Core Insights - Bluerock Homes Trust (BHM) has seen a significant stock price increase of 45% since October 2023, outperforming the S&P 500 Real Estate Index, which rose by 21.8% during the same period [1][2] - The stock's rise is attributed to improvements in the real estate sector and strong revenue growth of 20.3% for the full year 2023, despite a subsequent correction in early 2024 [2][4] - The company remains unprofitable, but there has been a slight improvement in loss trends, with a 3.7% year-on-year decrease in losses in Q1 2024 [4][7] Financial Performance - Total revenues for BHM reached USD 11.176 million for the period ending March 31, 2024, compared to USD 10.138 million in the previous year [3] - The preferred non-GAAP measure of net operating income grew by 3.1% year-on-year to USD 5.75 million, although this growth has slowed from 23.4% in 2023 [16] - The average occupancy rate increased by 30 basis points to 94.5%, showing a modest improvement compared to a 200 basis points rise in 2023 [15] Market Multiples - The trailing twelve months (TTM) price-to-funds from operations (P/FFO) ratio is currently at 84x, a significant increase from 25.3x previously [9] - The TTM price-to-rental revenue (P/RR) ratio stands at 1.78x, which is more favorable compared to peers like Invitation Homes (INVH) at 8.39x and UMH Properties (UMH) at 6.39x [10][17] - Forward estimates suggest a P/FFO ratio could rise to 198x, while the core FFO ratio improves to 18.9x, indicating potential valuation concerns [18] Outlook - The stock's sustained price levels are becoming harder to justify following the slower revenue growth of 10.2% year-on-year in Q1 2024, down from previous highs [7][19] - Future performance may hinge on the start of a rate cut cycle, which could positively impact real estate stocks, and upcoming financial results in early August [20]
Bluerock Homes Trust: Impressive Price Rise Might Not Continue For Now