Strawberry Fields REIT Inc (STRW) AI Stock Analysis

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Strawberry Fields REIT Inc

(NYSE MKT:STRW)

49Neutral

Strawberry Fields REIT Inc. exhibits some strengths in portfolio expansion and revenue growth but is overshadowed by financial instability, high leverage, and bearish technical indicators. The company's valuation is fair, yet operational risks and market challenges could hinder performance.

Positive Factors

Financial Performance

The company successfully collected 100% of all contractual rents during the quarter.

Investment Opportunity

High growth through acquisitions makes Strawberry Fields REIT an attractive investment opportunity.

Negative Factors

Occupancy Rates

Occupancy for the quarter was 68.7%, down 170 basis points year-over-year.

Trading Liquidity

Limited trading liquidity due to the majority of shares being OP units owned by management, resulting in a smaller free float.

Strawberry Fields REIT Inc (STRW) vs. S&P 500 (SPY)

Market Cap

$133.44M

Dividend Yield4.96%

Average Volume (3M)100.69K

Price to Earnings (P/E)18.9

Beta (1Y)0.03

Revenue Growth17.29%

EPS Growth47.33%

CountryUS

Employees9

SectorReal Estate

Sector Strength76

IndustryREIT - Healthcare Facilities

Share Statistics

EPS (TTM)0.57

Shares Outstanding12,253,619

10 Day Avg. Volume41,523

30 Day Avg. Volume100,690

Financial Highlights & Ratios

PEG Ratio0.40

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market Cap5.47

Enterprise Value/RevenueN/A

Enterprise Value/Gross Profit7.17

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$13.70

Price Target Upside25.80% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering5

Strawberry Fields REIT Inc Business Overview & Revenue Model

Company DescriptionStrawberry Fields REIT LLC, a self-managed and self-administered real estate investment trust, engages in the acquisition, ownership, and leasing of skilled nursing facilities and other post-acute healthcare properties. Its portfolio consists of 79 healthcare properties with an aggregate of 10,426 licensed beds. These properties are located across Arkansas, Illinois, Indiana, Kentucky, Michigan, Ohio, Oklahoma, Tennessee, and Texas. The company is based in South Bend, Indiana.

How the Company Makes MoneyStrawberry Fields REIT Inc generates revenue primarily through the leasing of its healthcare facilities to skilled nursing operators. The company enters into long-term triple-net lease agreements with these operators, whereby the tenants are responsible for paying rent as well as covering property taxes, insurance, and maintenance costs. This revenue model provides stable and predictable cash flows. Additionally, STRW may seek to grow its income by acquiring new properties that meet its investment criteria, thus expanding its leasing portfolio. Strategic partnerships with reputable healthcare operators and a focus on maintaining high occupancy rates also contribute to STRW's financial performance.

Strawberry Fields REIT Inc Financial Statement Overview

Summary

Strawberry Fields REIT Inc. demonstrates strong EBIT and net profit margins for 2024. However, the absence of revenue and cash flows in 2024 raises significant concerns about operational disruptions. High leverage and inconsistent revenue further stress the need for improved financial health and stability.

Income Statement

Neutral

Strawberry Fields REIT Inc. has shown inconsistent revenue growth over the years, with a decline in 2024 due to zero revenue reported. The EBIT and EBITDA margins in 2024 were strong due to minimal costs but the absence of revenue is concerning. The net profit margin improved in 2024 compared to prior years, moving from negative to positive, indicating better cost management. However, the volatility in revenue and profitability poses risks.

Balance Sheet

Negative

The balance sheet reveals a high debt-to-equity ratio, indicating significant leverage, which is common in REITs but still poses financial risk. The equity ratio is low, reflecting limited equity financing. The return on equity improved in 2024 due to positive net income, but the company's financial health remains strained due to high liabilities relative to equity.

Cash Flow

Neutral

The cash flow statements highlight stable operating cash flows over the years, but 2024 shows zero cash flows, raising concerns about the sustainability of cash generation. The lack of revenue in 2024 impacts the free cash flow negatively. The company's cash flow management needs attention to ensure future cash availability.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
117.06M	99.81M	92.54M	87.03M	84.09M
	Gross Profit
101.84M	55.84M	78.88M	75.67M	73.75M
	EBIT
61.30M	47.44M	49.95M	36.76M	39.54M
	EBITDA
94.34M	75.20M	78.73M	57.56M	62.57M
	Net Income Common Stockholders
4.09M	2.50M	-18.01M	-16.03M	-12.13M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
48.37M	12.17M	20.20M	26.21M	17.81M
	Total Assets
787.59M	616.79M	547.00M	569.96M	523.68M
	Total Debt
461.80M	537.99M	457.25M	503.86M	488.81M
	Net Debt
413.42M	525.81M	437.05M	477.66M	471.00M
	Total Liabilities
704.02M	569.52M	497.62M	534.91M	510.26M
	Stockholders Equity
18.17M	7.51M	7.79M	2.27M	13.42M
Cash Flow		Free Cash Flow
35.33M	54.94M	50.93M	44.79M	37.34M
	Operating Cash Flow
59.33M	54.94M	50.93M	44.79M	37.34M
	Investing Cash Flow
-136.78M	-106.35M	-10.10M	-58.29M	-6.43M
	Financing Cash Flow
133.34M	43.46M	-47.25M	23.57M	-26.10M

Strawberry Fields REIT Inc Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price10.89

Price Trends

50DMA

11.46

Negative

100DMA

11.13

Negative

200DMA

11.24

Negative

Market Momentum

MACD

-0.18

Positive

RSI

47.36

Neutral

STOCH

25.99

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STRW, the sentiment is Neutral. The current price of 10.89 is above the 20-day moving average (MA) of 10.88, below the 50-day MA of 11.46, and below the 200-day MA of 11.24, indicating a neutral trend. The MACD of -0.18 indicates Positive momentum. The RSI at 47.36 is Neutral, neither overbought nor oversold. The STOCH value of 25.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for STRW.

Strawberry Fields REIT Inc Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SILA	74 Outperform	$1.45B	34.67	2.86%	3.06%	-0.10%	78.83%
CHCT	71 Outperform	$482.03M	―	-1.67%	10.90%	1.33%	-149.80%
UHT	65 Neutral	$543.39M	29.03	10.15%	7.47%	0.95%	15.07%
Sector *	60 Neutral	$2.79B	11.37	0.20%	8519.74%	6.07%	-14.95%
GMRE	57 Neutral	$564.03M	634.96	1.19%	10.76%	-0.43%	-94.73%
DHC	54 Neutral	$547.61M	―	-17.24%	1.76%	6.04%	-25.79%
STRW	49 Neutral	$133.44M	18.95	31.90%	4.96%	17.29%	47.33%

* Real Estate Sector Average

Performance Comparison

STRW

Strawberry Fields REIT Inc

10.89

1.43

15.12%

DHC

Diversified Healthcare Trust

2.27

-0.25

-9.92%

CHCT

Community Healthcare

17.01

-5.23

-23.52%

GMRE

Global Medical REIT

7.81

0.10

1.30%

UHT

Universal Health Realty Income

39.23

5.29

15.59%

SILA

Sila Realty Trust, Inc.

26.09

9.41

56.41%

Strawberry Fields REIT Inc Earnings Call Summary

Earnings Call Date:Feb 27, 2025

(Q4-2024)

% Change Since: -8.26%|

Next Earnings Date:May 20, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted strong portfolio expansion, revenue and profit growth, and successful public offerings and acquisitions. However, there were concerns about increased interest expenses, lease renewal challenges, and high debt levels. The company also faces operational concerns in specific markets like Chicagoland.

Q4-2024 Updates

Positive Updates

Portfolio Expansion

The company increased its portfolio by 19.3%, bringing the overall facility count to 130 facilities, with a corresponding increase in beds from 12,449 to 14,540, representing approximately a 14% increase.

Revenue and Profit Growth

Revenue increased by $17.3 million or 17.3%, resulting in a net income of $26.5 million, which is a 30.9% increase compared to the prior year.

Successful Public Offering

The company completed its first underwritten public offering of approximately 3.34 million shares for total gross proceeds of $35 million.

Dividend Increase

The company increased its dividend from $0.12 per share at the beginning of the year to $0.14 per share by year-end, representing a 16.6% increase in annual dividend distribution per share.

Strategic Acquisitions

The company acquired eight healthcare facilities in Missouri for $87.5 million and entered an agreement for six facilities in Canada for $90 million.

Negative Updates

Increased Interest Expenses

Interest expense grew by $8.2 million or 33.4%, reflecting the additional expenses incurred to finance the company's portfolio growth.

Lease Expiration Challenges

The company is actively pursuing a new tenant for a property where the current tenant does not plan to renew the lease.

High Debt Levels

Total liabilities increased by 23.6% to $134.5 million, and the debt-to-market cap ratio remains at the higher end of the target range.

Concerns in Chicagoland Market

There are concerns about the reimbursement environment and operational efficiencies in the Chicagoland market, affecting a few homes in the portfolio.

Company Guidance

During the year-end 2024 earnings call for Strawberry Fields REIT LLC, notable guidance was provided on the company's growth and financial performance. The company increased its portfolio by acquiring $130.3 million in grocery properties, expanding from 109 to 124 facilities across ten states, which resulted in a 14% increase in bed count from 12,449 to 14,186 beds. Their tenant base grew from ten to forty operators, and base rents rose from $84 million in 2020 to $104 million in 2024, with expectations to reach $130 million in 2025. Additionally, 88% of facilities are now tied to master leases, and the average lease term extended from 4.6 to 7.4 years. The company collected 100% of its contractual rents and completed a significant acquisition of eight healthcare facilities in Missouri for $87.5 million, as well as entering into its first agreement for six facilities in Canada for $90 million. Financially, total assets grew by 27.7% to $170 million, while total liabilities increased by 23.6% to $134.5 million. The revenue increased by 17.3%, resulting in a net income of $26.5 million, a 30.9% improvement from the previous year. The company's adjusted AFFO was $55.8 million, and EBITDA was $90.6 million, showcasing year-over-year growth. Furthermore, the company declared a cash dividend of $0.14 per share for March 2025, marking the tenth consecutive quarter of dividend payments.

Strawberry Fields REIT Inc Corporate Events

Financial DisclosuresRegulatory Filings and Compliance

Strawberry Fields REIT Inc Q1 2025 Financial Update

Neutral

May 1, 2025

On May 1, 2025, Strawberry Fields REIT Inc issued a presentation detailing its financial results for the year ending December 31, 2024, and the first quarter of 2025. The presentation, which is part of a Current Report on Form 8-K, provides insights into the company’s financial performance and is considered ‘furnished’ rather than ‘filed’ under the Securities Exchange Act of 1934 and the Securities Act of 1933.

Spark’s Take on STRW Stock

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

Strawberry Fields REIT Inc. exhibits some strengths in portfolio expansion and revenue growth but is overshadowed by financial instability, high leverage, and bearish technical indicators. The company’s valuation is fair, yet operational risks and market challenges could hinder performance.

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

Financial DisclosuresRegulatory Filings and Compliance

Strawberry Fields REIT Inc Releases 2024 Financial Results

Neutral

Mar 3, 2025

On March 3, 2025, Strawberry Fields REIT Inc released a presentation detailing its financial results for the year ending December 31, 2024. This presentation, attached to their Form 8-K, is provided for informational purposes and is not considered filed under the Securities Exchange Act of 1934 or the Securities Act of 1933.

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.