Preferred Apartment Communities (NYSE:APTS) - Share price, News & Analysis

APTS fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	0/6
Past Performance	0/6
Financial Health	3/6
Dividends	3/6

APTS Stock Overview

Rewards

Trading at 18% below our estimate of its fair value

Risk Analysis

Currently unprofitable and not forecast to become profitable over the next 3 years

Dividend of 2.8% is not well covered by earnings

Shareholders have been diluted in the past year

Preferred Apartment Communities Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Preferred Apartment Communities
Historical stock prices
Current Share Price	US$25.00
52 Week High	US$25.80
52 Week Low	US$9.64
Beta	0.98
1 Month Change	0.24%
3 Month Change	0.40%
1 Year Change	146.06%
3 Year Change	71.12%
5 Year Change	56.64%
Change since IPO	153.81%

Shareholder Returns

	APTS	US REITs	US Market
7D	0.4%	6.5%	6.6%
1Y	146.1%	-8.6%	-18.5%

Return vs Industry: APTS exceeded the US REITs industry which returned -11.7% over the past year.

Return vs Market: APTS exceeded the US Market which returned -20.8% over the past year.

Price Volatility

Is APTS's price volatile compared to industry and market?
APTS volatility
APTS Average Weekly Movement	0.3%
REITs Industry Average Movement	4.8%
Market Average Movement	8.0%
10% most volatile stocks in US Market	16.6%
10% least volatile stocks in US Market	3.1%

Stable Share Price: APTS is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 0% a week.

Volatility Over Time: APTS's weekly volatility (0%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2009	366	Joel Murphy	https://pacapts.com

Preferred Apartment Communities, Inc. (NYSE: APTS) is a real estate investment trust engaged primarily in the ownership and operation of Class A multifamily properties, with select investments in grocery anchored shopping centers, Class A office buildings, and student housing properties. Preferred Apartment Communities' investment objective is to generate attractive, stable returns for stockholders by investing in income-producing properties and acquiring or originating real estate loans for multifamily properties. As of September 30, 2020, the Company owned or was invested in 125 properties in 15 states, predominantly in the Southeast region of the United States.

Preferred Apartment Communities Fundamentals Summary

How do Preferred Apartment Communities's earnings and revenue compare to its market cap?
APTS fundamental statistics
Market Cap	US$1.61b
Earnings (TTM)	-US$131.86m
Revenue (TTM)	US$439.74m

3.6x

P/S Ratio

-12.1x

P/E Ratio

Is APTS overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
APTS income statement (TTM)
Revenue	US$439.74m
Cost of Revenue	US$144.88m
Gross Profit	US$294.86m
Other Expenses	US$426.72m
Earnings	-US$131.86m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	-2.07
Gross Margin	67.05%
Net Profit Margin	-29.99%
Debt/Equity Ratio	206.9%

How did APTS perform over the long term?

See historical performance and comparison

Dividends

2.8%

Current Dividend Yield

2,168%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is APTS undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for APTS?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for APTS. This is calculated by dividing APTS's market cap by their current preferred multiple.
What is APTS's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$1.61b

APTS key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	8.8x
Enterprise Value/EBITDA	15.3x
PEG Ratio	n/a

Price to Sales Ratio vs Peers

How does APTS's PS Ratio compare to its peers?

APTS PS Ratio vs Peers

The above table shows the PS ratio for APTS vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PS	Estimated Growth	Market Cap
Peer Average	5.2x

Forward PS

Price-To-Sales vs Peers: APTS is good value based on its Price-To-Sales Ratio (3.6x) compared to the peer average (5.2x).

Price to Earnings Ratio vs Industry

How does APTS's PE Ratio compare vs other companies in the U.S. REITs Industry?

Price-To-Sales vs Industry: APTS is good value based on its Price-To-Sales Ratio (3.6x) compared to the US REITs industry average (5.8x)

Price to Sales Ratio vs Fair Ratio

What is APTS's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

APTS PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	3.6x
Fair PS Ratio	5.1x

Price-To-Sales vs Fair Ratio: APTS is good value based on its Price-To-Sales Ratio (3.6x) compared to the estimated Fair Price-To-Sales Ratio (5.1x).

Share Price vs Fair Value

What is the Fair Price of APTS when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: APTS ($25) is trading below our estimate of fair value ($30.5)

Significantly Below Fair Value: APTS is trading below fair value, but not by a significant amount.

Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate APTS's PEG Ratio to determine if it is good value.

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Future Growth

How is Preferred Apartment Communities forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

24.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: APTS is forecast to remain unprofitable over the next 3 years.

Earnings vs Market: APTS is forecast to remain unprofitable over the next 3 years.

High Growth Earnings: APTS is forecast to remain unprofitable over the next 3 years.

Revenue vs Market: APTS's revenue (2.2% per year) is forecast to grow slower than the US market (8.3% per year).

High Growth Revenue: APTS's revenue (2.2% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if APTS's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Preferred Apartment Communities performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-32.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: APTS is currently unprofitable.

Growing Profit Margin: APTS is currently unprofitable.

Past Earnings Growth Analysis

Earnings Trend: APTS is unprofitable, and losses have increased over the past 5 years at a rate of 32.9% per year.

Accelerating Growth: Unable to compare APTS's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: APTS is unprofitable, making it difficult to compare its past year earnings growth to the REITs industry (69.5%).

Return on Equity

High ROE: APTS has a negative Return on Equity (1.33%), as it is currently unprofitable.

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Financial Health

How is Preferred Apartment Communities's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Stable Cash Runway
Forecast Cash Runway

Financial Position Analysis

Short Term Liabilities: APTS's short term assets ($260.2M) exceed its short term liabilities ($63.5M).

Long Term Liabilities: APTS's short term assets ($260.2M) do not cover its long term liabilities ($2.5B).

Debt to Equity History and Analysis

Debt Level: APTS's net debt to equity ratio (196.7%) is considered high.

Reducing Debt: APTS's debt to equity ratio has increased from 154.6% to 206.9% over the past 5 years.

Balance Sheet

Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable APTS has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: APTS is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 15.5% per year.

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Dividend

What is Preferred Apartment Communities's current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

2.80%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: APTS's dividend (2.8%) is higher than the bottom 25% of dividend payers in the US market (1.63%).

High Dividend: APTS's dividend (2.8%) is low compared to the top 25% of dividend payers in the US market (4.34%).

Stability and Growth of Payments

Stable Dividend: APTS's dividend payments have been volatile in the past 10 years.

Growing Dividend: APTS's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (2167.7%), APTS's dividend payments are not well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (27.8%), APTS's dividend payments are well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

3.2yrs

Average management tenure

CEO

Joel Murphy (62 yo)

2.42yrs

Tenure

US$4,135,103

Compensation

Mr. Joel T. Murphy J.D., has been Chairman of the Board at Preferred Apartment Communities, Inc. since June 2021. He has been Chief Executive Officer of Preferred Apartment Communities, Inc. since January...

CEO Compensation Analysis

Compensation vs Market: Joel's total compensation ($USD4.14M) is about average for companies of similar size in the US market ($USD5.57M).

Compensation vs Earnings: Joel's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: APTS's management team is considered experienced (3.2 years average tenure).

Board Members

Experienced Board: APTS's board of directors are considered experienced (7.2 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: APTS insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 28.9%.

Data	Last Updated (UTC time)
Company Analysis	2022/06/23 00:00
End of Day Share Price	2022/06/23 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31