Paramount Group (PGRE) AI Stock Analysis

• Market Cap: $2.24B
• Dividend Yield: 3.08%
• Average Volume (3M): 2.84M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.06
• Revenue Growth: 1.67%
• EPS Growth: 73.75%
• Country: US
• Employees: 316
• Sector: Real Estate
• Sector Strength: 81
• Industry: REIT - Office
• EPS (TTM): -0.05
• Shares Outstanding: 219,225,080
• 10 Day Avg. Volume: 2,357,640
• 30 Day Avg. Volume: 2,838,086
• 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: 2.25
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 11.09
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $4.44
• Price Target Upside: -2.42% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

Paramount Group's stock receives a score of 68, reflecting a blend of strengths and challenges. Strong financial performance and positive technical indicators are counterbalanced by valuation concerns due to negative earnings. The recent earnings call indicates robust leasing activity, especially in New York, but challenges persist in San Francisco. The strategic sale of a property stake supports liquidity and strategic goals.

Positive Factors

Asset Sale

Proceeds from the sale of a 45% stake in 900 Third Ave should help strengthen the balance sheet which is incrementally positive.

Financial Performance

Q1 FFO beat and FFO guidance was reiterated, while the leasing outlook was improved.

Leasing Performance

Leasing volume increased significantly from the previous quarter and long-term average.

Negative Factors

Interest Expenses

Higher interest expense anticipated due to increased swap expenses, impacting financial performance projections.

Lease Expiration

Several large tenant move-outs, such as Google and JP Morgan, result in significant expiration of leases, reducing expected income.

Net Operating Income

PGRE's -9% SS NOI outlook implies meaningful headwinds in '25.

Paramount Group Business Overview & Revenue Model

Company Description

Headquartered in New York City, Paramount Group, Inc. is a fully-integrated real estate investment trust that owns, operates, manages, acquires and redevelops high-quality, Class A office properties located in select central business district submarkets of New York City and San Francisco. Paramount is focused on maximizing the value of its portfolio by leveraging the sought-after locations of its assets and its proven property management capabilities to attract and retain high-quality tenants.

How the Company Makes Money

Paramount Group generates revenue primarily through leasing office space in its strategically located properties to a variety of tenants, including corporations, government entities, and other businesses. The company's revenue model is based on long-term lease agreements that provide a steady stream of rental income. In addition to base rent, Paramount may also earn income through tenant reimbursements for operating expenses and real estate taxes. The company actively manages and upgrades its properties to increase occupancy rates and rental rates, thereby maximizing its revenue potential. Furthermore, Paramount Group may engage in strategic property acquisitions and dispositions to enhance its portfolio and drive growth. Key factors contributing to its earnings include market demand for premium office space, effective property management, and maintaining high occupancy levels.

Paramount Group Financial Statement Overview

Summary

Paramount Group shows moderate revenue growth and strong cash flow, but struggles with profitability due to negative net income. The balance sheet is robust with a solid equity base, though profitability metrics are affected by negative earnings.

Income Statement

Paramount Group's revenue has shown a moderate growth trajectory with a 1.97% increase from 2022 to 2023. However, the company is facing challenges in achieving profitability, as evidenced by negative net income figures. The gross profit margin is robust at 59.95% (2023), indicating efficient cost management, but the net profit margin remains negative due to significant non-operating expenses or other factors. EBIT and EBITDA margins are reasonable, reflecting steady operational performance.

Balance Sheet

The balance sheet shows a solid equity base, with stockholders' equity at $4,009.5 million as of 2023, resulting in a healthy equity ratio of 50.91%. The debt-to-equity ratio stands at 0.92, suggesting a balanced use of debt and equity. While the company maintains a stable asset base, the negative net income impacts return on equity, which is currently non-positive. The overall leverage appears manageable, but continuous monitoring is advised.

Cash Flow

Operating cash flow remains strong at $264.93 million in 2023, demonstrating effective cash generation from core operations. Free cash flow has shown resilience with a positive year-over-year growth rate of 119.19% from 2022 to 2023. The operating cash flow to net income ratio is high due to negative net income, indicating a divergence between cash generation and accounting profitability. This is a common scenario in capital-intensive industries like REITs.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
757.45M	742.79M	740.38M	726.79M	714.24M
	Gross Profit
454.17M	198.18M	462.95M	461.35M	446.65M
	EBIT
148.30M	136.19M	121.64M	148.63M	120.96M
	EBITDA
387.84M	27.54M	354.15M	381.12M	356.85M
	Net Income Common Stockholders
-46.29M	-259.74M	-28.20M	2.06M	-14.12M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
375.06M	428.21M	408.90M	524.90M	434.53M
	Total Assets
7.87B	8.01B	8.45B	8.49B	8.55B
	Total Debt
3.68B	3.80B	3.84B	3.84B	3.80B
	Net Debt
3.30B	3.38B	3.43B	3.31B	3.37B
	Total Liabilities
3.86B	3.99B	4.04B	4.04B	4.04B
	Stockholders Equity
3.14B	3.20B	3.59B	3.59B	3.65B
Cash Flow		Free Cash Flow
264.93M	277.86M	120.83M	132.31M	237.01M
	Operating Cash Flow
264.93M	277.86M	246.64M	244.31M	237.27M
	Investing Cash Flow
-109.11M	-113.09M	-152.58M	-103.48M	40.03M
	Financing Cash Flow
-109.97M	-57.98M	-173.90M	-76.48M	-143.47M

Paramount Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4.55
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PGRE, the sentiment is Positive. The current price of 4.55 is above the 20-day moving average (MA) of 4.39, above the 50-day MA of 4.26, and below the 200-day MA of 4.73, indicating a neutral trend. The MACD of 0.10 indicates Negative momentum. The RSI at 56.29 is Neutral, neither overbought nor oversold. The STOCH value of 76.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PGRE.

Paramount Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PGRE	68 Neutral	$2.24B	―	-2.11%	3.08%	1.67%	73.75%
HIW	65 Neutral	$3.15B	18.27	7.21%	6.78%	-2.01%	31.64%
DEA	63 Neutral	$911.57M	48.96	1.32%	13.08%	6.06%	-15.10%
Sector *	60 Neutral	$2.80B	11.09	0.20%	8508.36%	6.13%	-16.84%
SLG	58 Neutral	$4.16B	663.10	-0.13%	5.47%	13.36%	94.82%
DEI	58 Neutral	$2.85B	106.88	2.51%	5.24%	-1.98%	―
PDM	48 Neutral	$809.90M	―	-3.79%	7.68%	-6.23%	18.07%

Paramount Group Corporate Events

Paramount Group Sells Stake in San Francisco Property

On May 7, 2025, Paramount Group, Inc. announced the sale of a 25% interest in One Front Street, a Class A office building in San Francisco, valued at $255 million. The company will retain a 75% stake and continue managing the property. This transaction, which included $40.5 million in seller financing, resulted in net proceeds of $11.5 million for Paramount. The sale aligns with the company’s confidence in San Francisco’s market potential, bolstered by urban renewal initiatives, and aims to reposition the asset for future lease-up phases.

Spark’s Take on PGRE Stock

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

Paramount Group’s overall score reflects a mix of strengths and challenges. The company’s robust cash flow and strong leasing performance in New York are major positives. However, profitability issues and valuation concerns due to negative earnings, coupled with challenges in the San Francisco market, temper the overall outlook.

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

Paramount Group Announces Board Member Retirement

On March 24, 2025, Katharina Otto-Bernstein, a long-serving member of the Board of Directors of Paramount Group, Inc., announced her retirement and decision not to seek reelection at the company’s 2025 Annual Meeting of Stockholders. Her departure is not due to any disagreements with the company or its management. The company plans to reduce the number of directors to eight following the 2025 Annual Meeting.

Paramount Group Updates Executive Employment Agreements

On March 10, 2025, Paramount Group, Inc. entered into new employment agreements with Wilbur Paes, the Chief Operating Officer, Chief Financial Officer, and Treasurer, and Peter Brindley, the Executive Vice President, Head of Real Estate. These agreements replace their previous contracts set to expire on March 31, 2025, and include terms for automatic one-year renewals unless notice is given. The agreements also feature non-competition and non-solicitation clauses extending beyond their employment terms, impacting the company’s executive stability and strategic continuity.