NXRT
NexPoint Residential Trust, Inc.
$23.50
Real Estate Investment Trust
85%
P/FFO × Residential REIT Multiple
Strong
·
Conviction
Undervalued
Trading 75.0% below fair value
You pay
$23.50
Bear
$79.70
Fair
$94.07
Bull
$108.45
Bear
$79.70
+239.1%
$2.51 FFO × 16x
Fair
$94.07
+300.3%
$2.51 FFO × 19x
Bull
$108.45
+361.5%
$2.51 FFO × 22x
Adjust Assumptions
19.0x
$
Key Value Driver
FFO/share ($2.51) × residential P/FFO multiple
Implied Market Multiple
9.4x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (11 analysts)
$22.00
Divergence from AlphaVal
328%
Summary
At $2.51 FFO/share with a 19x residential REIT multiple, the base-case value is $94.07 per share. Dividend yield: 9.0%. DDM cross-check: $202.40.
Warnings
Standard profit figures are misleading for real estate companies — large non-cash accounting charges make profits look artificially low. Dividend yield and funds from operations are better measures.
Dividend yield of 9.0% is unusually high — make sure the company generates enough cash to keep paying it.
Dividend-based valuation: $202.40 (115% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $22.00 (from 11 analysts). Our estimate is 328% above the consensus -- consider that gap carefully.
Key Risks
- P/E and EV/EBITDA are structurally wrong for REITs — use P/FFO and NAV
- Interest rate sensitivity: REIT multiples compress when rates rise
- FFO approximation (NI + D&A) may include gains on property sales — verify