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1. Company Snapshot

1.a. Company Description

NETSTREIT is an internally managed Real Estate Investment Trust (REIT) based in Dallas, Texas that specializes in acquiring single-tenant net lease retail properties nationwide.The growing portfolio consists of high-quality properties leased to e-commerce resistant tenants with healthy balance sheets.Led by a management team of seasoned commercial real estate executives, NETSTREIT's strategy is to create the highest quality net lease retail portfolio in the country with the goal of generating consistent cash flows and dividends for its investors.

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1.b. Last Insights on NTST

NETSTREIT Corp.'s recent performance was driven by a robust defensive portfolio, including high-quality tenants like CVS, Dollar General, and Walmart. The company's use of swaps to adjust debt costs and its ability to acquire properties at cap rates higher than dispositions demonstrate its financial flexibility. Additionally, Wells Fargo initiated coverage with an Overweight rating and $18 price target, forecasting above-consensus 2025 AFFO growth and viewing valuation as well below the Street value of its assets.

1.c. Company Highlights

2. NETSTREIT Corp. Delivers Strong Q3 2025 Earnings

NETSTREIT Corp.'s third-quarter 2025 earnings report highlighted a net income of $621,000, or $0.01 per diluted share, and Core FFO of $26.4 million, or $0.31 per diluted share. The company's actual EPS came in below estimates, which were $0.33. The revenue growth is expected to be 14.3% next year, according to analyst estimates. The company's portfolio consists of 721 investments with 114 tenants in 28 industries, generating over $183 million in ABR across 45 states, with an occupancy rate of 99.9%. The weighted average lease term increased to 9.9 years, and over 62% of its ABR is generated from tenants with investment-grade ratings or profiles.

Publication Date: Nov -29

📋 Highlights
  • Record Investment Activity:: $203.9M invested in 50 properties at 7.4% cash yield.
  • Lease Term Extension:: Weighted average lease term rose to 9.9 years.
  • Capital Raise:: Raised $230.3M via follow-on ($209.7M) and ATM ($20.6M) programs.
  • Portfolio Diversification:: ABR of $183M with 99.9% occupancy and top 5 tenancy at 22.9%.
  • Cost of Capital Improvement:: Investment spread widened to 160 bps over WACC amid 10-year rate drop to 4%.

Investment Activity and Capital Raising

The company reported record quarterly investment activity, with $203.9 million in investments across 50 properties at a 7.4% cash yield. NETSTREIT raised $209.7 million in a follow-on offering and $20.6 million through its ATM program, demonstrating its ability to access capital markets effectively. The company's cost of capital has improved, with the 10-year rate decreasing from 4.5% to 4% and the 5-year rate around 3.6%, opening up more opportunities across various approaches to acquisitions.

Portfolio Diversification and Risk Management

NETSTREIT's disposition activity has it on track to exceed year-end diversification goals, with the top 5 tenancy declining 600 basis points to 22.9%. The company is focused on reducing its exposure to certain tenants, such as Dollar General, Walgreens, and CVS, with a goal of keeping tenant exposure below 5%. The auto parts exposure, which makes up about 2.5% of the company's ABR, is not expected to be impacted by recent bankruptcy news.

Valuation and Dividend

With a P/E Ratio of 8270.5, the company's valuation appears to be high relative to its earnings. However, the Dividend Yield is 4.61%, which may be attractive to income-focused investors. The company's ROE is 0.01%, indicating a relatively low return on equity. The Net Debt / EBITDA ratio is -0.4, suggesting a healthy debt position. The investment spread is currently at 160 bps relative to the WACC, indicating a positive spread.

Outlook and Growth Prospects

NETSTREIT increased its 2025 net investment guidance to $350-$400 million and reiterated its AFFO per share guidance of $1.29-$1.31. The company expects to continue growing its portfolio, with a focus on diversification and reducing exposure to certain tenants. The company is hopeful that the stock price can continue to move higher, which would allow spreads to remain stable or increase. Analysts estimate revenue growth of 14.3% next year, indicating a positive outlook for the company's growth prospects.

3. NewsRoom

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Netstreit: Reliable Yield And Solid Expansion, Yet Shares Appear Fully Priced

Nov -20

Source: seekingalpha.com

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NETSTREIT Corp. Increases Full Year 2025 AFFO Guidance

Nov -18

Source: businesswire.com

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NETSTREIT Corp. $NTST Stake Increased by Connor Clark & Lunn Investment Management Ltd.

Nov -17

Source: defenseworld.net

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4 High-Yield Real Estate Stocks to Buy as Investors Get Defensive

Nov -13

Source: marketbeat.com

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NETSTREIT Corp. $NTST Shares Sold by State of New Jersey Common Pension Fund D

Oct -30

Source: defenseworld.net

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NETSTREIT Corp. (NTST) Q3 2025 Earnings Call Transcript

Oct -28

Source: seekingalpha.com

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These Analysts Increase Their Forecasts On Netstreit Following Q3 Results

Oct -28

Source: benzinga.com

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NETSTREIT (NTST) Q3 Earnings: How Key Metrics Compare to Wall Street Estimates

Oct -27

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (14.24%)

6. Segments

Fixed Lease

Expected Growth: 14%

NETSTREIT Corp.'s 14% fixed lease growth is driven by increasing demand for retail properties, strategic acquisitions, and a strong tenant base. Additionally, the company's focus on long-term leases and rent escalations provides a stable source of revenue, contributing to its growth momentum.

Variable Lease

Expected Growth: 15%

NETSTREIT Corp.'s 15% growth in Variable Lease is driven by increasing demand for retail space, strategic acquisitions, and expansion into high-growth markets. Additionally, the company's focus on omni-channel retailing, experiential retail, and e-commerce integration has contributed to the growth. Furthermore, the company's ability to negotiate favorable lease terms and its strong relationships with tenants have also supported the growth.

Interest Income on Loans Receivable

Expected Growth: 17%

The 17% growth in Interest Income on Loans Receivable from NETSTREIT Corp. is driven by increasing loan origination volumes, rising interest rates, and a growing portfolio of high-yielding loans. Additionally, effective credit risk management and a stable credit quality of the borrower base contribute to the growth.

Above/below Market Lease Amortization, Net

Expected Growth: 13%

NETSTREIT Corp's 13% growth in Above/Below Market Lease Amortization, Net is driven by strategic acquisitions, increasing occupancy rates, and rent growth. Additionally, the company's focus on high-quality, necessity-based retail properties and its ability to negotiate favorable lease terms with tenants have contributed to this growth.

Lease Incentives

Expected Growth: 12%

NETSTREIT Corp.'s 12% growth in Lease Incentives is driven by increasing demand for retail properties, strategic acquisitions, and effective rent growth management. Additionally, the company's focus on high-quality tenants and long-term leases contributes to the growth. Furthermore, the company's ability to negotiate favorable lease terms and its strong relationships with tenants also support the growth.

Other

Expected Growth: 15%

NETSTREIT Corp's 15% growth is driven by increasing demand for net lease properties, strategic acquisitions, and expansion into new markets. Additionally, the company's focus on diversifying its tenant base and improving operational efficiency have contributed to its growth momentum.

7. Detailed Products

Net Lease Properties

NETSTREIT Corp. owns and operates a diversified portfolio of net lease properties, providing long-term, triple-net leases to high-quality tenants across various industries.

Retail Properties

NETSTREIT Corp. owns and operates a portfolio of retail properties, including freestanding stores, shopping centers, and restaurants, leased to well-established retailers and restaurateurs.

Office Properties

NETSTREIT Corp. owns and operates a portfolio of office properties, including single-tenant and multi-tenant buildings, leased to a diverse range of tenants across various industries.

Industrial Properties

NETSTREIT Corp. owns and operates a portfolio of industrial properties, including warehouses, distribution centers, and manufacturing facilities, leased to a diverse range of tenants across various industries.

8. NETSTREIT Corp.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for NETSTREIT Corp. is medium due to the availability of alternative real estate investment trusts (REITs) and other investment options.

Bargaining Power Of Customers

The bargaining power of customers for NETSTREIT Corp. is low due to the fragmented nature of the customer base and the lack of concentration of customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers for NETSTREIT Corp. is medium due to the presence of multiple suppliers and the company's ability to negotiate prices.

Threat Of New Entrants

The threat of new entrants for NETSTREIT Corp. is high due to the relatively low barriers to entry in the REIT industry and the attractiveness of the industry.

Intensity Of Rivalry

The intensity of rivalry for NETSTREIT Corp. is high due to the high level of competition in the REIT industry and the presence of multiple competitors.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 33.61%
Debt Cost 3.95%
Equity Weight 66.39%
Equity Cost 8.77%
WACC 7.15%
Leverage 50.62%

11. Quality Control: NETSTREIT Corp. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
NETSTREIT

A-Score: 6.7/10

Value: 3.0

Growth: 6.2

Quality: 6.2

Yield: 8.0

Momentum: 7.0

Volatility: 10.0

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Getty Realty

A-Score: 6.2/10

Value: 3.1

Growth: 4.6

Quality: 6.5

Yield: 10.0

Momentum: 3.0

Volatility: 10.0

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Saul Centers

A-Score: 6.1/10

Value: 5.7

Growth: 3.6

Quality: 6.1

Yield: 10.0

Momentum: 2.0

Volatility: 9.3

1-Year Total Return ->

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Whitestone REIT

A-Score: 5.8/10

Value: 5.0

Growth: 4.3

Quality: 6.5

Yield: 7.0

Momentum: 3.0

Volatility: 9.0

1-Year Total Return ->

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Acadia Realty

A-Score: 5.1/10

Value: 2.6

Growth: 2.9

Quality: 4.9

Yield: 8.0

Momentum: 3.0

Volatility: 9.0

1-Year Total Return ->

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Retail Opportunity Investments

A-Score: 5.0/10

Value: 2.8

Growth: 4.6

Quality: 5.8

Yield: 4.0

Momentum: 6.5

Volatility: 6.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

17.46$

Current Price

17.46$

Potential

-0.00%

Expected Cash-Flows