iStar (NYSE:STAR) - Share price, News & Analysis

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

STAR ($13.97) is trading above our estimate of [[fair value]] ($5.46)

STAR fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	0/6
Past Performance	2/6
Financial Health	3/6
Dividends	1/6

STAR Stock Overview

Rewards

Became profitable this year

Risk Analysis

Earnings are forecast to decline by an average of 99.1% per year for the next 3 years

Dividend of 3.58% is not well covered by earnings or forecast to be in the next 3 years

Large one-off items impacting financial results

Shareholders have been diluted in the past year

iStar Competitors

Alexander & Baldwin

NYSE:ALEX

US$1.3b

Washington Real Estate Investment Trust

NYSE:WRE

US$1.9b

Empire State Realty OP

ARCA:ESBA

US$2.0b

Armada Hoffler Properties

NYSE:AHH

US$1.2b

Price History & Performance

Summary of all time highs, changes and price drops for iStar
Historical stock prices
Current Share Price	US$13.97
52 Week High	US$27.75
52 Week Low	US$13.48
Beta	0.88
1 Month Change	-21.65%
3 Month Change	-40.93%
1 Year Change	-32.45%
3 Year Change	8.97%
5 Year Change	17.10%
Change since IPO	-87.83%

Shareholder Returns

	STAR	US REITs	US Market
7D	-0.6%	-0.6%	-2.5%
1Y	-32.4%	-8.7%	-21.2%

Return vs Industry: STAR underperformed the US REITs industry which returned -8.7% over the past year.

Return vs Market: STAR underperformed the US Market which returned -21.2% over the past year.

Price Volatility

Is STAR's price volatile compared to industry and market?
STAR volatility
STAR Average Weekly Movement	6.3%
REITs Industry Average Movement	4.9%
Market Average Movement	8.1%
10% most volatile stocks in US Market	16.9%
10% least volatile stocks in US Market	3.2%

Stable Share Price: STAR is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: STAR's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1993	144	Jay Sugarman	https://www.istar.com

iStar Inc. (NYSE: STAR) is focused on reinventing the ground lease sector, unlocking value for real estate owners throughout the country by providing modern, more efficient ground leases on all types of properties. As the founder, investment manager and largest shareholder of Safehold Inc. (NYSE: SAFE), the first publicly traded company to focus on modern ground leases, iStar is helping create a logical new approach to the way real estate is owned, and continues to use its historic strengths in finance and net lease to expand this unique platform. Recognized as a consistent innovator in the real estate markets, iStar specializes in identifying and scaling newly discovered opportunities and has completed more than $40 billion of transactions over the past two decades.

iStar Fundamentals Summary

How do iStar's earnings and revenue compare to its market cap?
STAR fundamental statistics
Market Cap	US$1.16b
Earnings (TTM)	US$5.74m
Revenue (TTM)	US$370.21m

201.8x

P/E Ratio

3.1x

P/S Ratio

Is STAR overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
STAR income statement (TTM)
Revenue	US$370.21m
Cost of Revenue	US$200.22m
Gross Profit	US$169.99m
Other Expenses	US$164.25m
Earnings	US$5.74m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.069
Gross Margin	45.92%
Net Profit Margin	1.55%
Debt/Equity Ratio	116.8%

How did STAR perform over the long term?

See historical performance and comparison

Dividends

3.6%

Current Dividend Yield

-125%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

2/6

Valuation Score 2/6

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 STAR?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for STAR. This is calculated by dividing STAR's market cap by their current preferred multiple.
What is STAR's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$1.16b

STAR 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	5.7x
Enterprise Value/EBITDA	23.8x
PEG Ratio	-2x

Price to Sales Ratio vs Peers

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

STAR PS Ratio vs Peers

The above table shows the PS ratio for STAR vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PS	Estimated Growth	Market Cap
Peer Average	5.1x
ALEX Alexander & Baldwin	3.2x	-2.0%	US$1.3b
WRE Washington Real Estate Investment Trust	10.7x	6.9%	US$1.9b
ESBA Empire State Realty OP	3.2x	n/a	US$2.0b
AHH Armada Hoffler Properties	3.1x	-6.9%	US$1.2b
STAR iStar	3.1x	-39.2%	US$1.2b

Forward PS

Price-To-Sales vs Peers: STAR is good value based on its Price-To-Sales Ratio (3.1x) compared to the peer average (5.1x).

Price to Earnings Ratio vs Industry

How does STAR's PE Ratio compare vs other companies in the US REITs Industry?

Price-To-Sales vs Industry: STAR is good value based on its Price-To-Sales Ratio (3.1x) compared to the US REITs industry average (5.8x)

Price to Sales Ratio vs Fair Ratio

What is STAR'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.

STAR PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	3.1x
Fair PS Ratio	0.9x

Price-To-Sales vs Fair Ratio: STAR is expensive based on its Price-To-Sales Ratio (3.1x) compared to the estimated Fair Price-To-Sales Ratio (0.9x).

Share Price vs Fair Value

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

Below Fair Value: STAR ($13.97) is trading above our estimate of fair value ($5.46)

Significantly Below Fair Value: STAR is trading above our estimate of fair value.

Price to Earnings Growth Ratio

PEG Ratio: STAR's earnings are forecast to decline next year, so we can't calculate its PEG ratio.

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Future Growth

How is iStar forecast to perform in the next 1 to 3 years based on estimates from 2 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

-99.1%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: STAR's earnings are forecast to decline over the next 3 years (-99.1% per year).

Earnings vs Market: STAR's earnings are forecast to decline over the next 3 years (-99.1% per year).

High Growth Earnings: STAR's earnings are forecast to decline over the next 3 years.

Revenue vs Market: STAR's revenue is expected to decline over the next 3 years (-39.2% per year).

High Growth Revenue: STAR's revenue is forecast to decline over the next 3 years (-39.2% per year).

Earnings per Share Growth Forecasts

Future Return on Equity

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

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Past Performance

How has iStar performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

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

-19.0%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: STAR has a large one-off gain of $102.4M impacting its March 31 2022 financial results.

Growing Profit Margin: STAR became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: STAR has become profitable over the past 5 years, growing earnings by -19% per year.

Accelerating Growth: STAR has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: STAR has become profitable in the last year, making it difficult to compare its past year earnings growth to the REITs industry (69.5%).

Return on Equity

High ROE: STAR's Return on Equity (1.6%) is considered low.

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Financial Health

How is iStar's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: STAR's short term assets ($1.8B) exceed its short term liabilities ($177.2M).

Long Term Liabilities: STAR's short term assets ($1.8B) do not cover its long term liabilities ($2.1B).

Debt to Equity History and Analysis

Debt Level: STAR's net debt to equity ratio (32.7%) is considered satisfactory.

Reducing Debt: STAR's debt to equity ratio has reduced from 391% to 116.8% over the past 5 years.

Debt Coverage: STAR's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: STAR's interest payments on its debt are not well covered by EBIT (0.4x coverage).

Balance Sheet

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Dividend

What is iStar current dividend yield, its reliability and sustainability?

Dividend Score

1/6

Dividend Score 1/6

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

3.58%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: STAR's dividend (3.58%) is higher than the bottom 25% of dividend payers in the US market (1.6%).

High Dividend: STAR's dividend (3.58%) is low compared to the top 25% of dividend payers in the US market (4.25%).

Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, STAR has been paying a dividend for less than 10 years.

Growing Dividend: STAR's dividend payments have increased, but the company has only paid a dividend for 4 years.

Earnings Payout to Shareholders

Earnings Coverage: STAR is paying a dividend but the company is unprofitable.

Cash Payout to Shareholders

Cash Flow Coverage: STAR is paying a dividend but the company has no free cash flows.

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Management

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

4.4yrs

Average management tenure

CEO

Jay Sugarman (59 yo)

25.5yrs

Tenure

US$2,327,438

Compensation

Mr. Jay S. Sugarman has been the Executive Chairman of the Board and Chief Executive Officer of iStar Inc. since founded in 1997. Mr. Sugarman serves as Chief Executive Officer of iStar Marlin LLC. He has...

CEO Compensation Analysis

Compensation vs Market: Jay's total compensation ($USD2.33M) is below average for companies of similar size in the US market ($USD4.04M).

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

Leadership Team

Experienced Management: STAR's management team is considered experienced (4.4 years average tenure).

Board Members

Experienced Board: STAR's board of directors are considered experienced (5.1 years average tenure).

Ownership

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

Insider Trading Volume

Insider Buying: Insufficient data to determine if 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 13.1%.

Data	Last Updated (UTC time)
Company Analysis	2022/07/02 00:00
End of Day Share Price	2022/07/01 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31