Earnings Release [Highlights](index=3&type=section&id=Highlights) NexPoint Residential Trust reported a Q2 2025 net loss of $7.0 million, a decline from the prior year's net income, despite slight FFO and AFFO increases, alongside decreased Same Store performance and ongoing value-add and share repurchase activities Q2 2025 Key Financial Metrics (vs. Q2 2024) | Metric | Q2 2025 (M) | Q2 2024 (M) | | :--- | :--- | :--- | | Net Income (Loss) | $(7.0) | $10.6 | | FFO | $16.9 | $16.3 | | Core FFO | $18.0 | $18.1 | | AFFO | $20.3 | $20.8 | * Q2 Same Store properties experienced a year-over-year decline: occupancy decreased by **80 bps**, total revenue by **0.2%**, average effective rent by **1.3%**, and NOI by **1.1%**[5](index=5&type=chunk) * The company paid a Q2 dividend of **$0.51 per share** and repurchased **223,109 shares** for approximately **$7.6 million** at an average price of **$34.29 per share**[5](index=5&type=chunk) * During Q2 2025, the value-add program completed **555 full and partial upgrades**, achieving an average monthly rent premium of **$73** and a **26.0% ROI** on leased upgraded units[5](index=5&type=chunk) [Second Quarter 2025 Financial Results](index=4&type=section&id=Second%20Quarter%202025%20Financial%20Results) For Q2 2025, total revenues decreased to $63.1 million, resulting in a net loss of $7.0 million primarily due to an $18.7 million decrease in real estate sales gains, while Same Store NOI declined by 1.1% and per-share FFO metrics remained stable Q2 2025 Financial Performance | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total Revenues | $63.1M | $64.2M | | Net Income (Loss) | $(7.0)M | $10.6M | | Net (Loss) Income per Share | $(0.28) | $0.40 | | Same Store NOI | $38.0M | $38.4M (-1.1%) | * The primary reason for the shift from net income to net loss was a decrease in gain on sales of real estate of **$18.7 million** compared to the same period in 2024[8](index=8&type=chunk) [2025 Year to Date Financial Results](index=4&type=section&id=2025%20Year%20to%20Date%20Financial%20Results) Year-to-date 2025 revenues decreased to $126.4 million, leading to a net loss of $13.9 million, largely driven by a $50.4 million reduction in real estate sales gains, with Same Store NOI down 2.4% but Core FFO and AFFO per share slightly increasing YTD 2025 Financial Performance | Metric | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | | Total Revenues | $126.4M | $131.8M | | Net Income (Loss) | $(13.9)M | $36.9M | | Same Store NOI | $75.8M | $77.7M (-2.4%) | | Core FFO per Share | $1.45 | $1.43 | | AFFO per Share | $1.64 | $1.62 | * The significant decline in net income year-to-date is primarily attributed to a **$50.4 million** decrease in gains from real estate sales compared to the first six months of 2024[8](index=8&type=chunk) [Subsequent Events](index=4&type=section&id=Subsequent%20Events) Subsequent to Q2, the Board approved a $0.51 per share Q3 dividend, and NXRT secured a new $200.0 million revolving credit facility maturing in June 2028 with an expansion option * A quarterly dividend of **$0.51 per share** was approved, payable on September 30, 2025[8](index=8&type=chunk) * The company secured a new **$200.0 million revolving credit facility** with an option to expand it to **$400.0 million**. The facility matures on **June 30, 2028**[8](index=8&type=chunk) Company and Portfolio Overview [Company Profile and Portfolio Composition](index=6&type=section&id=Company%20Profile%20and%20Portfolio%20Composition) As of July 2025, NXRT's stock traded at $33.01 with a 6.18% dividend yield and nearly 16% insider ownership, while its Sun Belt-focused portfolio has Phoenix, South Florida, and Dallas/Fort Worth as its top three markets Company Profile (as of July 2025) | Metric | Value | | :--- | :--- | | Exchange/Ticker | NYSE: NXRT | | Share Price (Jul 28, 2025) | $33.01 | | Insider Ownership (Jun 30, 2025) | 15.97% | | Q3 2025 Dividend Per Share | $0.51 | | Dividend Yield | 6.18% | Top 5 Markets by Unit Percentage | Market | % of Units | | :--- | :--- | | Phoenix | 15.5% | | South Florida | 15.1% | | Dallas/Fort Worth | 15.0% | | Atlanta | 13.0% | | Nashville | 10.3% | Highlights of Recent Activity [Capital Markets and Leasing Activity](index=7&type=section&id=Capital%20Markets%20and%20Leasing%20Activity) During Q2, NXRT executed a new $100 million SOFR swap and a $200 million revolving credit facility, with leasing activity showing new lease rate decreases and renewal rate increases, alongside continued share repurchases * Entered into a new **$100 million SOFR swap** effective April 2025, fixing the rate at **3.489%** until **April 2030**[21](index=21&type=chunk)[22](index=22&type=chunk) * Secured a new **$200 million revolving credit facility** maturing in **June 2028**, enhancing financial flexibility[23](index=23&type=chunk)[26](index=26&type=chunk) Q2 2025 Leasing Spreads | Lease Type | Count | Average % Increase | | :--- | :--- | :--- | | New Leases | 1,219 | -1.52% | | Renewals | 1,732 | 2.61% | * Repurchased **223,109 shares** at a weighted average cost of **$34.29 per share**, representing a **32% discount** to the Q2 2025 Net Asset Value (NAV)[25](index=25&type=chunk)[26](index=26&type=chunk) [Forecasted Submarket Deliveries](index=8&type=section&id=Forecasted%20Submarket%20Deliveries) The company's portfolio faces a forecasted 4.5% 3-year new supply growth across its submarkets, with specific areas like Huntersville/Cornelius and Southwest Las Vegas expecting significant new deliveries that could impact future rental and occupancy trends * The total portfolio is exposed to a forecasted **3-year new supply growth of 4.5%**, with **26,179 units** expected to be delivered across its submarkets between 2025 and 2027[27](index=27&type=chunk) Submarkets with Highest Forecasted 3-Year Supply Growth | Market | Submarket | Property | 3-Year % Growth | | :--- | :--- | :--- | :--- | | CHA | Huntersville/Cornelius | The Verandas at Lake Norman | 31.6% | | LSV | Southwest Las Vegas | Torreyana | 12.0% | | CHA | Matthews/SE Charlotte | Creekside at Matthews | 9.2% | | ORL | South Orange County | Sabal Palm at Lake Buena Vista | 9.2% | Financials and Guidance [Financial Summary](index=9&type=section&id=Financial%20Summary) Q2 2025 financial summary highlights a year-over-year decline in Same Store NOI, occupancy, and average effective rent, resulting in a net loss per share, despite slight increases in Core FFO and AFFO per share, and an increased leverage ratio Q2 2025 vs. Q2 2024 Financial & Operational Metrics | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net (Loss) Income per Share | $(0.28) | $0.40 | | Core FFO per Share | $0.71 | $0.69 | | AFFO per Share | $0.80 | $0.79 | | Same Store NOI Growth | -1.1% | N/A | | Portfolio Occupancy | 93.3% | 94.1% | | Avg. Effective Monthly Rent | $1,500 | $1,517 | | Leverage Ratio (Net Debt to EV) | 64% | 59% | * The value-add program accelerated, with **555 rehab units completed** in Q2 2025 compared to 113 in Q2 2024. Cumulatively, **9,113 units** have been upgraded, yielding an average monthly rent increase of **$165** and a **20.8% ROI**[31](index=31&type=chunk) [2025 Full Year Guidance](index=10&type=section&id=2025%20Full%20Year%20Guidance) NXRT reaffirmed its 2025 mid-point guidance for Core FFO per diluted share and Same Store NOI, while revising earnings per diluted share guidance to a loss and maintaining acquisition and disposition targets 2025 Full Year Guidance (Mid-Point) | Metric | Mid-Point Guidance | Prior Mid-Point | | :--- | :--- | :--- | | Earnings (loss) per diluted share | $(1.31) | $(1.22) | | Core FFO per diluted share | $2.75 | Affirmed | | Same Store NOI Growth | -1.5% | Affirmed | | Same Store Total Revenue Growth | 0.1% | 0.5% | | Acquisitions | $100.0M | Affirmed | | Dispositions | $100.0M | Affirmed | * The guidance is based on an estimated weighted average diluted share count of approximately **25.6 million** for the full year 2025[35](index=35&type=chunk) [Components of Net Asset Value](index=11&type=section&id=Components%20of%20Net%20Asset%20Value) The company estimates its NAV per share at a mid-point of $50.31, derived from an estimated real estate value between $2.6 billion and $2.9 billion, reflecting a significant premium to the current share price after accounting for liabilities NAV Summary (Mid-Point) | Component | Value (in thousands) | | :--- | :--- | | Real Estate Value (mid-point) | $2,767,022 | | **Value of Assets (mid-point)** | **$2,857,648** | | Total Outstanding Debt | $1,503,242 | | Other Liabilities | $37,617 | | **Value of Liabilities** | **$1,540,859** | | **Net Asset Value (mid-point)** | **$1,316,789** | * The estimated NAV per share ranges from **$43.90 to $56.73**, with a mid-point of **$50.31**, based on a diluted share count of **26.171 million**[40](index=40&type=chunk) * The implied value per apartment unit is estimated to be between **$200,200 and $226,000**[40](index=40&type=chunk) [Consolidated Balance Sheets](index=12&type=section&id=Consolidated%20Balance%20Sheets) As of June 30, 2025, NXRT's balance sheet showed total assets of $1.86 billion, a slight decrease from year-end 2024, with total liabilities increasing to $1.504 billion, leading to a decline in total stockholders' equity Selected Balance Sheet Items (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Total Net Operating Real Estate | $1,763,255 | $1,793,223 | | **TOTAL ASSETS** | **$1,857,201** | **$1,907,420** | | Mortgages payable, net | $1,466,530 | $1,463,650 | | **TOTAL LIABILITIES** | **$1,504,147** | **$1,491,270** | | **TOTAL STOCKHOLDERS' EQUITY** | **$347,890** | **$410,368** | [Consolidated Statements of Operations](index=13&type=section&id=Consolidated%20Statements%20of%20Operations) For Q2 2025, NXRT reported total revenues of $63.1 million and a net loss of $7.1 million, a shift from Q2 2024's net income primarily due to the absence of real estate sales gains and increased interest expense Q2 Statement of Operations Summary (in thousands) | Account | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Total revenues | $63,149 | $64,238 | | Total expenses | $55,246 | $57,442 | | Gain on sales of real estate | $— | $18,686 | | Interest expense | $(15,162) | $(13,971) | | **Net income (loss)** | **$(7,061)** | **$10,638** | NOI and Same Store Results [NOI and Same Store NOI Reconciliation](index=14&type=section&id=NOI%20and%20Same%20Store%20NOI%20Reconciliation) Q2 2025 Net Operating Income (NOI) was $38.0 million, reconciled from a net loss by adding back non-property level expenses, with all properties classified as Same Store, resulting in a 1.1% decrease in Same Store NOI from Q2 2024 Reconciliation of Net Income (Loss) to NOI (in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net income (loss) | $(7,061) | $10,638 | | Adjustments (Depreciation, Interest, Corp G&A, etc.) | $45,097 | $28,229 | | **NOI** | **$38,036** | **$38,867** | | Less Non-Same Store NOI | $— | $(425) | | **Same Store NOI** | **$38,036** | **$38,442** | [Q2 Same Store Results](index=15&type=section&id=Q2%20Same%20Store%20Results) In Q2 2025, Same Store properties experienced a 0.2% revenue decrease and a 1.5% operating expense increase, leading to a 1.1% year-over-year decline in Same Store NOI to $38.0 million and an 80 basis point drop in occupancy Q2 Same Store Performance (YoY % Change) | Metric | % Change | | :--- | :--- | | Total Revenues | -0.2% | | Total Operating Expenses | +1.5% | | **NOI** | **-1.1%** | | Occupancy | -0.8% | | Average Rent per Unit | -1.3% | * Key expense drivers included a **7.7% increase in Real Estate Taxes** and a **3.6% increase in Repairs & Maintenance**, while Insurance costs decreased by **19.5%**[54](index=54&type=chunk) * On a market level, Phoenix and Las Vegas experienced the largest declines in rental income, down **3.5%** and **2.7%** respectively, while Atlanta and South Florida saw modest increases[56](index=56&type=chunk) [QoQ Same Store Properties Operating Metrics](index=18&type=section&id=QoQ%20Same%20Store%20Properties%20Operating%20Metrics) Sequentially from Q1 to Q2 2025, Same Store total rental income decreased by 0.3%, primarily due to a 120 basis point drop in average occupancy, despite a slight increase in average effective rent, with Phoenix and Las Vegas showing significant occupancy declines Q2 2025 vs. Q1 2025 Same Store Metrics | Metric | Q2 2025 | Q1 2025 | Change | | :--- | :--- | :--- | :--- | | Average Effective Rent | $1,500 | $1,495 | +0.3% | | Occupancy | 93.3% | 94.5% | -120 bps | | Total Rental Income | $61,230K | $61,436K | -0.3% | [YTD Same Store Results](index=18&type=section&id=YTD%20Same%20Store%20Results) For the first six months of 2025, Same Store properties saw a 0.6% revenue decline and a 2.6% operating expense increase, mainly from higher real estate taxes and repairs, resulting in a 2.4% decrease in year-to-date Same Store NOI to $75.8 million YTD Same Store Performance (YoY % Change) | Metric | % Change | | :--- | :--- | | Total Revenues | -0.6% | | Total Operating Expenses | +2.6% | | **NOI** | **-2.4%** | * The largest contributors to the **2.6% increase in operating expenses** were a **5.2% rise in Real Estate Taxes** and a **4.1% increase in Repairs & Maintenance costs**[65](index=65&type=chunk) FFO, Core FFO and AFFO [FFO, Core FFO and AFFO Reconciliation](index=21&type=section&id=FFO%2C%20Core%20FFO%20and%20AFFO%20Reconciliation) In Q2 2025, NXRT's FFO attributable to common stockholders increased to $16.9 million, or $0.67 per diluted share, while Core FFO remained flat and AFFO slightly decreased, with the dividend well-covered by both Core FFO and AFFO Q2 2025 Non-GAAP Metrics per Diluted Share (vs. Q2 2024) | Metric per Share | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | FFO | $0.67 | $0.62 | | Core FFO | $0.71 | $0.69 | | AFFO | $0.80 | $0.79 | Q2 2025 Dividend Coverage Ratios | Metric | Coverage Ratio | | :--- | :--- | | FFO | 1.31x | | Core FFO | 1.39x | | AFFO | 1.57x | Capital Expenditures and Value-Add Program [Historical Capital Expenditures](index=22&type=section&id=Historical%20Capital%20Expenditures) Total capital expenditures in Q2 2025 increased by 50% year-over-year to $9.2 million, driven by a significant rise in capitalized maintenance expenditures, while rehab spending showed mixed trends Capital Expenditures (in thousands) | Category | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Capitalized Rehab Expenditures | $1,420 | $1,952 | -27.3% | | Capitalized Maintenance Expenditures | $7,779 | $4,182 | +86.0% | | **Total Capital Expenditures** | **$9,199** | **$6,134** | **+50.0%** | [Value-Add Program Details](index=23&type=section&id=Value-Add%20Program%20Details) NXRT's value-add program continues to generate strong returns, with interior upgrades achieving a 20.8% ROI, kitchen and laundry appliances a 64.2% ROI, and smart home technology a 37.2% ROI across thousands of completed units Value-Add Program Summary (Cumulative) | Program | Units Completed | Avg. Monthly Rent Increase | ROI | | :--- | :--- | :--- | :--- | | Interiors (Full & Partials) | 9,113 | $165 | 20.8% | | Kitchen & Laundry Appliances | 4,870 | $50 | 64.2% | | Smart Home Technology | 11,199 | $43 | 37.2% | Debt and Capital Structure [Outstanding Debt Details](index=26&type=section&id=Outstanding%20Debt%20Details) As of June 30, 2025, NXRT had $1.5 billion in total mortgage debt, predominantly floating-rate, with $917.5 million covered by interest rate swaps at a weighted average fixed rate of 1.361% to manage interest rate risk * Total outstanding mortgage principal as of June 30, 2025, was **$1.503 billion**[77](index=77&type=chunk) * The company has **$917.5 million in notional interest rate swaps**, effectively fixing the rate on a significant portion of its floating-rate debt. The weighted average fixed rate on these swaps is **1.361%**[79](index=79&type=chunk)[80](index=80&type=chunk) * As of June 30, 2025, interest rate swap agreements effectively covered **62%** of the company's **$1.5 billion** of floating-rate mortgage debt[89](index=89&type=chunk) [Debt Maturity Schedule](index=29&type=section&id=Debt%20Maturity%20Schedule) NXRT maintains a well-staggered debt maturity profile with no significant principal payments until 2028, and the majority of its $1.47 billion mortgage debt matures after 2029, with an adjusted weighted average interest rate of 3.51% Principal Payments Due by Period (in thousands) | Period | Principal Payments | | :--- | :--- | | Remainder of 2025 | $— | | 2026 | $— | | 2027 | $— | | 2028 | $33,817 | | 2029 | $— | | Thereafter | $1,469,425 | * The adjusted weighted average interest rate on the total **$1.5 billion of indebtedness** is **3.51%**, factoring in the effect of interest rate swap agreements[89](index=89&type=chunk) Historical Transactions [Historical Acquisition Details](index=30&type=section&id=Historical%20Acquisition%20Details) The current portfolio of 12,984 units was acquired for approximately $2.03 billion, with an additional $162.8 million rehab budget, totaling nearly $2.2 billion in investment, or $169,117 per unit Total Portfolio Acquisition Summary | Metric | Value | | :--- | :--- | | Total Units | 12,984 | | Total Purchase Price | $2,032,977,000 | | Total Rehab Budget | $162,834,000 | | **Total Investment** | **$2,195,811,000** | | **Investment Per Unit** | **$169,117** | [Historical Disposition Details](index=31&type=section&id=Historical%20Disposition%20Details) Historically, the company disposed of 10,786 units for approximately $1.24 billion, generating a total gain on sale of $497.9 million and $1.22 billion in net cash proceeds, demonstrating successful capital recycling Total Portfolio Disposition Summary | Metric | Value | | :--- | :--- | | Total Units Sold | 10,786 | | Total Purchase Price | $775,047,000 | | Total Sale Price | $1,237,675,000 | | **Total Gain on Sale** | **$497,939,000** | | **Net Cash Proceeds** | **$1,222,887,000** | Definitions and Reconciliations of Non-GAAP Measures [Definitions](index=32&type=section&id=Definitions) This section defines key non-GAAP financial measures including NOI, FFO, Core FFO, and AFFO, which are used to provide a clearer understanding of the company's operating performance by excluding certain non-cash or non-recurring items * **NOI:** Calculated by adjusting net income for items like interest expense, corporate G&A, depreciation, and casualty-related expenses to evaluate property-level performance[95](index=95&type=chunk) * **FFO:** Follows the NAREIT definition, starting with net income and excluding gains/losses from real estate sales while adding back real estate depreciation and amortization[96](index=96&type=chunk) * **Core FFO:** Adjusts FFO for items not representative of ongoing operations, such as casualty losses, debt extinguishment costs, and amortization of deferred financing costs[97](index=97&type=chunk) * **AFFO:** Further refines Core FFO by removing non-cash items like equity-based compensation expense to provide a more precise measure of operating performance[98](index=98&type=chunk) [Reconciliations](index=33&type=section&id=Reconciliations) This section provides detailed reconciliations for key metrics, including total debt to net debt of $1.49 billion as of Q2 2025, and the 2025 guidance, bridging the projected net loss to Same Store NOI and Core FFO Reconciliation of Debt to Net Debt (Q2 2025, in thousands) | Line Item | Amount | | :--- | :--- | | Total mortgage debt | $1,503,242 | | Less: Cash and cash equivalents | $(13,623) | | Less: Restricted cash for upgrades | $(3,320) | | **Net Debt** | **$1,486,299** | FY 2025 Guidance Reconciliation (Mid-Point, in thousands) | Line Item | Amount | | :--- | :--- | | Net loss | $(33,617) | | Depreciation and amortization | $98,259 | | Other adjustments | $(24,455) | | **Core FFO attributable to common stockholders** | **$70,474** |

Core Insights - NexPoint Residential Trust, Inc. (NXRT) reported a net loss of $7.0 million for Q2 2025, compared to a net income of $10.6 million in Q2 2024, primarily due to a decrease in gains on real estate sales [5][6][9] - Total revenues for Q2 2025 were $63.1 million, a slight decrease of 0.2% from $64.2 million in Q2 2024 [5][9] - The company completed 555 upgrades and leased 381 upgraded units during Q2 2025, achieving an average monthly rent premium of $73 and a 26.0% return on investment [5][9] Financial Performance - For the three months ended June 30, 2025, FFO was $16.9 million, Core FFO was $18.0 million, and AFFO was $20.3 million, with respective per share values of $0.67, $0.71, and $0.80 [5][6][9] - Year-to-date financial results showed a net loss of $13.9 million for the six months ended June 30, 2025, compared to a net income of $36.9 million for the same period in 2024 [5][9] - NOI for Q2 2025 was $38.0 million, down 1.1% from $38.4 million in Q2 2024 [5][9] Operational Metrics - Occupancy for Same Store properties decreased by 80 basis points for both Q2 and year-to-date periods compared to the previous year [5][9] - Average effective rent across all properties was $1,500, with a physical occupancy rate of 93.3% as of June 30, 2025 [5][9] - The company repurchased 223,109 shares of common stock for approximately $7.6 million at an average price of $34.29 per share during Q2 2025 [5][9] Subsequent Events - On July 11, 2025, NXRT entered into a $200 million revolving credit facility with J.P. Morgan Chase Bank, which may be increased by an additional $200 million [5][9] - A quarterly dividend of $0.51 per share was declared, payable on September 30, 2025 [5][9]

Core Points - NexPoint Residential Trust, Inc. has successfully refinanced its existing corporate revolving credit facility with major banks, enhancing its financial flexibility [1][2] - The new credit facility has an initial maturity of June 2028, extendable to June 2029, with improved interest rates compared to the previous facility [2] - The facility allows for an increase of up to $200 million, subject to lender agreement, and is secured by equity interests in subsidiaries and proceeds from capital events [2] - The Chief Investment Officer expressed confidence that the new credit agreement will enable the company to capitalize on growth opportunities in improving markets [3] Company Overview - NexPoint Residential Trust is a publicly traded REIT focused on acquiring, owning, and operating middle-income multifamily properties with value-add potential, primarily in the Southeastern and Southwestern United States [4]

Company Overview - NexPoint Residential Trust, Inc. (NXRT) is a publicly traded REIT listed on the New York Stock Exchange, focusing on acquiring, owning, and operating middle-income multifamily properties with "value-add" potential in large cities and suburban areas, primarily in the Southeastern and Southwestern United States [4] Upcoming Conference Call - The company is scheduled to host a conference call on July 29, 2025, at 11:00 a.m. ET to discuss its second quarter 2025 financial results [1] - A live audio webcast of the call will be available on the company's website, and a replay will be accessible shortly after the call for 60 days [2][3] Financial Results Announcement - The company plans to issue a press release with its second quarter 2025 financial results before the market opens on July 29, 2025 [3]

Core Viewpoint - NexPoint Residential Trust Inc. (NXRT) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Ratings - The Zacks rating system is based on the Zacks Consensus Estimate, which aggregates EPS estimates from sell-side analysts for the current and following years [2]. - The recent upgrade reflects an improvement in NexPoint's earnings outlook, suggesting potential buying pressure and an increase in stock price [4][6]. Impact of Earnings Revisions - Changes in a company's future earnings potential, as indicated by earnings estimate revisions, are strongly correlated with near-term stock price movements [5]. - Institutional investors often adjust their valuations based on earnings estimates, leading to significant stock price movements when estimates are revised [5]. Performance of Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [8]. - The upgrade of NexPoint to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [11]. Earnings Estimate Revisions for NexPoint - For the fiscal year ending December 2025, NexPoint is expected to earn $3.24 per share, unchanged from the previous year, but the Zacks Consensus Estimate has increased by 0.7% over the past three months [9].

Core Insights - The article compares NexPoint Residential Trust Inc. (NXRT) and Essex Property Trust (ESS) to determine which stock is undervalued for investors in the REIT and Equity Trust - Residential sector [1] Valuation Metrics - NXRT has a forward P/E ratio of 10.23, significantly lower than ESS's forward P/E of 18.06 [5] - NXRT's PEG ratio is 1.71, while ESS's PEG ratio is much higher at 6.00, indicating NXRT may be undervalued relative to its expected earnings growth [5] - NXRT's P/B ratio stands at 2.23 compared to ESS's P/B of 3.22, further suggesting NXRT's stock may be more attractively priced [6] Zacks Rank and Value Grades - NXRT holds a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while ESS has a Zacks Rank of 3 (Hold) [3] - NXRT has a Value grade of B, whereas ESS has a Value grade of D, highlighting NXRT's stronger valuation metrics [6][7]

Industry Overview - The Zacks REIT and Equity Trust - Residential industry includes companies that own, develop, and manage various residential properties, generating revenues by renting spaces to tenants [3] - The demand for student housing is closely tied to enrollment growth at educational institutions, making it a key driver for this market segment [3] Current Market Dynamics - Strong rental demand is supported by a resilient labor market, demographic trends driving household formation, and rising homeownership costs making renting more attractive [1][4] - Residential REITs are leveraging technology to enhance tenant experience and improve operational efficiency [5] - Economic uncertainty and regional oversupply of apartments are creating challenges, potentially dampening consumer confidence and affecting renter affordability [2][6][7] Performance Metrics - The REIT and Equity Trust - Residential industry has underperformed the broader Zacks Finance sector and the S&P 500 over the past year, returning 0.5% compared to the S&P 500's increase of 9.6% [11] - The industry is currently trading at a forward 12-month price-to-FFO ratio of 16.46, above the Finance sector's forward P/E of 16.11 but below the S&P 500's forward P/E of 21.89 [14] Future Outlook - The industry is positioned in the top 38% of around 250 Zacks industries, indicating robust near-term prospects [8][9] - Analysts are gaining confidence in the growth potential of the industry, as reflected in upward revisions of funds from operations (FFO) per share estimates [10] Investment Opportunities - Veris Residential focuses on Class A multifamily properties in high-demand Northeast markets, with upward revisions in FFO per share estimates suggesting growth potential [19][21] - Elme Communities targets value-oriented multifamily assets in supply-constrained markets, with a projected net operating income upside in 2025 [23][24][25] - NexPoint Residential Trust offers exposure to middle-income multifamily assets in high-growth Sunbelt markets, with upward revisions in FFO per share estimates indicating strong performance [26][27][28]

Core Viewpoint - The article compares NexPoint Residential Trust Inc. (NXRT) and Essex Property Trust (ESS) to determine which stock is more attractive to value investors [1]. Group 1: Zacks Rank and Earnings Estimates - NXRT has a Zacks Rank of 2 (Buy), indicating a more favorable earnings estimate revision activity compared to ESS, which has a Zacks Rank of 3 (Hold) [3]. - The Zacks Rank emphasizes earnings estimates and revisions, which are crucial for value investors [2]. Group 2: Valuation Metrics - NXRT has a forward P/E ratio of 10.73, significantly lower than ESS's forward P/E of 18.08, suggesting that NXRT may be undervalued [5]. - NXRT's PEG ratio is 1.79, while ESS's PEG ratio is much higher at 6.01, indicating NXRT's expected earnings growth is more favorable [5]. - NXRT's P/B ratio is 2.34, compared to ESS's P/B of 3.23, further supporting NXRT's valuation attractiveness [6]. Group 3: Overall Value Grade - NXRT has earned a Value grade of B, while ESS has a Value grade of D, indicating that NXRT is viewed more favorably by value investors [6]. - The combination of Zacks Rank and Style Scores suggests that NXRT is the better option for value investors at this time [6].

DALLAS, May 27, 2025 /PRNewswire/ -- NexPoint Residential Trust, Inc. ("NXRT" or the "Company") (NYSE: NXRT) announced today that Matthew McGraner, NXRT's Executive VP and Chief Investment Officer, Paul Richards, NXRT's Chief Financial Officer, Executive VP-Finance, Treasurer and Assistant Secretary, Bonner McDermett, NXRT's VP, Asset Management, and Sean Jacobson, NXRT's VP, Asset Management will be meeting with investors and others at Nareit's REITweek: 2025 Investor Conference, to be held June 2-5 at the ...

Group 1 - The article discusses the author's long-term investment approach, focusing on REITs, preferred stocks, and high-yield bonds, which began in high school in 2011 [1] - The author has recently combined long stock positions with covered calls and cash secured puts, indicating a strategy that balances risk and return [1] - The primary focus of the author's coverage on Seeking Alpha includes REITs and financials, with occasional insights on ETFs and macro-driven stock ideas [1]