Key Takeaways AXR and GENC are trading at or below tangible book value.Both companies remain profitable with strong balance sheets.Previously we had commented on how to value microcaps with lumpy revenue. See https://www.zacks.com/stock/news/2279978/how-to-invest-in-microcaps-with-lumpy-revenue.Here we highlight 2 new names in this vein.  Image Source: Zacks Investment ResearchAMREP Corporation (AXR) , operates substantially from Rio Rancho, NM, primarily engaging in land development and homebuilding. AMREP ...

Financial Data and Key Metrics Changes - In Q4 2025, the company generated $58.7 million in net income, leading to an annual consolidated net income of $183.5 million, surpassing the previous record set in 2024 by approximately $6 million [4][21] - The company ended the year with cash of $425 million and total liquidity of $643 million, with a debt to total capitalization ratio of 16.3%, down from 9.6% at the end of 2024 [8][22] Business Line Data and Key Metrics Changes - The Great Park community closed sales on 13 different programs consisting of 920 home sites, while Valencia saw modest home sales with 70 new homes sold in Q4, up from 50 in Q3 [6][12] - The company closed an industrial land sale in Valencia for $42.5 million and reported a gross margin of 31.25% [20] Market Data and Key Metrics Changes - The housing market in 2025 faced challenges due to economic uncertainty, elevated interest rates, and affordability constraints, yet the company demonstrated resilience in its asset performance [5][6] - Demand for homes remained strong at The Great Park, while Valencia experienced more modest demand due to affordability issues [6] Company Strategy and Development Direction - The company's strategy focuses on maximizing the value of existing communities, maintaining a lean operating structure, matching development spending with revenue generation, and expanding through targeted growth initiatives [9] - The company aims to pursue growth opportunities while prioritizing its growth strategy to expand recurring revenues [8] Management's Comments on Operating Environment and Future Outlook - Management expects growing buyer confidence and moderating interest rates to improve demand for well-located home sites in 2026, projecting consolidated net income of approximately $100 million for the year [7][16] - The company anticipates a small loss in Q1 2026 due to no planned land sales, with the majority of income expected in the second half of the year [26] Other Important Information - The company successfully secured critical entitlement approvals in Valencia and The Great Park, enhancing long-term asset value and development potential [4][13] - Hearthstone, acquired in Q3 2025, contributed $11.8 million in management fee revenue and $3.5 million in net income, expanding the company's earnings profile [15][23] Q&A Session Summary Question: Development expenditures for Valencia and San Francisco in 2026 - Management indicated that development expenditures for both projects in 2026 would be similar to the current year's spending of about $125 million, maintaining a constant pace as development increases [32][34] Question: Clarification on entitlement approvals - Management clarified that the new entitlements in Great Park are additive to previously disclosed saleable acreage, with 100 acres of commercial land now redesignated as residential [39][42]

Financial Data and Key Metrics Changes - In Q4 2025, the company generated $58.7 million in net income, leading to an annual consolidated net income of $183.5 million, surpassing the previous record set in 2024 by approximately $6 million [4][21] - The company ended the year with cash of $425 million and total liquidity of $643 million, with a debt to total capitalization ratio down to 16.3% from 9.6% at the end of 2024 [8][22] Business Line Data and Key Metrics Changes - The Great Park community closed sales on 13 different programs consisting of 920 home sites, while Valencia saw a modest increase in home sales, with 70 new homes sold compared to 50 in Q3 [6][12] - The company closed a significant industrial land sale in Valencia of 13.8 acres for $42.5 million, achieving a gross margin of 31.25% [20][21] Market Data and Key Metrics Changes - The housing market in 2025 remained challenging due to economic uncertainty, elevated interest rates, and affordability constraints, impacting homebuyer demand more in Valencia than in The Great Park [5][6] - Despite these challenges, demand at The Great Park remained strong, with builders selling 78 homes in Q4, although this was a decrease from 187 in Q3 due to seasonality [10] Company Strategy and Development Direction - The company's strategy focuses on maximizing the value of existing communities, maintaining a lean operating structure, matching development spending with revenue generation, and expanding through targeted growth initiatives [9] - The company aims to pursue growth opportunities while prioritizing its growth strategy to expand recurring revenues [8][17] Management's Comments on Operating Environment and Future Outlook - Management expects consolidated net income in 2026 to be approximately $100 million, with earnings weighted more heavily toward the second half of the year as land sales and fee-based income accelerate [16][26] - The company is optimistic about growing buyer confidence and moderating interest rates improving demand for well-located home sites [7] Other Important Information - The company successfully integrated the Hearthstone Land Banking platform, which added a new earnings stream and expanded relationships with institutional capital partners [15] - The company received critical entitlement approvals in Valencia and The Great Park, enhancing long-term value and supporting future development [4][13] Q&A Session Questions and Answers Question: Expectations for development expenditures in 2026 and beyond - Management indicated that development expenditures for both Valencia and San Francisco are expected to be similar to the current year's spending of about $125 million, maintaining a constant pace as development increases [32][34] Question: Clarification on entitlement approvals and their impact on saleable acreage - Management clarified that the recent approvals in Great Park are additive to the previously disclosed saleable acreage, with 100 acres of commercial land now redesignated as residential [39][42]

Financial Data and Key Metrics Changes - In Q4 2025, the company generated $58.7 million in net income, leading to an annual consolidated net income of $183.5 million, surpassing the previous record set in 2024 by approximately $6 million [4][20] - The company ended the year with cash of $425 million and total liquidity of $643 million, with a debt to total capitalization ratio of 16.3%, down from 9.6% at the end of 2024 [8][21] Business Line Data and Key Metrics Changes - The Great Park community closed sales on 13 different programs consisting of 920 home sites, while Valencia saw a modest increase in home sales, with 70 new homes sold compared to 50 in Q3 [6][12] - The company closed an industrial land sale in Valencia for $42.5 million and reported a gross margin of 31.25% for this sale [18] Market Data and Key Metrics Changes - The housing market in 2025 remained challenging due to economic uncertainty, elevated interest rates, and affordability constraints, impacting homebuyer demand more in Valencia than in The Great Park [5][6] - Despite these challenges, demand for homes in The Great Park remained strong, with builders selling 78 homes in Q4, although this was a decrease from 187 in Q3 due to seasonality [10] Company Strategy and Development Direction - The company's strategy focuses on maximizing the value of existing communities, maintaining a lean operating structure, matching development spending with revenue generation, and expanding through targeted growth initiatives [9] - The company aims to pursue growth opportunities while maintaining a disciplined approach to capital deployment, with a first priority on expanding recurring revenues [8][17] Management's Comments on Operating Environment and Future Outlook - Management expects consolidated net income in 2026 to be approximately $100 million, with earnings weighted more heavily toward the second half of the year as land sales and fee-based income accelerate [16][25] - The company is optimistic about growing buyer confidence and moderating interest rates improving demand for well-located home sites, despite intermittent challenges [7] Other Important Information - The company successfully integrated the Hearthstone Land Banking platform, which added a new earnings stream and expanded relationships with institutional capital partners [15] - The company received critical entitlement approvals in both Valencia and The Great Park, enhancing long-term asset value and supporting future development [4][13] Q&A Session Questions and Answers Question: Inquiry about development expenditures for Valencia and San Francisco in 2026 - Management indicated that development expenditures for both projects would be similar to the current year's spending of about $125 million, maintaining a constant pace as development increases [29][30] Question: Clarification on entitlement approvals and their impact on saleable acreage - Management clarified that the new entitlements in Great Park are additive to previously disclosed saleable acreage, increasing the total available for residential use [31][32]

Cullen/Frost Bankers (CFR) came out with quarterly earnings of $2.57 per share, beating the Zacks Consensus Estimate of $2.47 per share. This compares to earnings of $2.36 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of +3.91%. A quarter ago, it was expected that this financial holding company would post earnings of $2.38 per share when it actually produced earnings of $2.67, delivering a surprise of +12.18%.Over the last four ...

导 语 2026年1月，土地成交规模迎来季节性回落，供求规模环比显著下降，同比也延续回落。月末快报数据显示，当月土地成交建筑面积和金 额均环比回落90%，同比来看二者分别下降48%和59%。供地规模方面，截至25日本月土地供应面积3360万平方米，同比下降8%，各地 主管部门仍在进一步严控新增土地供应。从市场热度来看，由于本月成交地块多为2025年末供应的年度收尾地块，优质高总价地块成交 占比偏低，本月溢价率延续低位，至截稿时10亿元以上的宅地均为底价成交。 行业发展环境持续向好，上半年土拍热度有望回升 ◎ 文 / 马千里 核心要点 供求： 交易规模进入季节性低位，持续落实控增量目标。 本月土地供应建筑面积为3360万平方米，环比下降50%，同比下 降8%。成交2580万平方米，环比下降90%，同比下降48%。 热度： 延续低位回落。 1月平均溢价率为1.8%，环比下降0.3个百分点。高总价地块普遍为底价成交。 分布： 各能级均同比回落。 就成交金额变动来看，一线城市同比下降83%，二线同比回落48%，三四线下跌55%。 后市展望 行业发展环境持续向好，上半年土拍热度有望回升 2026年1月，土地市场步入供求 ...

Financial Data and Key Metrics Changes - The company reported a record-setting first quarter with revenues exceeding $9 million and gross profits of approximately $6.2 million, achieving about a third of its fiscal year forecast [6][25] - Net income and earnings per share saw significant increases, with year-to-date results ahead of guidance, achieving about 37% of the full-year guidance [6][25] Business Segment Data and Key Metrics Changes - The company operates in three segments: land development, water utilities, and single-family rentals, all performing well [4] - The land development segment showed strength, particularly in Phase 2D, with completion of Phase 2C and ongoing lot production for Phase 2E [14][15] - The water utility segment experienced strong customer growth with a 22% compound annual growth rate (CAGR) in recurring revenue, although it was softer than normal due to timing issues with building permits and oil and gas deliveries [9][10] Market Data and Key Metrics Changes - The company noted a strong housing market, particularly for entry-level products, with home prices in Sky Ranch appreciating by 30%-40% since their construction [42] - The overall home appreciation in the Denver market is around 4%-5%, with Sky Ranch performing better due to amenities and a mature community [42] Company Strategy and Development Direction - The company aims to continue developing its recurring revenue base while fortifying its balance sheet and investing in business lines [4][24] - There is a focus on expanding operations at Lowry Ranch and exploring commercial development opportunities, particularly with the upcoming interchange project [20][27] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting the potential for significant revenue growth once the interchange is completed and commercial development begins [31][32] - The company is cautious about water acquisitions, preferring strategic opportunities that complement its existing portfolio [35][36] Other Important Information - The company is actively working on a new interchange project that is expected to enhance commercial development opportunities [63][64] - The single-family rental segment continues to grow, with 19 homes completed and all rented, and another 40 units under contract [21][22] Q&A Session Summary Question: What should be the estimated earnings range for fiscal 2027? - Management indicated that fiscal 2027 will be influenced by Phase 2E and the interchange construction, suggesting it will not be a breakout year but will set the stage for future growth [31][32] Question: What are the opportunities for water acquisition? - Management stated that while they are content with their current water portfolio, they remain open to strategic acquisitions that are adjacent to their existing assets [35][36] Question: What is the outlook for land acquisitions? - Management expressed optimism about land acquisition opportunities, noting more active conversations with landowners compared to previous years [37] Question: What is the potential for data centers in the area? - Management highlighted the advantages of Sky Ranch for data centers due to water availability and proximity to power, indicating ongoing discussions with potential users [39][41] Question: What is the current trend in home price appreciation in the Denver market? - Management reported strong appreciation in Sky Ranch, with home prices increasing significantly since construction, outperforming the national average [42]

Financial Data and Key Metrics Changes - The company reported a record-setting first quarter with revenues exceeding $9 million and gross profits of approximately $6.2 million, achieving about a third of its fiscal year forecast [6][25]. - Net income and earnings per share saw significant increases, with year-to-date results ahead of guidance, achieving about 37% of the full-year guidance [6][25]. Business Segment Data and Key Metrics Changes - The land development segment showed strong performance, particularly with the completion of Phase 2C and ongoing work on Phase 2D, which is about 80% complete and ahead of schedule [5][14]. - The water utility segment experienced strong customer growth with a 22% compound annual growth rate (CAGR) in recurring revenue, although it was softer than normal due to timing issues with building permits and oil and gas deliveries [9][10]. - The single-family rental segment has 19 homes completed and rented, with another 40 units under contract, indicating a steady growth in recurring revenues [21][22]. Market Data and Key Metrics Changes - The company operates in a growing area of the Denver metropolitan region, with significant development occurring around the Lowry Ranch, which is expected to enhance the company's asset value [20][61]. - Home prices in the Sky Ranch area have appreciated by 30%-40% since the initial phases, indicating strong demand and market performance despite broader market challenges [42][43]. Company Strategy and Development Direction - The company aims to continue diversifying its activities across land development, water utilities, and single-family rentals, focusing on building a recurring revenue base and fortifying its balance sheet [4][24]. - Future growth is anticipated to come from the completion of the interchange project, which is expected to unlock additional commercial opportunities and enhance overall revenue streams [27][63]. Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the ongoing construction projects and the potential for increased oil and gas revenues as operators begin fracking later in the year [10][11]. - The company is cautious about water acquisitions, preferring strategic opportunities that complement its existing portfolio, while being more aggressive in land acquisitions [35][36]. Other Important Information - The company has a strong balance sheet and continues to invest in its business lines to create shareholder value [4][24]. - The company is exploring opportunities for data centers in the Sky Ranch area, leveraging its water availability to attract high water-use customers [40][41]. Q&A Session Summary Question: What should be the estimated earnings range for fiscal 2027? - Management indicated that fiscal 2027 will be influenced by Phase 2E and the interchange construction, suggesting it may not be a breakout year but will set the stage for future growth [31][32]. Question: What are the opportunities for water acquisition? - Management stated that while they have a strong water portfolio, any acquisitions would need to be strategic and adjacent to existing assets [35][36]. Question: What is the outlook for land acquisitions? - Management expressed optimism about land acquisition opportunities, noting more active conversations with landowners compared to previous years [37]. Question: What is the potential for data centers in the area? - Management highlighted the advantages of Sky Ranch for data centers due to water availability and proximity to infrastructure, indicating ongoing discussions with potential users [40][41]. Question: What is the current trend in home price appreciation in the Denver market? - Management reported strong appreciation in home values in Sky Ranch, with average increases of 30%-40% for earlier phases, driven by demand and community amenities [42][43].

Financial Data and Key Metrics Changes - The company reported a record-setting Q1 with revenues exceeding $9 million and gross profits of approximately $6.2 million, achieving about a third of its fiscal year forecast [6][28] - Net income and earnings per share saw significant increases, attributed to progress on Phase 2D, with year-to-date results ahead of guidance [5][6] Business Segment Data and Key Metrics Changes - The company operates in three segments: land development, water utilities, and single-family rentals, all performing well [4] - The water utility segment experienced strong customer growth with a 22% compound annual growth rate (CAGR) in recurring revenue, although it was softer than normal due to timing issues with building permits and oil and gas deliveries [10][11] - The land development segment showed strength from Phase 2D, with ongoing lot production and completion of Phase 2C [15][16] - The single-family rental segment has 19 homes completed and rented, with another 40 units under contract, aiming to phase in new units to the market [24][25] Market Data and Key Metrics Changes - The company noted strong appreciation in home values within the Sky Ranch area, with some homes appreciating by 30%-40% since their construction [52][56] - The overall housing market is experiencing affordability challenges, but the company is positioned to meet demand with entry-level products [25][56] Company Strategy and Development Direction - The company aims to continue developing its recurring revenue base while fortifying its balance sheet and investing in business lines [4][26] - There is a focus on expanding operations at Lowry Ranch and exploring commercial development opportunities, particularly in relation to the new interchange [22][30][72] - The company is cautious about water acquisitions but is more aggressive in land acquisitions to vertically integrate value [44][45] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for land acquisitions and the overall growth trajectory of the company, despite a slowing home building market [46][47] - The company anticipates a breakout year post-interchange completion, with significant revenue potential from both residential and commercial lots [35][37][67] Other Important Information - The company is actively exploring data center opportunities, leveraging its water availability to attract high water-use customers [50][88] - The company has a strong water portfolio and is seeing appreciation in tap fees, indicating a robust market for water assets [65] Q&A Session Summary Question: What should be the estimated earnings range for fiscal 2027? - Management indicated that fiscal 2027 will not be a breakout year, with expectations for continued growth primarily after the interchange is completed [35][36] Question: What are the opportunities for water acquisition? - Management stated that they are content with their current water portfolio and will pursue strategic acquisitions that are adjacent to existing assets [44][45] Question: What is the outlook for land acquisitions? - Management expressed optimism about land acquisition opportunities, noting increased interest from landowners [46][47] Question: What is the potential for data centers in the area? - Management highlighted the advantages of Sky Ranch for data centers due to water availability and proximity to power, indicating ongoing discussions with potential users [50][88] Question: What is the current trend in home price appreciation in the Denver market? - Management reported strong appreciation in home values at Sky Ranch, with average increases of 30%-40% for some homes [52][56]

Core Insights - Pure Cycle Corporation reported a net income of $4.5 million for the three months ended November 30, 2025, representing a 16% increase from the same period in 2024, marking the twenty-sixth consecutive fiscal quarter with positive net income [1] - The company achieved earnings of $0.19 per fully diluted common share, up from $0.16 in the same period in 2024, reflecting a 19% increase [1] - Revenue for the same period was $9.1 million, a 59% increase compared to $5.8 million in 2024, driven by strong demand for entry-level lots at the Sky Ranch Master Planned Community [6][8] Financial Performance - Net income for Q1 2026 was $4.6 million, up from $3.9 million in Q1 2025, a 16% increase [6] - EBITDA for the three months ended November 30, 2025, was $6.7 million, down 12% from $7.6 million in the same period in 2024 [6] - Cash and cash equivalents totaled $17.1 million as of November 30, 2025 [6][13] Land Development - The company completed the delivery of the remaining finished lots in Phase 2C and closed on the initial plat payment with a new homebuilder partner in Phase 2D [2] - Phase 2D is expected to be substantially complete by the end of fiscal 2026, with 218 lots currently under construction [12] - The company has started platting an additional 159 lots in Phase 2E, expected to be completed in fiscal 2027 [2] Water and Wastewater Segment - Water and wastewater revenue for the three months ended November 30, 2025, was $2.5 million, compared to $2.9 million in the same period in 2024 [8][20] - The company sold 51 water or wastewater taps for $1.7 million during the quarter, an increase from 38 taps sold for $1.5 million in the same period in 2024 [9][15] - The average price of a Sky Ranch water and wastewater tap held at approximately $42,000 per tap during fiscal 2026 [15] Single-Family Rentals - The single-family rental business had 19 homes built and rented or available for rent as of November 30, 2025 [11] - Five townhomes were brought online during the first quarter, and the company is under contract with several national home builders to construct an additional 40 single-family detached homes [11][17] Strategic Partnerships - Pure Cycle has diversified its land development segment by partnering with two new national homebuilders, bringing the total to seven national builders [2] - The company continues to collaborate with established builders like Pulte Group and Oakwood to produce entry-level homes in the Denver metropolitan area [7]