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RMR GROUP INC/THE - A (RMR) Stock Fundamental Analysis

NASDAQ:RMR - Nasdaq - US74967R1068 - Common Stock - Currency: USD

18.81  +0.14 (+0.75%)

After market: 18.81 0 (0%)

Fundamental Rating

5

We assign a fundamental rating of 5 out of 10 to RMR. RMR was compared to 64 industry peers in the Real Estate Management & Development industry. While RMR has a great profitability rating, there are some minor concerns on its financial health. RMR is valued correctly, but it does not seem to be growing.


Dividend Valuation Growth Profitability Health

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7

1. Profitability

1.1 Basic Checks

In the past year RMR was profitable.
In the past year RMR had a positive cash flow from operations.
Each year in the past 5 years RMR has been profitable.
RMR had a positive operating cash flow in each of the past 5 years.
RMR Yearly Net Income VS EBIT VS OCF VS FCFRMR Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 50M 100M 150M 200M 250M

1.2 Ratios

RMR's Return On Assets of 3.20% is amongst the best of the industry. RMR outperforms 82.81% of its industry peers.
The Return On Equity of RMR (9.36%) is better than 87.50% of its industry peers.
With an excellent Return On Invested Capital value of 8.25%, RMR belongs to the best of the industry, outperforming 95.31% of the companies in the same industry.
RMR had an Average Return On Invested Capital over the past 3 years of 15.75%. This is significantly above the industry average of 5.31%.
The 3 year average ROIC (15.75%) for RMR is well above the current ROIC(8.25%). The reason for the recent decline needs to be investigated.
Industry RankSector Rank
ROA 3.2%
ROE 9.36%
ROIC 8.25%
ROA(3y)6.39%
ROA(5y)6.08%
ROE(3y)16.48%
ROE(5y)15.45%
ROIC(3y)15.75%
ROIC(5y)14.56%
RMR Yearly ROA, ROE, ROICRMR Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 20 30 40

1.3 Margins

RMR's Profit Margin of 2.59% is fine compared to the rest of the industry. RMR outperforms 71.88% of its industry peers.
In the last couple of years the Profit Margin of RMR has declined.
RMR has a Operating Margin of 6.44%. This is in the better half of the industry: RMR outperforms 75.00% of its industry peers.
In the last couple of years the Operating Margin of RMR has declined.
RMR has a better Gross Margin (34.39%) than 64.06% of its industry peers.
In the last couple of years the Gross Margin of RMR has declined.
Industry RankSector Rank
OM 6.44%
PM (TTM) 2.59%
GM 34.39%
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%
RMR Yearly Profit, Operating, Gross MarginsRMR Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20 40 60

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5

2. Health

2.1 Basic Checks

RMR has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
RMR has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, RMR has more shares outstanding
RMR has a worse debt/assets ratio than last year.
RMR Yearly Shares OutstandingRMR Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 5M 10M 15M
RMR Yearly Total Debt VS Total AssetsRMR Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 200M 400M 600M

2.2 Solvency

RMR has an Altman-Z score of 2.80. This is not the best score and indicates that RMR is in the grey zone with still only limited risk for bankruptcy at the moment.
The Altman-Z score of RMR (2.80) is better than 71.88% of its industry peers.
A Debt/Equity ratio of 0.36 indicates that RMR is not too dependend on debt financing.
The Debt to Equity ratio of RMR (0.36) is comparable to the rest of the industry.
Industry RankSector Rank
Debt/Equity 0.36
Debt/FCF N/A
Altman-Z 2.8
ROIC/WACC0.98
WACC8.41%
RMR Yearly LT Debt VS Equity VS FCFRMR Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 100M 200M

2.3 Liquidity

RMR has a Current Ratio of 2.19. This indicates that RMR is financially healthy and has no problem in meeting its short term obligations.
RMR has a Current ratio of 2.19. This is comparable to the rest of the industry: RMR outperforms 59.38% of its industry peers.
A Quick Ratio of 2.19 indicates that RMR has no problem at all paying its short term obligations.
RMR has a better Quick ratio (2.19) than 64.06% of its industry peers.
Industry RankSector Rank
Current Ratio 2.19
Quick Ratio 2.19
RMR Yearly Current Assets VS Current LiabilitesRMR Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 100M 200M 300M 400M

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2

3. Growth

3.1 Past

The earnings per share for RMR have decreased strongly by -25.26% in the last year.
The earnings per share for RMR have been decreasing by -19.11% on average. This is quite bad
The Revenue for RMR has decreased by -12.10% in the past year. This is quite bad
RMR shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.70% yearly.
EPS 1Y (TTM)-25.26%
EPS 3Y-9.71%
EPS 5Y-19.11%
EPS Q2Q%-28.57%
Revenue 1Y (TTM)-12.1%
Revenue growth 3Y13.92%
Revenue growth 5Y4.7%
Sales Q2Q%-16.13%

3.2 Future

Based on estimates for the next years, RMR will show a decrease in Earnings Per Share. The EPS will decrease by -8.43% on average per year.
Based on estimates for the next years, RMR will show a small growth in Revenue. The Revenue will grow by 1.27% on average per year.
EPS Next Y-4.4%
EPS Next 2Y-8.43%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year1.51%
Revenue Next 2Y1.27%
Revenue Next 3YN/A
Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
RMR Yearly Revenue VS EstimatesRMR Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 200M 400M 600M 800M
RMR Yearly EPS VS EstimatesRMR Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2 4 6

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5

4. Valuation

4.1 Price/Earnings Ratio

RMR is valuated correctly with a Price/Earnings ratio of 12.97.
Based on the Price/Earnings ratio, RMR is valued cheaper than 87.50% of the companies in the same industry.
RMR is valuated cheaply when we compare the Price/Earnings ratio to 29.35, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 14.11, RMR is valued correctly.
92.19% of the companies in the same industry are more expensive than RMR, based on the Price/Forward Earnings ratio.
RMR's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.10.
Industry RankSector Rank
PE 12.97
Fwd PE 14.11
RMR Price Earnings VS Forward Price EarningsRMR Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of RMR indicates a rather cheap valuation: RMR is cheaper than 90.63% of the companies listed in the same industry.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 8.71
RMR Per share dataRMR EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 5 10 15 20 25

4.3 Compensation for Growth

The decent profitability rating of RMR may justify a higher PE ratio.
A cheap valuation may be justified as RMR's earnings are expected to decrease with -8.43% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-8.43%
EPS Next 3YN/A

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5

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 9.64%, RMR is a good candidate for dividend investing.
RMR's Dividend Yield is rather good when compared to the industry average which is at 3.23. RMR pays more dividend than 98.44% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.33, RMR pays a better dividend.
Industry RankSector Rank
Dividend Yield 9.64%

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
RMR Yearly Dividends per shareRMR Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2 4 6 8

5.3 Sustainability

132.27% of the earnings are spent on dividend by RMR. This is not a sustainable payout ratio.
RMR's earnings are declining while the Dividend Rate has been growing. This means the dividend growth is most likely not sustainable.
DP132.27%
EPS Next 2Y-8.43%
EPS Next 3YN/A
RMR Yearly Income VS Free CF VS DividendRMR Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 0 50M 100M 150M 200M
RMR Dividend Payout.RMR Dividend Payout, showing the Payout Ratio.RMR Dividend Payout.PayoutRetained Earnings

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RMR GROUP INC/THE - A

NASDAQ:RMR (3/7/2025, 8:00:02 PM)

After market: 18.81 0 (0%)

18.81

+0.14 (+0.75%)

Chartmill FA Rating
GICS SectorReal Estate
GICS IndustryGroupEquity Real Estate Investment Trusts (REITs)
GICS IndustryReal Estate Management & Development
Earnings (Last)02-05 2025-02-05/amc
Earnings (Next)05-05 2025-05-05/amc
Inst Owners78.83%
Inst Owner Change0.51%
Ins Owners2.36%
Ins Owner Change0%
Market Cap598.91M
Analysts48
Price Target24.48 (30.14%)
Short Float %1.95%
Short Ratio2.07
Dividend
Industry RankSector Rank
Dividend Yield 9.64%
Yearly Dividend1.69
Dividend Growth(5Y)3.94%
DP132.27%
Div Incr Years2
Div Non Decr Years2
Ex-Date01-27 2025-01-27 (0.45)
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-5.48%
Min EPS beat(2)-11.41%
Max EPS beat(2)0.44%
EPS beat(4)1
Avg EPS beat(4)-5.12%
Min EPS beat(4)-11.41%
Max EPS beat(4)0.44%
EPS beat(8)4
Avg EPS beat(8)-1.15%
EPS beat(12)5
Avg EPS beat(12)-4.34%
EPS beat(16)7
Avg EPS beat(16)-1.6%
Revenue beat(2)0
Avg Revenue beat(2)-11.84%
Min Revenue beat(2)-19.07%
Max Revenue beat(2)-4.61%
Revenue beat(4)0
Avg Revenue beat(4)-11.93%
Min Revenue beat(4)-19.07%
Max Revenue beat(4)-4.61%
Revenue beat(8)2
Avg Revenue beat(8)-4.78%
Revenue beat(12)6
Avg Revenue beat(12)1.5%
Revenue beat(16)8
Avg Revenue beat(16)1.64%
PT rev (1m)0%
PT rev (3m)-15.79%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.39%
EPS NY rev (1m)0%
EPS NY rev (3m)5.74%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)1.79%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.87%
Valuation
Industry RankSector Rank
PE 12.97
Fwd PE 14.11
P/S 0.7
P/FCF N/A
P/OCF 10.61
P/B 2.53
P/tB 4.1
EV/EBITDA 8.71
EPS(TTM)1.45
EY7.71%
EPS(NY)1.33
Fwd EY7.09%
FCF(TTM)-0.57
FCFYN/A
OCF(TTM)1.77
OCFY9.43%
SpS26.87
BVpS7.44
TBVpS4.59
PEG (NY)N/A
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA 3.2%
ROE 9.36%
ROCE 9.83%
ROIC 8.25%
ROICexc 11.21%
ROICexgc 14.38%
OM 6.44%
PM (TTM) 2.59%
GM 34.39%
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 Turnover1.23
Health
Industry RankSector Rank
Debt/Equity 0.36
Debt/FCF N/A
Debt/EBITDA 1.4
Cap/Depr 1125.81%
Cap/Sales 8.73%
Interest Coverage 250
Cash Conversion 91.53%
Profit Quality N/A
Current Ratio 2.19
Quick Ratio 2.19
Altman-Z 2.8
F-Score5
WACC8.41%
ROIC/WACC0.98
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)-25.26%
EPS 3Y-9.71%
EPS 5Y-19.11%
EPS Q2Q%-28.57%
EPS Next Y-4.4%
EPS Next 2Y-8.43%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-12.1%
Revenue growth 3Y13.92%
Revenue growth 5Y4.7%
Sales Q2Q%-16.13%
Revenue Next Year1.51%
Revenue Next 2Y1.27%
Revenue Next 3YN/A
Revenue Next 5YN/A
EBIT growth 1Y-53.11%
EBIT growth 3Y-8.72%
EBIT growth 5Y-22.09%
EBIT Next Year87.56%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-119.7%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y-40.18%
OCF growth 3Y-5.1%
OCF growth 5Y-20.9%