RMR GROUP INC/THE - A (RMR) Stock Fundamental Analysis
NASDAQ:RMR - Nasdaq - US74967R1068 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to RMR. RMR was compared to 63 industry peers in the Real Estate Management & Development industry. While RMR belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. RMR has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
RMR had positive earnings in the past year.
In the past year RMR had a positive cash flow from operations.
Each year in the past 5 years RMR has been profitable.
Each year in the past 5 years RMR had a positive operating cash flow.
1.2 Ratios
With an excellent Return On Assets value of 3.26%, RMR belongs to the best of the industry, outperforming 83.05% of the companies in the same industry.
RMR's Return On Equity of 9.60% is amongst the best of the industry. RMR outperforms 86.44% of its industry peers.
RMR has a Return On Invested Capital of 8.74%. This is amongst the best in the industry. RMR outperforms 96.61% of its industry peers.
The Average Return On Invested Capital over the past 3 years for RMR is significantly above the industry average of 4.84%.
The 3 year average ROIC (15.75%) for RMR is well above the current ROIC(8.74%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.26% | ||
| ROE | 9.6% | ||
| ROIC | 8.74% |
ROA(3y)6.39%
ROA(5y)6.08%
ROE(3y)16.48%
ROE(5y)15.45%
ROIC(3y)15.75%
ROIC(5y)14.56%
1.3 Margins
The Profit Margin of RMR (2.54%) is better than 69.49% of its industry peers.
In the last couple of years the Profit Margin of RMR has declined.
With a decent Operating Margin value of 6.58%, RMR is doing good in the industry, outperforming 74.58% of the companies in the same industry.
In the last couple of years the Operating Margin of RMR has declined.
Looking at the Gross Margin, with a value of 32.19%, RMR is in line with its industry, outperforming 55.93% of the companies in the same industry.
RMR's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.58% | ||
| PM (TTM) | 2.54% | ||
| GM | 32.19% |
OM growth 3Y-19.87%
OM growth 5Y-25.59%
PM growth 3Y-24.18%
PM growth 5Y-24.54%
GM growth 3Y-6.25%
GM growth 5Y-8.54%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), RMR is creating value.
The number of shares outstanding for RMR has been increased compared to 1 year ago.
The number of shares outstanding for RMR has been increased compared to 5 years ago.
The debt/assets ratio for RMR is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.87 indicates that RMR is not a great score, but indicates only limited risk for bankruptcy at the moment.
RMR has a better Altman-Z score (2.87) than 72.88% of its industry peers.
RMR has a Debt/Equity ratio of 0.36. This is a healthy value indicating a solid balance between debt and equity.
RMR has a Debt to Equity ratio of 0.36. This is comparable to the rest of the industry: RMR outperforms 55.93% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.36 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.87 |
ROIC/WACC1
WACC8.71%
2.3 Liquidity
A Current Ratio of 2.20 indicates that RMR has no problem at all paying its short term obligations.
RMR's Current ratio of 2.20 is in line compared to the rest of the industry. RMR outperforms 55.93% of its industry peers.
RMR has a Quick Ratio of 2.20. This indicates that RMR is financially healthy and has no problem in meeting its short term obligations.
RMR has a Quick ratio of 2.20. This is in the better half of the industry: RMR outperforms 62.71% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.2 | ||
| Quick Ratio | 2.2 |
3. Growth
3.1 Past
RMR shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -18.88%.
RMR shows a very negative growth in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -19.11% yearly.
RMR shows a decrease in Revenue. In the last year, the revenue decreased by -6.71%.
RMR shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.70% yearly.
EPS 1Y (TTM)-18.88%
EPS 3Y-9.71%
EPS 5Y-19.11%
EPS Q2Q%-29.17%
Revenue 1Y (TTM)-6.71%
Revenue growth 3Y13.92%
Revenue growth 5Y4.7%
Sales Q2Q%-4.77%
3.2 Future
The Earnings Per Share is expected to grow by 2.07% on average over the next years.
Based on estimates for the next years, RMR will show a small growth in Revenue. The Revenue will grow by 2.33% on average per year.
EPS Next Y2.91%
EPS Next 2Y2.07%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year2.78%
Revenue Next 2Y2.33%
Revenue Next 3YN/A
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 12.02, which indicates a correct valuation of RMR.
Based on the Price/Earnings ratio, RMR is valued cheaply inside the industry as 88.14% of the companies are valued more expensively.
RMR's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 28.58.
With a Price/Forward Earnings ratio of 11.68, the valuation of RMR can be described as very reasonable.
Based on the Price/Forward Earnings ratio, RMR is valued cheaper than 93.22% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of RMR to the average of the S&P500 Index (24.47), we can say RMR is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.02 | ||
| Fwd PE | 11.68 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, RMR is valued cheaper than 94.92% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 8.85 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of RMR may justify a higher PE ratio.
PEG (NY)4.14
PEG (5Y)N/A
EPS Next 2Y2.07%
EPS Next 3YN/A
5. Dividend
5.1 Amount
RMR has a Yearly Dividend Yield of 9.30%, which is a nice return.
In the last 3 months the price of RMR has falen by -21.16%. A price decline artificially increases the dividend yield. It may be a sign investors do not expect the dividend to last.
RMR's Dividend Yield is rather good when compared to the industry average which is at 3.22. RMR pays more dividend than 98.31% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.27, RMR pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 9.3% |
5.2 History
The dividend of RMR has a limited annual growth rate of 3.94%.
RMR has paid a dividend for at least 10 years, which is a reliable track record.
The dividend of RMR decreased in the last 3 years.
Dividend Growth(5Y)3.94%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
124.65% of the earnings are spent on dividend by RMR. This is not a sustainable payout ratio.
RMR's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP124.65%
EPS Next 2Y2.07%
EPS Next 3YN/A
RMR GROUP INC/THE - A
NASDAQ:RMR (1/27/2025, 11:49:56 AM)
19.11
-0.34 (-1.75%)
Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryReal Estate Management & Development
Earnings (Last)
Earnings (Next)
Inst Owners76.42%
Inst Owner Change0.04%
Ins Owners2.47%
Ins Owner Change0%
Market Cap608.65M
Analysts72.5
Price Target29.07 (52.12%)
Short Float %1.07%
Short Ratio1.61
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 9.3% |
Yearly Dividend1.69
Dividend Growth(5Y)3.94%
DP124.65%
Div Incr Years2
Div Non Decr Years2
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-8.34%
Min EPS beat(2)-11.41%
Max EPS beat(2)-5.26%
EPS beat(4)1
Avg EPS beat(4)-3.28%
Min EPS beat(4)-11.41%
Max EPS beat(4)7.81%
EPS beat(8)3
Avg EPS beat(8)-1.72%
EPS beat(12)4
Avg EPS beat(12)-5.95%
EPS beat(16)7
Avg EPS beat(16)0.92%
Revenue beat(2)0
Avg Revenue beat(2)-8.16%
Min Revenue beat(2)-11.7%
Max Revenue beat(2)-4.61%
Revenue beat(4)1
Avg Revenue beat(4)-3.41%
Min Revenue beat(4)-12.33%
Max Revenue beat(4)15.01%
Revenue beat(8)3
Avg Revenue beat(8)-0.66%
Revenue beat(12)7
Avg Revenue beat(12)3.83%
Revenue beat(16)9
Avg Revenue beat(16)3.23%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-23.81%
EPS NY rev (1m)0%
EPS NY rev (3m)5.65%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)9.69%
Revenue NY rev (1m)-0.29%
Revenue NY rev (3m)4.49%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.02 | ||
| Fwd PE | 11.68 | ||
| P/S | 0.68 | ||
| P/FCF | N/A | ||
| P/OCF | 9.92 | ||
| P/B | 2.56 | ||
| P/tB | 4.18 | ||
| EV/EBITDA | 8.85 |
EPS(TTM)1.59
EY8.32%
EPS(NY)1.64
Fwd EY8.56%
FCF(TTM)-0.41
FCFYN/A
OCF(TTM)1.93
OCFY10.08%
SpS28.18
BVpS7.46
TBVpS4.57
PEG (NY)4.14
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.26% | ||
| ROE | 9.6% | ||
| ROCE | 10.41% | ||
| ROIC | 8.74% | ||
| ROICexc | 11.64% | ||
| ROICexgc | 14.86% | ||
| OM | 6.58% | ||
| PM (TTM) | 2.54% | ||
| GM | 32.19% | ||
| FCFM | N/A |
ROA(3y)6.39%
ROA(5y)6.08%
ROE(3y)16.48%
ROE(5y)15.45%
ROIC(3y)15.75%
ROIC(5y)14.56%
ROICexc(3y)30.24%
ROICexc(5y)28.29%
ROICexgc(3y)31.55%
ROICexgc(5y)29.16%
ROCE(3y)18.76%
ROCE(5y)17.35%
ROICexcg growth 3Y-16.53%
ROICexcg growth 5Y-29.02%
ROICexc growth 3Y-22.84%
ROICexc growth 5Y-32.26%
OM growth 3Y-19.87%
OM growth 5Y-25.59%
PM growth 3Y-24.18%
PM growth 5Y-24.54%
GM growth 3Y-6.25%
GM growth 5Y-8.54%
F-Score5
Asset Turnover1.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.36 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 1.35 | ||
| Cap/Depr | 1578.06% | ||
| Cap/Sales | 8.29% | ||
| Interest Coverage | 159.1 | ||
| Cash Conversion | 96.29% | ||
| Profit Quality | N/A | ||
| Current Ratio | 2.2 | ||
| Quick Ratio | 2.2 | ||
| Altman-Z | 2.87 |
F-Score5
WACC8.71%
ROIC/WACC1
Cap/Depr(3y)683.9%
Cap/Depr(5y)444.34%
Cap/Sales(3y)2.94%
Cap/Sales(5y)1.82%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-18.88%
EPS 3Y-9.71%
EPS 5Y-19.11%
EPS Q2Q%-29.17%
EPS Next Y2.91%
EPS Next 2Y2.07%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-6.71%
Revenue growth 3Y13.92%
Revenue growth 5Y4.7%
Sales Q2Q%-4.77%
Revenue Next Year2.78%
Revenue Next 2Y2.33%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-50.81%
EBIT growth 3Y-8.72%
EBIT growth 5Y-22.09%
EBIT Next Year92.76%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-112.36%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-43.8%
OCF growth 3Y-5.1%
OCF growth 5Y-20.9%