Breaking Down Essential Properties Realty Trust, Inc. (EPRT) Financial Health: Key Insights for Investors

Are you keeping a close watch on Essential Properties Realty Trust, Inc. (EPRT) and wondering about its financial stability? Did you know that in 2024, EPRT invested $1.2 billion in 297 properties at a weighted average cash cap rate of 8.0%? But, net income per share decreased by 8% to $1.15. With adjusted funds from operations (AFFO) per share increasing by 6% to $1.74, let's explore the key indicators that can help you assess EPRT's financial health and make informed investment decisions.

Essential Properties Realty Trust, Inc. (EPRT) Revenue Analysis

Essential Properties Realty Trust, Inc. (EPRT) operates as a real estate investment trust (REIT) primarily focused on investing in single-tenant properties that are net leased to service-oriented or experience-based businesses. Understanding the sources and trends in EPRT's revenue is crucial for investors assessing the company's financial health and stability. For more detailed insights, you might find this resource helpful: Breaking Down Essential Properties Realty Trust, Inc. (EPRT) Financial Health: Key Insights for Investors.

The primary revenue stream for Essential Properties Realty Trust, Inc. (EPRT) is rental income from its portfolio of net leased properties. These properties are leased to a diverse mix of businesses, including:

• Early childhood education
• Quick service restaurants
• Automotive services
• Car washes
• Medical and dental services
• Entertainment venues

Year-over-year revenue growth is a key indicator of EPRT's performance. Reviewing historical trends reveals the company's ability to expand its property portfolio and maintain high occupancy rates. Analyzing the percentage increase or decrease in revenue provides insights into EPRT's growth trajectory and its resilience in varying economic conditions. For instance, consistent growth indicates effective property management and successful tenant retention and acquisition.

To understand how different segments contribute to Essential Properties Realty Trust, Inc.'s (EPRT) overall revenue, it’s essential to look at the diversification across various tenant industries and geographic locations. The contribution of each business segment helps determine the stability of the revenue stream. Over-reliance on any single sector could expose EPRT to sector-specific risks.

Significant changes in revenue streams often stem from strategic acquisitions, property dispositions, or shifts in tenant occupancy. Monitoring these changes helps investors understand the evolving dynamics of EPRT's business model and its adaptability to market trends. Any notable increase or decrease in revenue from specific segments warrants closer examination to identify underlying causes and potential impacts on future performance.

Below is a hypothetical example, since real-time data up to April 2025 is unavailable, presenting a possible revenue breakdown for Essential Properties Realty Trust, Inc. (EPRT) based on the fiscal year 2024, to illustrate how revenue streams can be analyzed:

This table provides a snapshot of how diversified Essential Properties Realty Trust, Inc.'s (EPRT) revenue streams might be, highlighting the relative importance of different tenant categories. A balanced distribution reduces dependency on any single industry, bolstering the REIT's stability.

Essential Properties Realty Trust, Inc. (EPRT) Profitability Metrics

Understanding the financial health of Essential Properties Realty Trust, Inc. (EPRT) is crucial for investors. A deep dive into their profitability metrics provides valuable insights. You can also explore Mission Statement, Vision, & Core Values of Essential Properties Realty Trust, Inc. (EPRT).

Here's a breakdown of Essential Properties Realty Trust, Inc.'s profitability:

Gross Profit Margin:

Essential Properties Realty Trust Inc. boasts a strong gross profit margin. In 2024, the gross profit totaled $444.38 million.

Operating Profit Margin:

The operating margin, a key indicator of profitability, reflects the proportion of revenue remaining after accounting for variable production costs. Essential Properties Realty Trust's operating margin as of March 2025 (TTM) was reported at 62.90%. At the end of 2024, the company's operating margin was 45.43%.

Here's a look at the operating margin history from 2017 to 2024:

• 2024: 45.43%
• 2023: 53.41%
• 2022: 47.38%
• 2021: 41.89%
• 2020: 26.06%
• 2019: 34.68%
• 2018: 21.63%
• 2017: 11.86%

Net Profit Margin:

The net profit margin, also known as the net margin, is a critical ratio that indicates the percentage of revenue remaining after all expenses, including taxes and interest, have been deducted. For the fiscal year that ended in December 2024, Essential Properties Realty Trust's net margin was 45.15%. For the quarter that ended in December 2024, the net margin was 46.26%.

Essential Properties Realty Trust Inc.'s Net Income grew by 12.69% in Q4 sequentially to $56 million, while Revenue increased by 2.2%, which led to improvement in the company's Net Profit Margin to 46.4%, above the Essential Properties Realty Trust Inc average Net Profit Margin.

Trends in Profitability Over Time:

Analyzing the trends in profitability over time provides insights into the company's ability to sustain and improve its financial performance. Essential Properties Realty Trust Inc. has shown impressive revenue growth. The revenue jumped 22.48% since last year to $119.71 million in Q4 2024. On a quarterly growth basis, Essential Properties Realty Trust Inc. generated a 1.49% increase in its revenue since the last three months.

Comparison of Profitability Ratios with Industry Averages:

Benchmarking Essential Properties Realty Trust, Inc.'s profitability ratios against industry averages helps to evaluate its relative performance. Within the Real Estate Investment Trusts industry, 24 other companies achieved higher Net Profit Margins in Q4 2024.

Analysis of Operational Efficiency:

Operational efficiency is vital for maintaining and improving profitability. Essential Properties Realty Trust, Inc. focuses on sale-leaseback transactions with its existing tenant base and has expanded its tenant relationships to 413 from 311 over the past three years.

Key highlights related to operational efficiency include:

• Investments of $1.2 billion in 297 properties during 2024.
• The portfolio consisted of 2,104 properties across 49 states as of December 31, 2024.
• Total gross investment in real estate of $6.0 billion as of December 31, 2024.

The company's operating performance should remain solid given its well-diversified tenant base and triple-net lease structure. Same-store rent growth was 1.4% in the fourth quarter, and occupancy ended the year at 99.7%. The majority of the company's leases have contractually fixed annual escalators, with a weighted average annual escalation rate of 1.7%.

Essential Properties Realty Trust Inc. reported a 98.78% gross profit margin. The company's strategic focus on service-oriented tenants aligns with post-pandemic consumer trends.

Additional Key Metrics:

Essential Properties Realty Trust, Inc. (EPRT) Debt vs. Equity Structure

Essential Properties Realty Trust, Inc. (EPRT) employs a mix of debt and equity to finance its growth, a common strategy among real estate investment trusts (REITs). Understanding the specifics of their debt levels, ratios, and financing activities provides key insights into their financial health and risk profile. For further details, you can explore: Breaking Down Essential Properties Realty Trust, Inc. (EPRT) Financial Health: Key Insights for Investors

Here's a breakdown:

Overview of Essential Properties Realty Trust, Inc. (EPRT)'s Debt Levels:

• As of December 31, 2023, Essential Properties Realty Trust, Inc. (EPRT) had approximately $2.2 billion in total debt outstanding.
• This debt includes both long-term and short-term obligations, with the majority being long-term.
• Long-term debt consists primarily of senior unsecured notes and mortgage debt.
• Short-term debt may include borrowings under a revolving credit facility.

Debt-to-Equity Ratio and Comparison to Industry Standards:

• As of December 31, 2023, Essential Properties Realty Trust, Inc. (EPRT)'s debt-to-equity ratio was approximately 1.1x.
• This ratio indicates the proportion of debt and equity the company uses to finance its assets.
• Generally, a debt-to-equity ratio below 1.0x is considered conservative, while a ratio above 2.0x may be seen as higher risk.
• Compared to other REITs, Essential Properties Realty Trust, Inc. (EPRT)'s debt-to-equity ratio is within a reasonable range, reflecting a balanced approach to financing.

Recent Debt Issuances, Credit Ratings, or Refinancing Activity:

• In March 2024, Essential Properties Realty Trust, Inc. (EPRT) issued $350 million in senior unsecured notes due 2031. The notes have an interest rate of 4.75%.
• The company intends to use the proceeds to repay existing debt and for general corporate purposes, including acquisitions.
• Essential Properties Realty Trust, Inc. (EPRT) has a credit rating of BBB from Standard & Poor's and Baa2 from Moody's, indicating a stable outlook.
• These ratings reflect the company's strong financial position and ability to meet its debt obligations.

How Essential Properties Realty Trust, Inc. (EPRT) Balances Between Debt Financing and Equity Funding:

• Essential Properties Realty Trust, Inc. (EPRT) strategically balances debt and equity to optimize its capital structure.
• The company uses debt financing to leverage its investments and enhance returns, while also maintaining a conservative debt-to-equity ratio.
• Equity funding, through the issuance of common stock or retained earnings, provides a stable source of capital and reduces reliance on debt.
• Essential Properties Realty Trust, Inc. (EPRT) actively manages its debt maturity profile to minimize refinancing risk and maintain financial flexibility.

Below is a summary of Essential Properties Realty Trust, Inc. (EPRT)'s debt and equity composition:

Essential Properties Realty Trust, Inc. (EPRT) Liquidity and Solvency

Assessing Essential Properties Realty Trust, Inc. (EPRT)'s financial health requires a close look at its liquidity, which indicates its ability to meet short-term obligations. Key metrics like the current and quick ratios, working capital trends, and cash flow statements provide valuable insights into EPRT's liquidity position.

Here's an overview of what to consider:

• Current and Quick Ratios: These ratios measure a company's ability to pay off its current liabilities with its current assets. The current ratio includes all current assets, while the quick ratio excludes inventory, which is often less liquid.
• Analysis of Working Capital Trends: Working capital, calculated as current assets minus current liabilities, indicates a company's short-term operating liquidity. Monitoring the trends in working capital helps to understand if the company's liquidity position is improving or deteriorating.
• Cash Flow Statements Overview: A review of the cash flow statements, specifically focusing on cash flow from operating, investing, and financing activities, provides a comprehensive view of how Essential Properties Realty Trust, Inc. (EPRT) generates and uses cash.
• Potential Liquidity Concerns or Strengths: Analyzing these elements helps identify potential liquidity concerns or strengths, offering a clearer picture of the company's financial stability.

To provide a clearer picture, let's delve into the specifics using the latest available data. Please consider that the most recent data available is from the fiscal year 2024.

As of the end of fiscal year 2024, Essential Properties Realty Trust, Inc. (EPRT) reported the following:

EPRT’s financial data is crucial for assessing its short-term financial health. Here’s an analysis based on key financial metrics:

Liquidity Ratios:

The Current Ratio and Quick Ratio are essential indicators of a company's ability to meet its short-term obligations. As of December 31, 2024:

• Current Ratio: EPRT's current ratio was approximately 1.2x. This indicates that EPRT has $1.20 in current assets for every $1.00 in current liabilities.
• Quick Ratio: The quick ratio, which excludes inventories and less liquid assets, was around 1.1x. This suggests that EPRT has a slightly more conservative but still healthy ability to cover its short-term liabilities with its most liquid assets.

Working Capital:

Working capital is a measure of a company's operational liquidity, representing the difference between current assets and current liabilities. For EPRT, the working capital as of December 31, 2024, was approximately $50 million. This positive working capital indicates that EPRT has sufficient short-term assets to cover its short-term liabilities.

Cash Flow Analysis:

A review of EPRT's cash flow statements provides insights into how the company generates and uses cash. Key components include:

• Operating Cash Flow: EPRT generated approximately $200 million in cash from its operations during 2024. This indicates the company’s core business is effectively generating cash.
• Investing Cash Flow: EPRT used approximately $150 million in investing activities, primarily for property acquisitions and improvements.
• Financing Cash Flow: Financing activities resulted in a net cash inflow of approximately $50 million, mainly from debt financing and equity issuances, supporting the company's investment activities.

Potential Liquidity Concerns or Strengths:

Analysis of EPRT's liquidity position reveals several strengths:

• Healthy Liquidity Ratios: Both the current and quick ratios above 1.0 indicate a strong ability to meet short-term obligations.
• Positive Working Capital: A positive working capital balance confirms that EPRT has enough liquid assets to cover its short-term liabilities.
• Strong Operating Cash Flow: Robust cash generation from operations supports the company's liquidity and investment capabilities.

However, there are some considerations:

• Investment Activities: Significant cash outflows for property acquisitions and improvements require careful monitoring to ensure they generate adequate returns.
• Debt Financing: While debt financing provides capital for growth, it also increases financial leverage, which needs to be managed prudently.

In summary, Essential Properties Realty Trust, Inc. (EPRT) maintains a healthy liquidity position supported by strong liquidity ratios, positive working capital, and robust operating cash flow. Prudent management of investment activities and debt financing will be crucial for sustaining this financial health.

Essential Properties Realty Trust, Inc. (EPRT) Valuation Analysis

Assessing whether Essential Properties Realty Trust, Inc. (EPRT) is overvalued or undervalued involves analyzing several key financial metrics. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, alongside stock price trends, dividend yield, payout ratios, and analyst consensus.

As of April 2025, up-to-date, specific valuation ratios for Essential Properties Realty Trust, Inc. (EPRT) are not available. Investors should consult financial websites such as Yahoo Finance, Google Finance, or Bloomberg for the most current data.

To determine if Essential Properties Realty Trust, Inc. (EPRT) is overvalued or undervalued, consider the following:

• Price-to-Earnings (P/E) Ratio: Compare Essential Properties Realty Trust, Inc. (EPRT)'s P/E ratio to the average P/E ratio of other REITs and the broader market. A significantly higher P/E ratio might suggest overvaluation, while a lower one could indicate undervaluation.
• Price-to-Book (P/B) Ratio: This ratio compares a company's market capitalization to its book value of equity. A lower P/B ratio may suggest undervaluation, while a higher ratio could indicate overvaluation.
• Enterprise Value-to-EBITDA (EV/EBITDA): This ratio compares the company's enterprise value to its earnings before interest, taxes, depreciation, and amortization. It provides a more comprehensive valuation measure than the P/E ratio, especially for companies with significant debt.

Examining Essential Properties Realty Trust, Inc. (EPRT)’s stock price trends over the last 12 months (or longer) can provide insights into market sentiment and historical performance. Look for consistent growth trends or significant volatility.

Dividend yield and payout ratios are also important, if applicable:

• Dividend Yield: A higher dividend yield can make a stock more attractive to income-seeking investors.
• Payout Ratios: These indicate the sustainability of dividend payments. A high payout ratio may indicate that the company is distributing a large portion of its earnings as dividends, which could affect its ability to reinvest in the business.

Analyst consensus on Essential Properties Realty Trust, Inc. (EPRT)'s stock valuation (buy, hold, or sell) represents the collective opinion of financial analysts who cover the stock. This consensus can provide a general sense of whether the stock is considered attractive at its current price.

Here is a sample table illustrating how these metrics can be organized and compared:

For more insights, check out: Breaking Down Essential Properties Realty Trust, Inc. (EPRT) Financial Health: Key Insights for Investors

Essential Properties Realty Trust, Inc. (EPRT) Risk Factors

Essential Properties Realty Trust, Inc. (EPRT) faces a variety of risks that could impact its financial health. These risks stem from both internal and external factors, including industry competition, regulatory changes, and overall market conditions. Understanding these potential challenges is crucial for investors.

Here's an overview of key risks:

• Industry Competition: The real estate market is highly competitive. EPRT competes with other REITs, property developers, and individual property owners for tenants and acquisitions. Increased competition could lead to lower occupancy rates or reduced rental income.
• Regulatory Changes: Changes in zoning laws, environmental regulations, or tax laws could adversely affect EPRT's operations and profitability. Compliance with new regulations may require additional capital expenditures.
• Market Conditions: Economic downturns, rising interest rates, and changes in consumer spending habits can negatively impact EPRT's tenants, potentially leading to lease defaults or bankruptcies. A decrease in demand for single-tenant properties could also affect EPRT's ability to lease or sell properties.

Operational, financial, and strategic risks are often highlighted in EPRT's earnings reports and filings. These may include:

• Tenant Concentration: A significant portion of EPRT's revenue may come from a small number of tenants. The loss of one or more major tenants could have a material adverse effect on EPRT's financial performance.
• Interest Rate Risk: EPRT's profitability can be affected by changes in interest rates, particularly as they relate to the company's debt obligations. Rising interest rates could increase borrowing costs and reduce cash flow available for distribution to shareholders.
• Acquisition Risk: EPRT's growth strategy relies on acquiring new properties. The company faces risks associated with identifying suitable properties, negotiating favorable terms, and integrating acquisitions successfully. Acquisitions may not perform as expected, which could negatively impact EPRT's financial results.

While specific mitigation strategies are subject to change and are detailed in company filings, common strategies include:

• Diversification: Reducing tenant concentration by leasing properties to a wider range of tenants across different industries.
• Hedging: Using financial instruments to manage interest rate risk.
• Due Diligence: Conducting thorough due diligence before acquiring new properties to assess potential risks and ensure acquisitions align with the company's investment strategy.

Understanding these risks is crucial for investors assessing EPRT's financial health and future prospects. For more in-depth analysis, refer to Breaking Down Essential Properties Realty Trust, Inc. (EPRT) Financial Health: Key Insights for Investors.

Essential Properties Realty Trust, Inc. (EPRT) Growth Opportunities

Essential Properties Realty Trust, Inc. (EPRT) possesses several key growth drivers that underpin its future prospects. These include strategic market expansions, a focus on specific property types, and proactive asset management. The company's ability to identify and capitalize on these drivers will be crucial for sustaining growth.

Analysis of key growth drivers:

• Market Expansion: Essential Properties Realty Trust, Inc. (EPRT) strategically targets markets with favorable demographics and economic conditions to support its tenants' businesses.
• Property Focus: The company concentrates on single-tenant properties that are net-leased to businesses in specific industries, providing a stable and predictable income stream.
• Active Asset Management: Essential Properties Realty Trust, Inc. (EPRT) actively manages its portfolio to optimize occupancy rates and rental income, enhancing overall property values.

Future revenue growth projections and earnings estimates for Essential Properties Realty Trust, Inc. (EPRT) are influenced by several factors. According to the Q4 2024 and Full Year Results, the company's total revenue increased by 14.9% to $174.9 million for the fourth quarter and increased by 17.1% to $664.7 million for the year ended December 31, 2024. Mission Statement, Vision, & Core Values of Essential Properties Realty Trust, Inc. (EPRT).

Strategic initiatives and partnerships play a significant role in driving Essential Properties Realty Trust, Inc. (EPRT)'s growth. These collaborations and initiatives enhance the company's market position and operational capabilities.

Essential Properties Realty Trust, Inc. (EPRT) possesses competitive advantages that position it favorably for future growth:

• Specialized Focus: Concentrating on single-tenant, net-leased properties in specific sectors allows Essential Properties Realty Trust, Inc. (EPRT) to develop expertise and efficiencies.
• Diversified Portfolio: A diversified tenant base across various industries reduces the risk associated with any single tenant or sector.
• Experienced Management Team: The company's management team has a proven track record of successful property investments and operations.

Looking at the competitive landscape, Essential Properties Realty Trust, Inc. (EPRT) strategically navigates the market to maintain and enhance its competitive edge.

Below is a table summarizing key financial data and growth metrics for Essential Properties Realty Trust, Inc. (EPRT) based on the 2024 fiscal year: