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Postal Realty Trust Inc (PSTL)
NYSE:PSTL
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Postal Realty
(NYSE:PSTL)
Rating:75Outperform
Price Target:
$15.00
▲( 14.50% Upside)
Positive Factors
Acquisition Activity
Postal Realty Trust has been active in acquiring properties, which suggests growth opportunities in the acquisition market.
Financial Performance
The company reported higher-than-expected FFO and AFFO, indicating strong financial performance.
Lease Agreements
PSTL agreed to new rents on all negotiated leases with the USPS for leases that expired and those set to expire in 2026, which include +3% lease escalators.
Negative Factors
Executive Order Risk
The President could issue an executive order to dissolve the leadership of the US Postal Service, potentially placing the agency under the control of the Commerce Department.
Federal Budget Risks
Analyst maintains a HOLD rating due to in-line growth, fair relative valuation, and potential risks from federal government budget cuts.
Privatization Concerns
There have been reports of the possible privatization of the Post Office, which could cause some uncertainty in future cash flows.
Postal Realty (PSTL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$387.32M
Dividend Yield7.18%
Average Volume (3M)202.43K
Price to Earnings (P/E)47.8
Beta (1Y)0.23
Revenue Growth23.51%
EPS Growth167.49%
CountryUS
Employees45
SectorReal Estate
Sector Strength62
IndustryREIT - Office
Share Statistics
EPS (TTM)0.06
Shares Outstanding23,805,546
10 Day Avg. Volume201,124
30 Day Avg. Volume202,426
Financial Highlights & Ratios
PEG Ratio1.09
Price to Book (P/B)1.20
Price to Sales (P/S)0.00
P/FCF Ratio8.51
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$15.50Price Target Upside18.32% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
Postal Realty Business Overview & Revenue Model
Company DescriptionPostal Realty Trust, Inc. is an internally managed real estate investment trust that owns and manages over 1,000 properties leased to the USPS. The Company believes it is one of the largest owners and managers of properties leased to the USPS.
How the Company Makes MoneyPostal Realty Trust, Inc. generates revenue primarily through rental income from its portfolio of properties leased to the USPS. As a REIT, the company is required to distribute a majority of its taxable income to shareholders in the form of dividends. PSTL's earnings are influenced by its strategic acquisition of postal properties, lease agreements with USPS, and efficient property management. The company's revenue model benefits from the stability and reliability of USPS as a tenant, given its significant role in national infrastructure. Additionally, PSTL may engage in property management services for third-party owners of postal properties, contributing to its earnings.
Postal Realty Financial Statement Overview
Summary
Postal Realty demonstrates strong financial health with robust revenue growth and a solid balance sheet characterized by zero debt in 2024. The company efficiently generates cash flow, though EBITDA margins have seen a decline, indicating a potential area for operational improvement. Overall, the financial trajectory is positive, with notable strengths in profitability and financial stability.Income Statement
Postal Realty has demonstrated strong revenue growth, with a 19.9% increase from 2023 to 2024. The company maintains a healthy gross profit margin of 87.1% and a net profit margin of 8.6% for 2024. The EBIT margin is also strong at 27.7%, indicating efficient operations. However, the EBITDA margin decreased from 52.9% in 2023 to 21.8% in 2024, which is a point of concern.85
Very Positive
Balance Sheet
Postal Realty exhibits a robust balance sheet with no total debt in 2024, significantly improving the debt-to-equity ratio to 0. The equity ratio is strong at 38.8%, and the return on equity (ROE) is healthy at 2.6% for 2024. The substantial increase in stockholders' equity indicates a solid financial position.90
Very Positive
Cash Flow
The company's free cash flow grew by 31% from 2023 to 2024, showcasing strong cash generation capabilities. The operating cash flow to net income ratio is impressive at 5.1, reflecting efficient cash management. However, the free cash flow to net income ratio of 5.1 suggests there is room for improvement in converting profits into cash.78
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 81.23M | 76.37M | 63.71M | 53.33M | 39.94M | 24.68M | Gross Profit |
| 50.63M | 57.40M | 48.34M | 40.54M | 30.55M | 19.66M | EBIT |
| 24.42M | 21.18M | 14.00M | 9.70M | 5.92M | 1.79M | EBITDA |
| 44.38M | 40.99M | 33.68M | 27.86M | 19.40M | 10.96M | Net Income Common Stockholders |
| 8.07M | 6.60M | 3.71M | 3.85M | 2.06M | -640.88K |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 639.00K | 1.80M | 2.23M | 1.50M | 5.86M | 2.21M | Total Assets |
| 654.02M | 646.82M | 567.35M | 501.30M | 377.72M | 258.88M | Total Debt |
| 0.00 | 296.71M | 240.62M | 196.66M | 95.35M | 124.63M | Net Debt |
| 306.08M | 294.91M | 238.39M | 195.17M | 89.49M | 122.42M | Total Liabilities |
| 339.11M | 329.32M | 265.72M | 217.59M | 112.24M | 139.25M | Stockholders Equity |
| 245.48M | 251.28M | 243.56M | 229.23M | 220.04M | 91.99M |
| Cash Flow | Free Cash Flow | ||||
| 35.08M | 30.73M | 25.56M | 20.90M | 15.20M | 8.43M | Operating Cash Flow |
| 37.92M | 33.50M | 28.43M | 24.59M | 17.09M | 9.40M | Investing Cash Flow |
| -81.05M | -79.15M | -72.61M | -120.15M | -106.72M | -126.15M | Financing Cash Flow |
| 42.01M | 45.32M | 45.01M | 90.57M | 93.39M | 106.84M |
Postal Realty Technical Analysis
Negative
13.10
Price Trends
13.43
Negative
13.26
Negative
13.53
Negative
Market Momentum
-0.02
Negative
48.63
Neutral
75.26
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PSTL, the sentiment is Negative. The current price of 13.1 is above the 20-day moving average (MA) of 13.00, below the 50-day MA of 13.43, and below the 200-day MA of 13.53, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 48.63 is Neutral, neither overbought nor oversold. The STOCH value of 75.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PSTL.
Postal Realty Risk Analysis
Postal Realty disclosed 81 risk factors in its most recent earnings report. Postal Realty 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 3 New Risks
1.
Although we are no longer an "emerging growth company," we are still a "smaller reporting company," with reduced disclosure requirements. Q4, 2024
2.
The increased use of artificial intelligence ("AI") and automation activities by our USPS and non-postal tenants may change the uses, space configurations, and tenant requirements for our owned properties in currently unforeseen ways. Q4, 2024
3.
We may not be as successful as our competitors incorporating AI into our business or adapting to a rapidly changing marketplace. Q4, 2024
Postal Realty Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $387.32M | 47.75 | 2.62% | 7.18% | 23.51% | 167.49% | |
66 Neutral | $978.03M | 52.51 | 1.32% | 12.60% | 6.06% | -15.10% | |
60 Neutral | $2.75B | 10.29 | 0.33% | 8508.22% | 5.95% | -17.48% | |
56 Neutral | $169.73M | 4.10 | 2.10% | ― | -4.47% | -44.64% | |
49 Neutral | $100.59M | ― | -10.71% | 18.71% | -18.92% | -15.81% | |
43 Neutral | $14.18M | ― | -15.03% | 21.91% | -11.91% | -80.43% | |
| $454.05M | ― | -10.27% | 1.05% | ― | ― |
* Real Estate Sector Average
Performance Comparison
PSTL
Postal Realty
13.10
0.47
3.72%
OPI
Office Properties Income
0.20
-1.97
-90.78%
DEA
Easterly Government Properties
20.96
-5.70
-21.38%
EQC
Equity Commonwealth
1.58
-17.63
-91.78%
ONL
Orion Office REIT
1.73
-1.43
-45.25%
NLOP
Net Lease Office Properties
30.85
8.00
35.01%
Postal Realty Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q1-2025)
| % Change Since: -1.06%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Positive
The earnings call demonstrated strong operational performance with high occupancy rates, successful re-leasing activities, and robust acquisition activity. Financial metrics were solid, with low leverage and effective capital management. However, challenges such as the need for lump sum catch-up payments and a lack of updates on the DOGE DSA engagement were noted. The positive aspects of the call significantly outweigh the lowlights.Q1-2025 Updates
Positive Updates
High Occupancy Rate
Occupancy is at 99.8%, demonstrating strong demand and effective property management.
Re-Leasing Success and Long-Term Visibility
Agreements on new rents for 2025 and 2026 expirations, with attention on 2027, alongside inclusion of 3% annual escalators and 10-year lease terms.
Strong Acquisition Activity
Acquired $16 million in Q1, with a continued acquisition pipeline of $80 million to $90 million for the year.
Financial Performance and Guidance
AFFO guidance on track to achieve $1.20 to $1.22 per share, and strong same-store cash NOI results with forward guidance of 4% to 6% for 2025.
Effective Capital Management
Maintained low leverage with net debt to annualized adjusted EBITDA at 5.2x, and 90% fixed-rate debt.
Negative Updates
Lump Sum Catch-Up Payments
A total net lump sum catch-up payment of $426,000 was received due to outstanding expired leases from 2023 and 2024.
No Updates on DOGE DSA Engagement
No material updates on DOGE DSA engagement, although there is bipartisan support for the Postal Service real estate network.
Company Guidance
In the first quarter of 2025, Postal Realty Trust maintained a high occupancy rate of 99.8% and provided annual AFFO guidance of $1.20 to $1.22 per share, indicating strong operational performance. The company completed acquisitions worth $16 million at a 7.6% weighted average cap rate in Q1 and added $13 million in acquisitions post-quarter end, with another $22 million under definitive contracts. They anticipate an acquisition volume of $80 million to $90 million for the year, targeting a 7.5% weighted average cap rate. Postal Realty's AFFO for Q1 was $0.32 per share, and FFO was $0.28 per share. The company's net debt to annualized adjusted EBITDA remained stable at 5.2x. The Board approved a quarterly dividend of $0.2425 per share, a 1% increase from Q1 2024, well-covered by AFFO.Postal Realty Corporate Events
Executive/Board ChangesShareholder Meetings
Postal Realty Approves Key Proposals at Annual Meeting
Neutral
May 19, 2025
Postal Realty Trust, Inc. held its 2025 Annual Meeting of Stockholders on May 16, 2025, where several key proposals were approved. These included the election of five directors, ratification of Deloitte & Touche LLP as the independent accounting firm for 2025, and advisory votes on executive compensation and its frequency. The board decided to conduct advisory votes on executive compensation annually, aligning with shareholder preferences.
The most recent analyst rating on (PSTL) stock is a Hold with a $14.00 price target. To see the full list of analyst forecasts on Postal Realty stock, see the PSTL Stock Forecast page.
Business Operations and Strategy
Postal Realty Updates Management Agreements with Amendments
Neutral
May 9, 2025
On May 5, 2025, Postal Realty Trust, Inc. announced amendments to its management agreements through its subsidiary, Real Estate Asset Counseling, LLC. These amendments, effective from April 1, 2025, include a management fee structure of 4.0% per annum of each property’s gross revenue, with annual increases and provisions for termination. The agreements, approved by an independent committee excluding CEO Andrew Spodek, also include additional fees for financing services.
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.