GICS Sector : Real Estate
Five Point Holdings, LLC, through its subsidiary, Five Point Operating Company, LP, owns and develops mixed-use and planned communities in Orange County, Los Angeles County, and San Francisco County.The company operates in four segments: Valencia, San Francisco, Great Park, and Commercial.It sells residential and commercial land sites to homebuilders, commercial developers, and commercial buyers; operates and owns a commercial office, medical campus, and other properties; and provides development and property management services.
Five Point Holdings reported a consolidated net income of $55.7 million for Q3, driven by the strong performance of its Great Park Venture, which sold 326 homesites for $257.7 million, resulting in net income of $201.6 million. The company's share of these earnings was $69.5 million. For the nine months ended September 30, the company recognized $124 million of net income, comprising equity and earnings from unconsolidated entities, including $157.1 million from the Great Park Venture. The earnings per share (EPS) came in at -$0.07, missing estimates of $0.12.
Publication Date: Nov -12
The company made significant strides in strengthening its capital structure and positioning itself for long-term growth. It acquired a 75% ownership interest in Hearthstone Residential Holdings for $57.6 million, issued $450 million in new 8% senior notes due 2030, and repurchased its prior $523.5 million senior notes due 2028. Moody's upgraded the company's corporate credit rating and senior notes rating to B2, underscoring its financial resilience. The acquisition of Hearthstone is expected to drive growth, with the company already seeing meaningful discussions to expand assets under management.
With a Price-to-Book Ratio of 0.2 and a Price-to-Sales Ratio of 2.23, the market appears to be pricing in a relatively conservative valuation. Analysts estimate revenue growth of 10.9% for next year, suggesting a positive outlook. The company's Return on Equity (ROE) stands at 19.07%, indicating a strong ability to generate profits from shareholders' equity. The Free Cash Flow Yield is 34.79%, suggesting a significant potential for returns. As the company continues to execute its strategic priorities, it is well-positioned for long-term growth and value creation.
The company remains cautiously optimistic about the market, expecting a gradual rebound in home sales activity as mortgage rates normalize. The acquisition of Hearthstone Residential Holdings is seen as a significant milestone, providing an established national platform for capital solutions to homebuilders. The company's underwriting discipline is considered one of the best in the industry, with no issues expected with existing contracts. As the company navigates the current market landscape, it is focused on optimizing the value of its home sites, maintaining a lean operating structure, and pursuing selective growth opportunities.
Third Avenue Management Exits Deutsche Bank AG, Impacting Portfolio by -6.22%
Nov -14
Five Point Holdings, LLC (FPH) Q3 2025 Earnings Call Transcript
Oct -30
Five Point Announces Expiration and Results of Cash Tender Offer for Any and All Outstanding 10.500% Initial Rate Senior Notes Due 2028
Sep -20
Five Point Announces Pricing Terms of Cash Tender Offer for Any and All Outstanding 10.500% Initial Rate Senior Notes Due 2028
Sep -19
Five Point Announces Proposed Offering of $450.0 Million of Senior Notes by Five Point Operating Company, LP
Sep -15
Five Point Announces Cash Tender Offer for Any and All Outstanding 10.500% Initial Rate Senior Notes Due 2028
Sep -15
Five Point Q2 Revenue Drops 85 Percent
Jul -25
Five Point Holdings, LLC (FPH) Q2 2025 Earnings Call Transcript
Jul -25
Great Park's 6.37% growth is driven by increasing demand for housing in Irvine, California, fueled by job growth, limited supply, and proximity to major employers. The master-planned community's amenities, schools, and outdoor spaces also attract families and young professionals, contributing to its growth.
Five Point Holdings, LLC's 7.05% growth is driven by increasing demand for master-planned communities, strategic land acquisitions, and effective cost management. Additionally, the company's focus on high-growth markets, such as California and Florida, contributes to its growth. Furthermore, the company's ability to deliver high-quality homes and amenities, resulting in strong sales and revenue growth, also supports its growth momentum.
Valencia's 4.65% growth is driven by increasing demand for new homes in California, fueled by job growth, low unemployment, and limited housing supply. Additionally, Five Point Holdings' strategic land banking and entitlement process, as well as its focus on community development, contribute to the segment's growth.
Strong demand for residential and commercial properties in California, driven by job growth, limited housing supply, and favorable demographics. Five Point Holdings' strategic land holdings and entitlements in high-growth areas, such as San Francisco and Los Angeles, position the company for continued growth. Additionally, the company's focus on mixed-use development and master-planned communities enhances its growth potential.
San Francisco's growth is driven by Five Point Holdings' strategic land acquisition and development in high-demand areas, coupled with the region's thriving tech industry, limited housing supply, and strong job market. Additionally, the city's desirability and proximity to Silicon Valley attract high-income earners, fueling demand for luxury housing and driving growth.
Five Point Holdings, LLC develops and sells new homes in master-planned communities, offering a range of residential products, including single-family homes, townhomes, and condominiums.
The company acquires, develops, and sells land to homebuilders, providing a range of lot sizes and product types to meet the needs of various builders and buyers.
Five Point Holdings, LLC develops and sells commercial properties, including retail, office, and industrial spaces, within its master-planned communities.
The company develops and operates resort-style amenities, including hotels, golf courses, and recreational facilities, within its master-planned communities.
Five Point Holdings, LLC acquires and holds land for future development, providing a strategic pipeline of opportunities for future growth.
The threat of substitutes for Five Point Holdings, LLC is medium due to the availability of alternative land development companies and homebuilders in the market.
The bargaining power of customers for Five Point Holdings, LLC is low due to the company's strong brand reputation and limited alternatives for customers.
The bargaining power of suppliers for Five Point Holdings, LLC is medium due to the company's dependence on a few key suppliers for materials and services.
The threat of new entrants for Five Point Holdings, LLC is high due to the relatively low barriers to entry in the land development and homebuilding industry.
The intensity of rivalry for Five Point Holdings, LLC is high due to the competitive nature of the land development and homebuilding industry, with many established players competing for market share.
| Value | |
|---|---|
| Debt Weight | 50.13% |
| Debt Cost | 3.95% |
| Equity Weight | 49.87% |
| Equity Cost | 11.02% |
| WACC | 7.47% |
| Leverage | 100.52% |
Value: 5.7
Growth: 3.0
Quality: 5.9
Yield: 10.0
Momentum: 6.0
Volatility: 10.0
1-Year Total Return ->
Value: 5.7
Growth: 3.6
Quality: 6.1
Yield: 10.0
Momentum: 2.0
Volatility: 9.3
1-Year Total Return ->
Value: 5.7
Growth: 5.2
Quality: 3.4
Yield: 10.0
Momentum: 2.0
Volatility: 9.3
1-Year Total Return ->
Value: 5.2
Growth: 4.3
Quality: 4.7
Yield: 10.0
Momentum: 2.0
Volatility: 8.0
1-Year Total Return ->
Value: 7.3
Growth: 7.0
Quality: 5.9
Yield: 0.0
Momentum: 8.5
Volatility: 3.7
1-Year Total Return ->
Value: 7.6
Growth: 3.4
Quality: 3.2
Yield: 0.0
Momentum: 5.0
Volatility: 7.7
1-Year Total Return ->