CTO Realty Growth (CTO): Losses Worsen as Unprofitability Persists, Challenging Value-Driven Narratives

CTO Realty Growth (CTO) remains in the red, with losses widening at an annual rate of 67.6% over the past five years and no improvement in net profit margin or overall profitability. While the company’s revenue is expected to grow by 6.8% per year, that pace lags behind the broader U.S. market’s 10.2% per year, and earnings are forecast to stay negative for at least the next three years. For investors, the potential reward is that shares are currently trading well below one estimate of fair value at $16.51 compared to $52.61. However, the persistent unprofitability and premium price-to-sales figures keep risk in focus.

See our full analysis for CTO Realty Growth.

Now we will see how these earnings results measure up to the most widely held narratives: where the numbers confirm expectations, and where they stir up debate.

See what the community is saying about CTO Realty Growth

Rent Spreads Hit 27% on New Sunbelt Leases

• CTO’s comparable leases have achieved up to 27% positive rent spreads year-to-date, with projections as high as 40 to 60% for major anchor tenant spaces coming up for renewal.
• Analysts' consensus view highlights that this leasing momentum in high-growth Sunbelt markets, fueled by replacing vacated retailers with higher-traffic tenants, is expected to result in stronger future occupancy and more resilient income streams.
  • Consensus narrative points to new leases beginning in late 2025 and 2026 as key drivers of potential rent and property-level margin expansion.
  • Even as overall revenue growth is forecast at 6.8% per year (below the U.S. market’s 10.2%), the focus on necessity-based and experiential tenants may buffer CTO’s top line against wider retail pressures.
• Consensus narrative notes that these elevated rent spreads and proactive re-tenanting strategies support continued reinvestment in the portfolio, which could aid in sustaining earnings and dividend growth if momentum holds.
• To see if the market agrees, read the latest consensus on Sunbelt portfolio strategy in the full CTO Realty Growth narrative. 📊 Read the full CTO Realty Growth Consensus Narrative.

Leverage at 6.9x EBITDA Fuels Balance Sheet Risks

• Net debt stands at 6.9 times EBITDA, underscoring that CTO carries meaningful leverage compared to larger and more diversified REIT peers.
• Consensus narrative flags that downside risks center on the company’s limited scale and rising debt cost, warning that higher leverage could restrict flexibility for refinancing or new acquisitions.
  • Critics highlight that heavy exposure to Sunbelt retail tenants magnifies vulnerability to demographic or economic reversals within those markets, with debt levels compounding the challenge of managing through tough cycles.
  • The narrative also points out that execution risks, such as delays re-leasing anchor spaces, could result in lost rent, pressure margins, and further strain CTO’s ability to deleverage the balance sheet.

Premium Price-to-Sales Ratio Despite DCF Discount

• CTO trades at 3.6x price-to-sales, a premium versus both its peer average of 3.2x and the U.S. REITs industry average of 2.7x, even though the current share price ($16.51) stands at a steep 69% discount to its DCF fair value of $52.61.
• Analysts' consensus view acknowledges the stock’s perceived undervaluation based on DCF yet warns this gap is balanced by persistent unprofitability and uncertainty over the path to industry-average profit margins.
  • What’s surprising is that even with a consensus analyst price target of $21.08, just 19% above the share price, analysts broadly agree the company may not reach profitability for at least three years, keeping valuation heavily dependent on long-term margin expansion.
  • Consensus narrative sees ongoing debate over whether CTO’s discounted price offers sufficient upside to outweigh balance sheet and operating risks highlighted in recent filings.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for CTO Realty Growth on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

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A great starting point for your CTO Realty Growth research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

See What Else Is Out There

CTO Realty Growth’s persistent unprofitability, high leverage at 6.9x EBITDA, and ongoing debt risks highlight vulnerability if market conditions deteriorate or refinancing becomes tougher.

If you want more confidence in a company’s resilience, take a look at solid balance sheet and fundamentals stocks screener (1980 results) to spot opportunities with stronger balance sheets and less exposure to financial distress.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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