Paramount Group (PGRE), a Real Estate category company listed on the NYSE, has been experiencing some financial turbulence, as evidenced by its negative income numbers. The company reported a net income loss of $28.2M and a profit margin of -0.06. The EPS estimate for the next year is also projected to be a loss of $0.24. Despite these challenges, the company maintains a significant amount of net tangible assets valued at
$3.7B, and property, plant, and equipment valued at
$6.8B. However, it's important to note that Paramount Group also carries a long-term debt of
$3.8B. The company's 52-week high stands at $7.56, while the 50-day moving average is at $4.67. Analysts have estimated the target price at $5.2, with a possible upside price of $8.22. Despite the negative figures, the company's shares are predominantly owned by institutions, accounting for 70.13% of the total shares. The company's return on equity stands at -0.0058, and it offers a dividend yield of 0.0513. The company's Z score is 0.4, indicating some financial risk. However, with a quarterly revenue growth of 0.021, Paramount Group may be set for a rebound in August. Paramount Group's average assets are projected to increase significantly, based on reporting trends from the last few years. The previous year's average assets were recorded at $8.48 billion. The current year's Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) are expected to grow to approximately $374.4 million. However, Earnings Before Tax (EBT) are forecasted to decline to -$34 million. It's not uncommon to see share prices fluctuate following a sudden shift in one of the fundamental indicators. We will delve into some of Paramount's key ratios and explore why it is still quite feasible for the company to generate above-average returns. The question remains: will shareholders continue to hold, or should we anticipate a sell-off?
Typically, a company's
financial statements are the reports that show the
financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Paramount income statement, its balance sheet, and the statement of cash flows. Potential Paramount investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Paramount investors may use each financial statement separately, they are all related. The changes in Paramount's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Paramount's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our
technical analysis and
fundamental analysis pages.
The goal of Paramount
fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Paramount performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Paramount shares is the value that is considered the true value of the share. If
the intrinsic value of Paramount is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Paramount. Please read more on our
fundamental analysis page.
How effective is Paramount in utilizing its assets?
Paramount Group reports assets on its Balance Sheet. It represents the amount of Paramount resources that either has an existing economic value or will provide some form of benefits in the future. By effectively utilizing its assets, Paramount aims to generate revenue, control costs, drive operational efficiency, and enhance profitability. Optimizing asset utilization helps maximize shareholder value and maintain a competitive position in the Diversified REITs space. To get a better handle on how balance sheet or income statements item affect Paramount volatility, please check the breakdown of all its
fundamentals.
Are Paramount Earnings Expected to grow?
The
future earnings power of Paramount involves the interaction of many company-specific, industry, and economic forces. Earnings estimates embody investors' opinions of Paramount factors such as sales growth, product demand, competitive industry environment, profit margins, and cost controls. Paramount
stock prices adjust as these expectations change or are proven wrong. The main thing to remember is that equities with high expected earnings growth tend to underperform the market because it is usually difficult to meet the market's high expectations. Companies with low earnings expectations tend to do better than expected. Please use our latest analysis of Paramount
expected earnings.
And What about dividends?
A dividend is the distribution of a portion of Paramount earnings, decided and managed by the company's board of directors and paid to a class of its shareholders. Note, announcements of dividend payouts are generally accompanied by a proportional increase or decrease in a company's stock price. Paramount dividend payments follow a chronological order of events, and the associated dates are important to determine the shareholders who qualify for receiving the dividend payment. Paramount one year expected dividend income is about USD0.11 per share.
At present, Paramount's
Dividend Paid And Capex Coverage Ratio is projected to increase significantly based on the last few years of reporting.
Investing in dividend-paying stocks, such as Paramount Group is one of the few strategies that are good for long-term investment. Ex-dividend dates are significant because investors in Paramount must own a stock before its ex-dividend date to receive its next dividend.
This type of analysis is very useful when you want to generate a past dividend schedule and payout information for Paramount. Then that information in the form of graph and calendar can be used to fully explain how Du Pont dividends can provide a real clue to its valuation.
Paramount Gross Profit
Paramount Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Paramount previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Paramount Gross Profit growth over the last 10 years. Please check Paramount's
gross profit and other
fundamental indicators for more details.
A Deeper Perspective
Although in the United States, the Securities and Exchange Commission has enforced strong rules to prevent insiders from engaging in insider trading, finding insiders among active shareholders of Paramount is not uncomon. Institutional investors typically avoid acquiring a high percentage of Paramount stocks because performing such an act may violate securities laws. They are usually not investing their own money, but rather making investments on behalf of their clients. Let's take a look at how the ownership of Paramount is distributed among investors.
Ownership Allocation
Paramount Group has a total of 217.21 Million outstanding shares. The majority of Paramount Group
outstanding shares are owned by
third-party entities. These institutional holders are usually referred to as non-private investors looking to secure positions in Paramount Group to benefit from reduced commissions. Consequently, institutional investors are subject to a different set of regulations than regular investors in Paramount. Please pay attention to any change in the institutional holdings of Paramount Group as this could imply that something significant has changed or about to change at the company. Remember, it does not matter who owns the company or if the company is currently
losing money. If the true value of the company is more than the market pays for it currently, you can still have a good investment opportunity.
| Retail Investors14.02% | Insiders15.85% | Institutions70.13% |
| Retail Investors | 14.02 |
| Insiders | 15.85 |
| Institutions | 70.13 |
| 2020 | 2021 | 2022 | 2023 (projected) |
Interest Expense | 144.21 M | 142.01 M | 143.86 M | 149.06 M | Gross Profit | 446.65 M | 461.35 M | 462.95 M | 489.24 M |
Asset Utilization
The concept of asset utilization usually refers to the revenue earned for every dollar of assets a company currently reports. The latest return on assets of Paramount indicates not a very effective usage of assets in July.
| Current Assets | 673.8 Million | 87.9 |
| Goodwill | 92.76 Million | 12.1 |
Paramount Group (PGRE) is showing strong potential for growth in the coming month. With a net asset value of
$8.45B and an end period cash flow of $449.8M, the company's
financial health is evident. Despite a net income loss of $28.2M, the company's return on assets stands at 0.0084, indicating that it is making effective use of its assets to generate earnings. The company's PEG ratio of 0.53 suggests that it may be undervalued given its earnings growth rate. This, coupled with a price to book ratio of 0.3811, further underscores the potential for significant upside. The market capitalization of Paramount Group is currently at
$1.21B. It's also worth noting that 70.13% of the company's shares are owned by institutions, indicating a high level of confidence from large-scale investors. The company's stock has a beta of 1.21, suggesting a slightly higher volatility than the market, which could mean higher potential returns for investors willing to accept the associated risk. The
fundamentals of Paramount Group are solid, and the company looks set to soar in August. However, as always, investors should conduct their own due diligence before making any investment decisions.
Paramount technical analysis indicates possible bounce-back
The latest Information Ratio of Paramount Group has risen to 0.1, indicating a minor enhancement in risk-adjusted performance. However, there are signs that the stock price may experience a downturn. Nevertheless, the
technical analysis suggests a potential rebound. This could present a timely opportunity for investors to consider this stock, as the predicted dip could offer a more advantageous entry point prior to the expected recovery. As always, investors should conduct thorough due diligence and assess their risk tolerance before making any investment decisions. Currently, Paramount Group exhibits a below-average downside deviation. It has an Information Ratio of 0.1 and a Jensen Alpha of 0.29. However, we recommend investors to further scrutinize Paramount Group's expected returns to ensure all indicators align with the current outlook about its relatively low value at risk. Understanding various
market volatility trends often assists investors in timing the market. Proper utilization of volatility indicators allows traders to gauge Paramount's stock risk against market volatility during both bullish and bearish trends.
The heightened level of volatility that accompanies bear markets can directly affect
Paramount's stock price, adding stress to investors as they witness their shares' value decline. This typically compels investors to rebalance their portfolios by purchasing different stocks as prices drop. In conclusion, Paramount Group (PGRE) has been on a remarkable trajectory, and this momentum is expected to continue into August. Despite the analyst overall consensus leaning towards a 'Sell', the stock's valuation real value is at
$5.08, slightly lower than its market value of
$5.21. This suggests that the stock is fairly valued at the moment. The analyst target price estimated value stands at $5.2, with the highest estimated target price reaching up to $7, indicating a possible upside. However, investors should also consider the possible downside price of $1.87. With the fiscal year ending in December, the next few months will be crucial for Paramount. While the analyst number of strong sells is 2, there is 1 strong buy recommendation, reflecting a mixed sentiment among analysts. Ultimately, investors should carefully weigh these factors before making a decision. .
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Rifka Kats is a Member of Macroaxis Editorial Board. Rifka writes about retail product and service companies from the perspective of a regular consumer and sophisticated investor at the same time. She is passionate about corporate ethics and equality in the workforce.
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