in the creation of a more sustainable real estate industry, the company's approach to modern business environments helps drive creativity, productivity and employee retention for some of the world's leading technology, entertainment, life science and business services companies. KRC is a publicly traded real estate investment trust (REIT) and member of the S&P MidCap 400 Index with more than seven decades of experience developing, acquiring and managing office and mixed-use projects. As of September 30, 2020, KRC's stabilized portfolio totaled approximately 14.3 million square feet of primarily office and life science space that was 92.2% occupied and 95.5% leased. The company also had 808 residential units in Hollywood and San Diego, which had a quarterly average occupancy of 85.0% and 37.5%, respectively. In addition, KRC had seven in-process development projects with an estimated total investment of $1.9 billion, totaling approximately 2.3 million square feet of office and life science space. The office and life science space was 90% leased.

How the Company Makes Money

Kilroy Realty generates revenue primarily through leasing office and mixed-use space to tenants. The company's income is derived from long-term lease agreements, providing a stable and predictable cash flow. As a REIT, Kilroy Realty benefits from favorable tax treatment, as it is required to distribute at least 90% of its taxable income to shareholders in the form of dividends. Additionally, the company actively engages in property development and acquisition, which can lead to increased rental income and capital appreciation over time. Kilroy Realty also focuses on maintaining high occupancy rates and managing operational costs effectively to maximize profitability. Strategic partnerships and relationships with key tenants in technology and creative industries further contribute to Kilroy's financial performance.

Kilroy Realty Financial Statement Overview

Summary

Kilroy Realty's financial health is stable, with steady revenue growth and efficient cost management despite a decline in profitability. The balance sheet shows strong equity with no current debt, reducing financial risk. Cash flow analysis indicates adequate cash generation but modest conversion to free cash flow.

Income Statement

Kilroy Realty's income statement shows moderate revenue growth of 0.5% from the previous year, indicating stability in its operations. The gross profit margin stands at 52.2%, reflecting efficient cost management. However, the net profit margin has decreased to 12.9% from 18.8% last year, highlighting a decline in profitability. The EBIT margin is 21.7%, which is relatively stable, but the EBITDA margin has decreased to 53.2%, suggesting increased operating expenses.

Balance Sheet

Kilroy Realty's balance sheet demonstrates strong equity with a debt-to-equity ratio of 0, indicating no reliance on debt financing for the current period. The company's equity ratio is 42.5%, reflecting a solid equity base. Return on equity has decreased to 2.7% from last year’s 3.9%, pointing to reduced profitability on equity. Overall, the balance sheet remains robust with low financial risk.

Cash Flow

The cash flow statement reveals a decline in free cash flow growth, with a significant increase to $151 million from last year's $59 million, representing a growth rate of 155.8%. The operating cash flow to net income ratio is 3.7, indicating strong cash generation relative to net income. However, free cash flow to net income ratio is only 1.03, suggesting limited conversion of profits to free cash flow.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.14B	1.13B	1.10B	955.04M	898.40M
	Gross Profit
783.24M	778.62M	775.93M	685.46M	637.68M
	EBIT
-2.06M	329.91M	326.44M	286.58M	242.53M
	EBITDA
354.12M	686.21M	684.05M	596.63M	538.41M
	Net Income Common Stockholders
-19.92M	212.24M	175.22M	628.14M	116.33M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
193.66M	794.83M	370.93M	441.55M	759.47M
	Total Assets
12.66B	11.40B	10.80B	10.58B	10.00B
	Total Debt
4.73B	5.05B	4.39B	4.19B	4.02B
	Net Debt
4.56B	4.54B	4.04B	3.78B	3.29B
	Total Liabilities
5.29B	5.74B	5.12B	4.89B	4.72B
	Stockholders Equity
5.38B	5.43B	5.44B	5.44B	5.03B
Cash Flow		Free Cash Flow
40.17M	58.77M	5.63M	-1.28B	-160.47M
	Operating Cash Flow
541.15M	602.59M	592.24M	516.40M	455.59M
	Investing Cash Flow
-225.04M	-800.40M	-553.19M	-747.88M	-542.13M
	Financing Cash Flow
-660.58M	360.60M	-118.75M	-164.57M	833.32M

Kilroy Realty Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 31.88
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For KRC, the sentiment is Negative. The current price of 31.88 is above the 20-day moving average (MA) of 31.30, below the 50-day MA of 32.44, and below the 200-day MA of 35.79, indicating a neutral trend. The MACD of -0.06 indicates Negative momentum. The RSI at 49.17 is Neutral, neither overbought nor oversold. The STOCH value of 48.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for KRC.

Kilroy Realty Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CUZ	67 Neutral	$4.74B	84.32	1.15%	4.53%	10.93%	-31.07%
KRC	65 Neutral	$3.87B	18.33	3.87%	6.66%	0.53%	-1.38%
HIW	65 Neutral	$3.15B	18.26	7.21%	6.85%	-2.01%	31.64%
Sector *	60 Neutral	$2.95B	11.32	0.26%	8508.24%	6.34%	-14.00%
SLG	58 Neutral	$4.21B	663.10	-0.13%	5.48%	13.36%	94.82%
BXP	56 Neutral	$11.32B	732.74	-0.10%	6.03%	3.74%	-102.51%
DEI	52 Neutral	$2.94B	109.37	1.03%	5.25%	-3.33%	―

Kilroy Realty Corporate Events

Kilroy Realty Reports Strong Q1 2025 Financial Results

On May 5, 2025, Kilroy Realty Corporation reported its financial results for the first quarter ended March 31, 2025, highlighting a strong start to the year despite market volatility. The company achieved revenues of $270.8 million and a net income of $39.0 million, with significant leasing activity and progress in its development projects. Kilroy also announced an agreement to sell a portion of its Santa Fe Summit site, which is expected to close in 2026, indicating strategic moves to monetize its land assets.

Spark’s Take on KRC Stock

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

Kilroy Realty’s overall stock score reflects stable financial performance, strong balance sheet, and moderate valuation. However, the technical analysis shows lack of momentum, and the earnings call highlights challenges in occupancy and future financial performance. The attractive dividend yield provides a buffer against these challenges.

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

Kilroy Realty Reports Strong Q4 2024 Financial Results

Kilroy Realty Corporation announced its financial results for the fourth quarter and full year ending December 31, 2024, reporting strong leasing performance with over 700,000 square feet signed in Q4, the highest since 2019. The company achieved an increase in revenues and net income compared to the previous year, indicating a robust recovery in its markets, and completed key developments such as Kilroy Oyster Point Phase 2 and a strategic PropTech investment.