NexPoint Residential Trust, Inc. (NXRT): what the price assumes
boothcheck covers NexPoint Residential Trust, Inc. (NXRT) but does not put one priced-in number on it: here the defensible answer is the evidence rather than a point estimate. boothcheck publishes no house fair value, target price, or buy/sell rating. Narrative composed 2026-06-28.
Generated: 2026-08-08 · Exported: 2026-08-09 · Source: https://boothcheck.com/report/NXRT
Headline
| Field | Value |
|---|---|
| Ticker | NXRT |
| Company | NexPoint Residential Trust, Inc. |
| Current price | $24.73/sh |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | reit |
| Price-to-FFO | 9.9x |
| FFO yield | 10.1% |
The price sits below what even a 5%/yr funds-from-operations decline would warrant; the inversion reports a bound, not a solved growth path.
Solve inputs: computed at a 10.2% cost of equity with 4% terminal growth over a 5-year stage.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.43σ |
| cohort percentile (of 105 peers) | 18 |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 2.30x | 3 | expensive |
| Earnings | 5.54x | 3 | expensive |
| Relative | 0.60x | 4 | justifies |
| Growth | 1.11x | 5 | expensive |
Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 3.1%); the inversion above states its own rate.
Per-Model Detail (n=15)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $42.30 | 0.58x | yes | FCF base $0.1B, growth -1% (input: historical growth), terminal g 0.5%, WACC 3.2%, 5yr projection |
| DCF Exit Multiple | Growth | $29.74 | 0.83x | yes | Exit EV/EBITDA: 15.7x / 17.7x / 19.7x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $49.26 | 0.50x | yes | P/E 24.94x (blended: static sector reference 35x + trailing (TTM) 10x), scenarios: 21.1x / 24.9x / 28.8x (bear / base = reference held flat / bull), EV/EBITDA 20x |
| Simple DDM | Growth | $9.64 | 2.57x | yes | DPS $2.29, g=-11.7% (sustainable: ROE (TTM) × retention; not the terminal-growth assumption), ke=9.3% |
| Two-Stage DDM | Growth | $22.27 | 1.11x | yes | Stage 1: -10% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $10.73 | 2.30x | yes | Reference only (book value floor): BV/sh $10.73, ROE negative |
| Two-Stage Excess Return | Asset | $9.65 | 2.56x | yes | Reference only (book value with convergence): BV/sh $10.73, ROE converges to ke |
| Discounted Future Market Cap | Growth | $13.73 | 1.80x | yes | Rev $0.3B, growth -1% (input: historical growth; tapered), Terminal P/S: 2.1x / 2.5x / 2.9x (bear / base = today's held flat / bull, cap 8x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $4.46 | 5.54x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.07B × (1−21%) / WACC 3.2% → EPV (no growth) |
| Residual Income | Asset | — | — | no | — |
| Graham Number | Asset | $24.61 | 1.00x | yes | √(22.5 × FFO/share $2.51 × BVPS $10.73) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $35.92 | 0.69x | yes | EBITDA $0.12B × sector EV/EBITDA 20.0x |
| FCF Yield | Earnings | $0.01 | 2473.00x | yes | FCF $78.6M / Kₑ 9.3% — zero-growth perpetuity (excluded from median) |
| SBC-Adj FCF Yield | Earnings | $0.01 | 2473.00x | yes | SBC-adj FCF $0.07B (FCF $0.08B − SBC $0.01B) capitalized at Kₑ (excluded from median) |
| Ben Graham Formula | Earnings | $2.10 | 11.78x | yes | FFO/share $2.51 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $1.23 | 20.11x | yes | BV $10.73 × (ROIC 0.4% / WACC 3.2%) (excluded from median) |
| P/Sales Sector | Relative | $59.44 | 0.42x | yes | Revenue $0.25B × sector P/S 6.0x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $27.14 | 0.91x | yes | FFO/share $2.51 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | $35.29 | 0.70x | yes | FFO/share $2.51 × 14.1x P/FFO (route cohort median, n=85); FFO $0.06B (FFO incl. D&A + impairments, FY2025, companyfacts), shares 25M |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt (REIT basis) | $1.6b |
| Net debt / FFO | 24.83x |
| Fixed-charge coverage (FFO basis) | 2.0x |
| Funds from operations (trailing) | $63.7m |
| Share count CAGR (buyback) | -0.2% |
| Burning cash | no |
REIT basis: leverage is read against funds from operations (FFO), not depreciation-gutted operating income. The header's implied growth runs on ADJUSTED FFO — FFO minus recurring maintenance capex — so the header's multiple and this leverage ratio use bases that differ by that capex; neither substitutes for the other.
Bullet Takeaways
- A Sun Belt Class-B apartment REIT renovating older units to push rents, running 93.5% leased across 36 properties and roughly 13,300 units at an average monthly rent near $1,485.
- The defining risk is leverage in a soft-rent year: net debt is about $1.58 billion against funds from operations, fixed-charge coverage is only about 2 times, and same-store NOI fell 2.7% in the first quarter, so a higher-for-longer rate environment squeezes the equity more than the FFO multiple suggests.
- Watch 2026 Core FFO guidance of $2.42 to $2.71 per share against a same-store NOI midpoint of about negative 0.5%, and the external-manager fee structure, since NexPoint is run by an outside adviser whose incentives do not always line up with shareholders.
Bull Case
Class-B apartments occupy a useful spot in a downturn: they are where renters trade down to when newer, pricier units get too expensive, and where they stay when buying a house is out of reach. NexPoint owns 36 of these communities across the Sun Belt, about 13,305 units, and its model is to buy older properties and renovate them unit by unit, lifting rents as each renovated apartment turns over. The portfolio was 93.5% leased at an average monthly rent near $1,485, which is affordable enough to keep demand sticky through a soft patch. The bull case is that the Sun Belt's long-run population and job migration eventually outruns the wave of new apartment supply that has held rents down, and a value-add operator with renovation runway captures that recovery with operating leverage.
On the price, the relative lens is the bull's strongest card. Against apartment-REIT peers on the measure that fits real estate, funds from operations, the stock trades meaningfully below the cohort, and the price embeds a mildly negative growth assumption, roughly a 3% annual decline in after-maintenance cash flow. In plain terms the market is pricing NexPoint as if its cash flow keeps slipping, which sets a low bar: the bull does not need a boom, only stabilization. Same-store NOI fell 2.7% in the first quarter on a 2.2% revenue decline, so the recovery is not here yet, but the price already reflects the weakness rather than ignoring it.
The renovation engine is the differentiated lever. When new-lease pricing is soft, a renovated unit can still command a premium over its un-renovated neighbor because the comparison is the same building, not the new tower down the road. That gives NexPoint a way to push rents that does not depend on the market rent rising, only on the renovation spread holding. For the bull, this is a cheaply priced, demand-resilient apartment format in the right geography, with a self-help growth lever and a price that already assumes the worst of the current cycle.
Bear Case
Leverage is a magnifying glass, and NexPoint holds a strong one. The portfolio carries net debt of about $1.58 billion against funds from operations that, after the interest bill those borrowings already cost, is a far smaller number, and fixed-charge coverage sits around 2 times. Coverage of 2 means the cash flow covers the fixed financing obligations twice over and no more, which is adequate in a calm year and thin in a bad one. For a REIT this levered, the value of the equity is set less by the apartment rents than by two outside numbers: the cap rate buyers assign to the buildings and the rate at which the debt refinances. A modest cap-rate expansion or a single soft NOI year does more to the equity than the FFO multiple suggests, because the debt is a fixed claim that sits ahead of the shareholder and does not shrink when the buildings are worth less.
The operating data is not yet helping the balance sheet. Same-store NOI fell 2.7% in the first quarter on a 2.2% revenue decline, and management guides full-year same-store NOI to roughly negative 0.5% at the midpoint. The price already embeds a mildly negative cash-flow path, so this is not an overvaluation bear; the relative-multiple lens reads the stock as cheap against peers. The bear is that "cheap" on a highly levered, externally managed REIT in a year of falling same-store NOI is cheap for reasons. The Sun Belt absorbed a large wave of new apartment supply, and until that supply is leased up, new-lease pricing stays under pressure, which is exactly what the negative same-store revenue is showing.
The external-management structure is the governance tail. NexPoint is run by an outside adviser rather than its own employees, which means an entity that earns fees based on the size of the portfolio is making the capital-allocation calls, and the incentive to grow assets is not always the same as the incentive to grow value per share. In a downturn that structure matters more, because the temptation to keep the platform large can run against the discipline a levered balance sheet demands. The honest bear is not that the multiple is stretched. It is that a thin coverage ratio, a rate-sensitive equity, soft same-store trends, and an external manager are a combination that gets cheaper before it gets better if rates stay high.
Valuation
Reading an apartment REIT on reported earnings is a category error, because depreciating a building that is gaining value pushes the bottom line negative on paper while the cash rolls in. The measure that fits is the cash the properties actually keep after the recurring spending they require to stay rentable, which is AFFO. On AFFO, NexPoint trades at about 12.2 times, an AFFO yield near 8.2%. Gross funds from operations is the larger figure AFFO refines down from once recurring maintenance is charged; the after-maintenance yield is the honest one, and at 8.2% it is a high current return that signals the market is pricing risk, not growth.
Worked backward, the multiple embeds almost no growth, in fact a little less than none. The price requires after-maintenance cash flow to decline about 3% a year to be justified, which is to say the market is already pricing the soft same-store trends into the future rather than betting they reverse. Set that against the first quarter, same-store NOI down 2.7% and guidance for roughly negative 0.5% at the midpoint for the year, and the embedded assumption looks like the market extrapolating the current weakness, not a stretch. This is not a stock pricing in a recovery; it is one pricing in continued softness.
The methods we use to triangulate are split by the REIT structure, and the pattern is the signal. Only the peer-multiple lens lands below the price, reading the stock as cheap against the apartment-REIT cohort on the measure that fits. The asset-based, earnings-power, and forward-growth lenses all sit above the price, reading it as expensive, but two of those are the lenses the REIT structure distorts: the earnings-power method runs off depreciation-suppressed income, and the asset-based method capitalizes that same suppressed figure. The growth lens reads it as expensive for a different reason, that a levered portfolio with falling same-store NOI does not clear a growth hurdle. The honest read of the spread is a stock that is inexpensive on the right measure and demanding on the wrong ones, with the leverage deciding which matters more.
That leverage is the decisive number, and for a REIT it is read against funds from operations rather than depreciation-reduced operating income. Net debt is about $1.58 billion, and because funds from operations is already net of the interest this debt costs, that net-debt-to-FFO ratio runs high, which is the arithmetic of a heavily levered apartment portfolio rather than a sign of distress on its own. Fixed-charge coverage of about 2 times is the tighter signal: the cash flow covers the financing obligations twice and no more. A REIT covering its fixed charges twice over is not burning cash, but it has little cushion, and for an equity this levered the price is governed as much by where cap rates and refinancing rates go as by what the buildings rent for. That is the bet at today's price: a cheaply multiplied, demand-resilient apartment portfolio whose equity value swings on rates the company does not control.
Catalysts
The first-quarter print showed a portfolio holding occupancy while pricing slipped. NexPoint reported a net loss of $0.27 per diluted share on revenue of $63.5 million, while FFO of $0.68 per share came in ahead of the consensus near $0.57. The operating softness was in the same-store line: NOI down 2.7% and same-store revenue down 2.2% year over year, with the portfolio 93.5% leased across 13,305 units at an average rent near $1,485. The beat was relative to a low bar; the underlying trend is still negative.
Management's full-year framing reflects that. The company guides 2026 Core FFO to $2.42 to $2.71 per diluted share and same-store NOI growth to roughly negative 0.5% at the midpoint, which is essentially a flat-to-down operating year. The board kept the quarterly dividend at $0.53, a payout the FFO covers but one worth watching given the leverage and the soft same-store trajectory.
From here the catalysts are macro and structural rather than company-specific. The pace at which the Sun Belt absorbs its new apartment supply sets when same-store pricing turns positive again, and the path of interest rates sets both the refinancing cost on a levered balance sheet and the cap rate the market assigns the properties. The renovation program is the one internal lever that can lift rents without waiting for the market, so the spread between renovated and un-renovated units is the operating number to track on the next print.
Peer Cohorts (Per Segment, With Filing Citations)
Core business (reported)
- MAA (MID-AMERICA APARTMENT COMMUNITIES, INC.)
- FY2025 10-K: …companies and other public and private apartment REITs, some of which may have greater resources, greater ability to utilize leverage or lower capital costs than we do. We believe, however, that we are generally well-positioned to compete effectively for residents and acquisition and development opportunities. We…
- FY2025 10-K: …cost of debt and equity capital. We routinely make new investments when we believe it will be accretive to shareholder value over the life of the investments. Competition and Market Demand Our apartment communities are located in areas that include other apartment communities. Occupancy and rental rates are affected…
- IRT (INDEPENDENCE REALTY TRUST, INC.)
- FY2025 10-K: …either currently under development or is in lease-up prior to reaching overall occupancy of 90%. Same-Store Portfolio Net Operating Income We believe that Net Operating Income ("NOI"), a non-GAAP financial measure, is a useful supplemental measure of our operating performance. We define NOI as total property revenues…
- FY2025 10-K: …those driven by value add initiatives, and prudent expense management. If our Board of Directors changes our policies regarding our use of leverage, we expect that it will consider many factors, including, our long-term strategic plan, the leverage ratios of publicly traded REITs with similar investment strategies,…
- CPT (CAMDEN PROPERTY TRUST)
- FY2025 10-K: ; • our ability to adequately manage and maintain our communities; • competition from other available apartments and housing alternatives; • changes in market rents; • increases in expenses, including from tariffs; and • changes in governmental regulations such as eviction moratoriums, rent control, or stabilization…
- FY2025 10-K: …vary and be impacted by economic and other considerations; • Litigation risks could affect our business; 13 Table of Contents • Damage from catastrophic weather and other natural events could result in losses; • Competition could adversely affect our ability to acquire properties; • We could be adversely impacted due…
- ESS (ESSEX PROPERTY TRUST, INC.)
- FY2025 10-K: 2024 and 2023. The intrinsic value of vested awards totaled $ 14.3 million as of December 31, 2025. (15) Segment Information The Company's segment disclosures present the measure used by the chief operating decision maker ("CODM") for purposes of assessing each segment's performance. The Company's CODM is a group…
- FY2025 10-K: …that will optimize the performance of the Company's portfolio. As of December 31, 2025, the Company owned or had ownership interests in 259 operating apartment communities, comprising 63,077 apartment homes, excluding the Company's ownership in preferred equity co-investments, loan investments, two operating…
- EQR (EQUITY RESIDENTIAL)
- FY2025 10-K: …regularly by the chief operating decision maker. The chief operating decision maker, who is the Company's chief executive officer, decides how resources are allocated and assesses performance on a recurring basis at least quarterly. The Company's primary business is the acquisition, development and management of…
- FY2025 10-K: …measure of its operating performance because it is a direct measure of the actual operating results of the Company's apartment properties. 32 Table of Contents The following tables present reconciliations of net income per the consolidated statements of operations to NOI, along with rental income, operating expenses…
- UDR (UDR, Inc.)
- FY2025 10-K: …investment companies and other public and private apartment REITs, some of which may have greater resources, or lower capital costs, than we do. We believe that, in general, we are well-positioned to compete effectively for residents and investments. We believe our competitive advantages include: ● a fully integrated…
- FY2025 10-K: …of a 4.4 % discount, for the comparable apartment REITs component and $ 20.89 per unit, inclusive of a 4.4 % discount, for the Nareit Equity REITs Total Return Index component on the grant date as determined by a lattice-binomial option-pricing model based on a Monte Carlo simulation using a volatility factor of 36.0…
- AVB (AVALONBAY COMMUNITIES, INC.)
- FY2025 10-K: , underwriting or agency distribution or sale of securities of other issuers and do not intend to do so. At all times we intend to make investments in a manner so as to qualify as a REIT unless, because of circumstances or changes to the Internal Revenue Code of 1986, as amended (the "Code") (or the Treasury…
- FY2025 10-K: …on the stage of completion. While under development, management monitors actual construction costs against budgeted costs as well as lease-up pace and rent levels compared to budget. The following table details the Company's segment information as of the dates specified (dollars in thousands). The segments are…
- AMH (American Homes 4 Rent)
- FY2025 10-K: …agreements generally with a term of one year as well as certain fees charged to tenants. The Company's CODM is our Chief Executive Officer and Chief Operating Officer. The accounting policies of our one reportable segment are the same as those described in Note 2. Significant Accounting Policies. Net income and its…
- FY2025 10-K: …that have and may continue to have adverse impacts on our tenants, including as a result of economic recession, increased unemployment or underemployment, slowing wage growth, decreasing purchasing power due to inflation, and increased financing costs. For more information on interest rate risk, see Part II, "Item…
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
NXRT Q1 2026 results, April 2026 · NXRT 2026 guidance, April 2026 · NXRT dividend declaration, Q1 2026