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1. Company Snapshot

1.a. Company Description

NexPoint Residential Trust is a publicly traded REIT, with its shares listed on the New York Stock Exchange under the symbol "NXRT," primarily focused on acquiring, owning and operating well-located middle-income multifamily properties with "value-add" potential in large cities and suburban submarkets of large cities, primarily in the Southeastern and Southwestern United States.NXRT is externally advised by NexPoint Real Estate Advisors, L.P., an affiliate of NexPoint Advisors, L.P., an SEC-registered investment advisor, which has extensive real estate experience.

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1.b. Last Insights on NXRT

NexPoint Residential Trust, Inc.'s recent performance was negatively impacted by a decline in net income and funds from operations (FFO) per share. The company's Q2 2025 earnings call revealed a net loss of $7.0 million, compared to net income of $10.6 million in Q2 2024. Additionally, FFO per share missed estimates, coming in at $0.8 per share. Despite a quarterly dividend of $0.51 per share, the company's high leverage and challenging operational performance have raised concerns. Zacks ranked the stock as a Strong Sell.

1.c. Company Highlights

2. NexPoint Residential Trust's Q3 Earnings: A Closer Look

NexPoint Residential Trust reported a net loss of $7.8 million or $0.31 per diluted share for the third quarter, on total revenues of $62.8 million. The company's NOI was $38.8 million, up 1.8% from the same period in 2024. Core FFO was $17.7 million or $0.70 per diluted share, compared to $0.69 per diluted share in Q3 2024. The actual EPS came out at a loss, but the core FFO per diluted share beat estimates. The company's same-store rent and occupancy decreased 0.3% and 1.3%, respectively.

Publication Date: Nov -23

📋 Highlights
  • Net Loss and Revenues: Q3 net loss of $7.8M ($0.31/share) on $62.8M total revenue, driven by one-time expenses and lower same-store occupancy (-1.3%).
  • NOI Growth: Net operating income (NOI) rose 1.8% YoY to $38.8M, despite same-store rent declining 0.3% and occupancy falling 1.3%.
  • Dividend Increase: Quarterly dividend raised 3.9% to $0.53/share, reflecting confidence in capital recycling and strategic growth plans.
  • Full-Year Guidance: Maintained 2025 loss per share guidance (-$1.22 to -$1.40) and Core FFO of $2.66 to $2.84/share amid market supply normalization.
  • Valuation Gap and Strategy: Trading at 30% discount to NAV ($43.40–$56.24/share), with management prioritizing buybacks and capital recycling to close the gap and hit $170M NOI by 2027.

Operational Performance

The company's operational performance was impacted by one-time expenses, particularly in payroll and repair and maintenance expenses. The run rate for payroll expenses is expected to continue through the first quarter. A one-time benefit of $820,000 was recognized in the quarter. New lease rates were down 4.06% and renewals were up 1.94% for the quarter, resulting in a blended negative 44 basis points. The company's capital expenditures (CapEx) spend was $9 million in the quarter, which is expected to moderate as some of the expenses are one-time in nature.

Guidance and Outlook

NexPoint Residential Trust reaffirmed its midpoints for loss per diluted share, core FFO per diluted share, same-store rental income, and same-store NOI for full-year 2025. The company expects a loss per diluted share of negative $1.22 to $1.40 and core FFO per diluted share of $2.84 to $2.66. The company believes it's close to the end of a record national new multifamily supply cycle and expects deliveries to decrease significantly in 2026 and 2027. Analysts estimate next year's revenue growth at 2.0%.

Valuation and Dividend

The company's NAV range is estimated to be $43.40 to $56.24 per share, with a midpoint of $49.82. The stock is trading at a significant discount to its NAV, with a P/B Ratio of 2.49. The company paid a third-quarter dividend of $0.51 per share of common stock and recently approved a quarterly dividend of $0.53 per share, a 3.9% increase. The Dividend Yield is 6.45%, which is attractive for income investors. The company's goal is to reach $170 million in net operating income (NOI) by 2027.

Capital Allocation Strategy

Management considers buying back stock and acquiring new assets as complementary strategies. The recent acquisition in Vegas is expected to drive growth and has a precision-based investment approach. The company plans to recycle capital through acquisitions and dispositions, with a focus on acquiring new assets and selling mature ones. The company will prioritize stock buybacks, especially with its stock price in the low $30s.

3. NewsRoom

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NexPoint Residential Trust, Inc. to Participate at Nareit's REITworld: 2025 Annual Conference

Dec -01

Source: prnewswire.com

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NexPoint Residential Trust: Risks Tilted To The Upside Heading Into 2026

Nov -24

Source: seekingalpha.com

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NexPoint Residential Trust, Inc. $NXRT Position Raised by Teacher Retirement System of Texas

Nov -05

Source: defenseworld.net

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NexPoint Residential Trust, Inc. (NXRT) Q3 2025 Earnings Call Transcript

Oct -28

Source: seekingalpha.com

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NexPoint Residential Trust Inc. (NXRT) Q3 Earnings: Taking a Look at Key Metrics Versus Estimates

Oct -28

Source: zacks.com

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NexPoint Residential Trust Inc. (NXRT) Beats Q3 FFO Estimates

Oct -28

Source: zacks.com

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NEXPOINT RESIDENTIAL TRUST, INC. REPORTS THIRD QUARTER 2025 RESULTS

Oct -28

Source: prnewswire.com

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NexPoint Residential Trust, Inc. Increases Quarterly Dividend by 3.9%

Oct -28

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.89%)

6. Segments

Rental

Expected Growth: 4.83%

NexPoint Residential Trust's 4.83% rental growth is driven by strong demand for single-family rentals, increasing occupancy rates, and rising rents in its target markets. Additionally, the company's strategic acquisitions and dispositions, as well as its focus on value-add renovations, contribute to its growth momentum.

Other

Expected Growth: 7.4%

NexPoint Residential Trust's 7.4% growth is driven by increasing demand for single-family rental properties, strategic acquisitions, and effective asset management. Additionally, the company's focus on value-add renovations and strong operational efficiency contribute to its growth. Furthermore, the growing need for affordable housing and favorable demographic trends in the US also support the company's expansion.

7. Detailed Products

Multifamily Properties

NexPoint Residential Trust, Inc. owns and operates a diversified portfolio of multifamily properties, offering residents a range of amenities and services.

Apartment Communities

The company's apartment communities provide residents with a range of floor plans, amenities, and services, including swimming pools, fitness centers, and community spaces.

Rental Housing Solutions

NexPoint Residential Trust, Inc. offers a range of rental housing solutions, including apartments, townhomes, and single-family homes, to meet the diverse needs of residents.

Property Management Services

The company provides comprehensive property management services, including leasing, maintenance, and financial management, to optimize property performance.

8. NexPoint Residential Trust, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for NexPoint Residential Trust, Inc. is medium due to the availability of alternative investment options in the real estate industry.

Bargaining Power Of Customers

The bargaining power of customers for NexPoint Residential Trust, Inc. is low due to the company's diversified portfolio and lack of dependence on a single customer.

Bargaining Power Of Suppliers

The bargaining power of suppliers for NexPoint Residential Trust, Inc. is medium due to the company's reliance on a few key suppliers for property management and maintenance services.

Threat Of New Entrants

The threat of new entrants for NexPoint Residential Trust, Inc. is high due to the relatively low barriers to entry in the real estate investment trust (REIT) industry.

Intensity Of Rivalry

The intensity of rivalry for NexPoint Residential Trust, Inc. is high due to the competitive nature of the REIT industry and the presence of several established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 74.87%
Debt Cost 10.23%
Equity Weight 25.13%
Equity Cost 10.23%
WACC 10.23%
Leverage 297.91%

11. Quality Control: NexPoint Residential Trust, Inc. passed 5 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
BRT Apartments

A-Score: 6.2/10

Value: 5.9

Growth: 5.3

Quality: 3.8

Yield: 10.0

Momentum: 3.5

Volatility: 8.7

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NexPoint Residential Trust

A-Score: 5.9/10

Value: 6.3

Growth: 5.2

Quality: 5.5

Yield: 9.0

Momentum: 2.0

Volatility: 7.7

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UMH Properties

A-Score: 5.8/10

Value: 4.3

Growth: 3.0

Quality: 7.1

Yield: 9.0

Momentum: 2.0

Volatility: 9.7

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Clipper Realty

A-Score: 5.6/10

Value: 8.1

Growth: 6.2

Quality: 5.5

Yield: 10.0

Momentum: 1.0

Volatility: 3.0

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Centerspace

A-Score: 5.5/10

Value: 6.5

Growth: 3.2

Quality: 4.4

Yield: 8.0

Momentum: 2.0

Volatility: 9.0

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Bluerock Homes Trust

A-Score: 5.2/10

Value: 6.5

Growth: 5.6

Quality: 3.3

Yield: 9.0

Momentum: 2.0

Volatility: 5.0

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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

29.65$

Current Price

29.65$

Potential

-0.00%

Expected Cash-Flows