Breaking Down STAG Industrial, Inc. (STAG) Financial Health: Key Insights for Investors

You're looking at STAG Industrial, Inc. (STAG) because you want a clear picture of its industrial real estate health, and honestly, the Q3 2025 numbers show a defintely strong, stable operation in a shifting market. The direct takeaway is this: the company is executing well on its core strategy, translating robust industrial demand into higher cash flow and raising its full-year guidance. We saw Core Funds From Operations (FFO) per diluted share hit $0.65 for the third quarter, an 8.3% jump year-over-year, which is why management felt confident enough to raise the 2025 Core FFO guidance to a tight range of $2.52 to $2.54 per share. Plus, they're still maintaining portfolio stability with a high total occupancy rate of 95.8% as of September 30, 2025. But here's the quick math on opportunity: the Cash Rent Change on new and renewed leases was a massive 27.2% in Q3, showing their properties have significant pricing power right now, and that's the real engine driving the monthly dividend of around $1.49 annually. We need to dig into how they're managing that high lease retention and the long-term impact of refinancing a $300 million term loan to 2030, so let's break down the full picture, risks and all.

Revenue Analysis

If you're looking at STAG Industrial, Inc. (STAG), the direct takeaway is that its revenue engine is simple, strong, and showing significant pricing power in 2025. The company's revenue is almost entirely rental income from its portfolio of single-tenant industrial properties, like warehouses and distribution centers, which are still in high demand.

For the trailing twelve months (TTM) ending September 30, 2025, STAG Industrial reported total revenue of approximately $824 million. This represents a solid year-over-year growth rate of 9.62%, showing consistent expansion, even as the broader economy slows. The growth is fueled by two things: strategic property acquisitions and, more importantly, strong rent increases on existing leases.

Here's the quick math on the near-term performance:

• Q3 2025 Revenue: $211.1 million, a 10.4% year-over-year increase in rental income.
• Q2 2025 Revenue: $207.6 million, a 9.4% year-over-year increase.

The core revenue stream is exceptionally focused, as is typical for a Real Estate Investment Trust (REIT) specializing in this niche. The business segment breakdown is straightforward: nearly all revenue is generated from leasing its industrial real estate portfolio, which spans over 600 buildings across 41 states.

What this estimate hides is the underlying strength of the industrial market. The most significant change in the revenue stream isn't a new product line, but the sheer pricing power STAG Industrial is demonstrating. In Q3 2025, new and renewed leases on the operating portfolio saw a massive 27.2% average increase in cash rent, and a 40.6% increase in straight-line rent (the average rent over the full lease term). That's defintely a clear sign of strong demand for quality industrial space.

The revenue is highly diversified geographically and by tenant, which helps mitigate risk. For example, STAG Industrial's largest single tenant, Amazon, only accounts for 2.8% of the portfolio, and its top market, Chicago, is just 8.1%. This structure makes the income stream predictable and less vulnerable to a single tenant or regional economic downturn.

To get the full picture of how this top-line performance translates to shareholder value, you need to dig into the cost structure and Funds From Operations (FFO). You can find a deeper dive in the full post: Breaking Down STAG Industrial, Inc. (STAG) Financial Health: Key Insights for Investors.

Profitability Metrics

You need to know if STAG Industrial, Inc. (STAG) is earning enough from its assets, and more importantly, if that earning power is sustainable. The short answer is yes, the margins look strong, but you defintely need to peel back the layers on the net profit figure to understand the true underlying trend.

As of the third quarter of 2025, STAG's profitability metrics show a business with high operational efficiency, typical of a well-managed industrial Real Estate Investment Trust (REIT). The company's business model, which often uses triple-net leases (NNN) where the tenant pays for most operating expenses, is the structural reason behind these figures.

• Gross Profit Margin: The Q2 2025 gross profit margin stood at a high 79.8%.
• Net Profit Margin: The recent net profit margin is approximately 29.1%.
• YTD Net Income: Net income attributable to common stockholders for the nine months ended September 30, 2025, was $189.9 million.

Analysis of Operational Efficiency and Margins

The 79.8% gross profit margin is a clear signal of strong operational efficiency and cost management. This metric reflects the core rental business, showing that a very high percentage of revenue from rental income is retained after deducting property-level operating expenses. This is a good number, and it's what you want to see in a REIT focused on industrial assets.

For a deeper look at operating performance, we can use the year-to-date (YTD) Adjusted EBITDAre (Earnings Before Interest, Taxes, Depreciation, Amortization, and Real Estate adjustments) of $451.0 million as of September 30, 2025. When you compare this to the Last Twelve Months (LTM) revenue of $824 million, you get an operating performance proxy of around 54.7%. That's a solid margin that shows corporate overhead and other non-property expenses are well-controlled relative to the revenue base.

Net Profit: The One-Off Gain Caveat

The reported net profit margin of 29.1% is a significant jump from the prior year's 25.4%, and the company posted an earnings growth of 24.5% over the past year. But honestly, you need to be a realist here: this recent surge was heavily influenced by a non-recurring $60 million one-off gain.

Here's the quick math: strip out that one-off item, and the underlying net profitability is lower. This is why analysts are forecasting a -7.4% annual decline in earnings through 2028-the market expects the margin to shrink back down to a more normalized level, potentially around 21.1% by 2028. The growth story is strong, but the headline margin is inflated.

You can see the company's long-term strategy that drives these numbers in their Mission Statement, Vision, & Core Values of STAG Industrial, Inc. (STAG).

Peer Comparison and Trends

When you stack STAG against its industrial REIT peers, it holds its own, though its valuation signals some market skepticism about its future growth trajectory compared to the sector giants. Its recent core Funds From Operations (FFO) per share growth of 8.3% in Q3 2025 is slightly ahead of the broader Industrial REIT FFO growth of 8.0% for the same quarter.

The price-to-earnings (P/E) ratio tells a similar story but with a slight discount: STAG trades at a P/E of 27.4x, which is just below the US industrial REIT sector average of 28.2x. This small discount suggests investors are factoring in the expected earnings decline due to the non-recurring income boost wearing off.

The key takeaway is that STAG's operational performance is excellent, but its net profitability is facing a near-term headwind as the non-recurring income washes out of the financials. The core business is performing, but the reported bottom line is not a clean read on sustainable earnings growth.

Debt vs. Equity Structure

You need to know how STAG Industrial, Inc. (STAG) funds its growth, because a REIT's capital structure is the clearest signal of its financial risk and future capacity for acquisitions. The company maintains a balanced, moderate leverage profile, relying primarily on long-term unsecured debt to finance its portfolio expansion.

As of the third quarter of 2025, STAG's total financial debt stood at approximately $3.102 billion. This debt is overwhelmingly long-term, which is typical for a real estate investment trust (REIT) focused on stable, income-producing assets. Short-term debt, primarily from the unsecured credit facility, was only $110.0 million, demonstrating a low reliance on immediate-term financing for operations.

Here's the quick math: with total debt at roughly $3.102 billion and total equity at $3.500 billion as of September 30, 2025, the Debt-to-Equity (D/E) ratio sits at about 0.89x. This is a defintely manageable ratio for a capital-intensive industrial REIT, especially when compared to the broader REIT industry, which shows an average Debt-to-Market Assets ratio of 32.9% in Q3 2025.

• Debt-to-Equity of 0.89x is moderate for the sector.
• Net Debt to Annualized Run Rate Adjusted EBITDAre is 5.1x.

The company balances its debt and equity funding by favoring unsecured debt for flexibility, but it consistently taps the equity markets via its At-The-Market (ATM) program to keep the D/E ratio in check after major acquisitions. This is the classic REIT playbook: use debt for speed, then issue equity to delever. For instance, in September 2025, STAG refinanced a $300 million term loan, a move that pushes maturity risk further out and helps manage interest rate exposure.

The market recognizes this discipline. In May 2025, Moody's Investor Services upgraded the company's corporate credit rating to Baa2 with a stable outlook, a key investment-grade rating. This upgrade lowers the cost of future debt issuances, which is crucial in a higher-rate environment. What this estimate hides, however, is that while the current weighted average interest rate is competitive, any future debt will be issued at the prevailing, higher market rates, pressuring interest coverage. This is a critical factor for investors reviewing the full Breaking Down STAG Industrial, Inc. (STAG) Financial Health: Key Insights for Investors analysis.

The company's strategy is clear: maintain a strong investment-grade rating to keep borrowing costs low while using a mix of unsecured notes and equity to fund a consistent acquisition pipeline. This approach allows them to capture industrial real estate opportunities without overleveraging the balance sheet. Your next step should be to compare this D/E ratio against the main industrial REIT peers to see where STAG truly ranks on the risk spectrum.

Liquidity and Solvency

You need to know if STAG Industrial, Inc. (STAG) can cover its near-term bills, and the simple answer is yes, but you have to look past the typical corporate liquidity metrics. For a Real Estate Investment Trust (REIT), the traditional current ratio is less telling because most of their assets-the properties-are long-term and non-current. Still, the company maintains a tight, but manageable, liquidity position, backed by significant borrowing capacity.

Assessing STAG Industrial, Inc.'s Liquidity

The traditional liquidity ratios for STAG Industrial, Inc. (STAG) are what you'd expect for a REIT. The Current Ratio (current assets divided by current liabilities) for the trailing twelve months (TTM) ending October 2025 stood at approximately 1.25. This means they have $1.25 in current assets for every dollar of current liability. The Quick Ratio (which excludes less liquid assets like inventory, though a REIT has little of that) was tighter at 0.78. The quick ratio is defintely low, but for an industrial REIT with predictable, long-term leases, this isn't a red flag; cash flow is the real story.

Working capital-current assets minus current liabilities-is typically low or negative for a REIT because they carry minimal inventory and their primary assets (real estate) are non-current. The working capital trend is managed by matching short-term liabilities (like dividends payable and accounts payable) with cash flow from operations, not by hoarding cash on the balance sheet. Their real liquidity strength is in their total borrowing capacity and access to capital markets, which stood at a robust $904.1 million as of September 30, 2025.

Here's the quick math on their cash flow for the TTM ending September 30, 2025, which gives a clearer picture of their financial engine:

The cash flow statement overview shows a clear strategy: strong Operating Cash Flow (OCF) of $463.9 million is being consistently reinvested, resulting in a large negative Investing Cash Flow (ICF) of -$577.4 million. This is a growth-oriented capital recycling model. The positive Financing Cash Flow (FCF) of $60.8 million indicates they are raising capital, which is typical for a growing REIT that pays out most of its earnings as dividends (a high payout ratio is common for REITs). This is smart capital allocation.

The main liquidity strength is their access to capital and their high occupancy rate of 95.8% on the total portfolio as of September 30, 2025, which ensures consistent OCF. The primary risk is the need to continually access debt and equity markets to fund their investment pipeline and manage debt maturities, though they proactively refinanced a $300 million term loan in Q3 2025, pushing the maturity out to 2030. You can dive deeper into the investor base and capital structure by reading Exploring STAG Industrial, Inc. (STAG) Investor Profile: Who's Buying and Why?

The company is not facing an immediate liquidity concern, but rather managing an active growth-fueled capital structure. The key action for you is to monitor their debt-to-EBITDAre ratio and their spread on new debt issuances, as those are the true measures of their financial flexibility.

Valuation Analysis

You want to know if STAG Industrial, Inc. (STAG) is a buy, a hold, or a sell right now, and the consensus is clear: it's a Hold. The stock is trading near its analyst target, and while the dividend yield is attractive, the underlying earnings metrics suggest the valuation is stretched, not cheap.

As of November 2025, STAG's stock price sits around the $38.32 mark, which is very close to the average one-year target price of $38.89 set by Wall Street analysts. This small gap of less than 2% upside suggests the market has already priced in the near-term growth expectations for this industrial real estate investment trust (REIT). To be fair, the stock has shown resilience, with a +5.12% price change over the last 52 weeks, moving from a low of $28.61 to a high of $39.57. That's a solid rebound.

Here's the quick math on the key valuation multiples we look at:

• Price-to-Earnings (P/E) Ratio: The trailing P/E is high at 29.57. This is well above the average for the Real Estate sector, telling us investors are paying a premium for STAG's earnings.
• Price-to-Book (P/B) Ratio: At 2.08, the P/B ratio indicates the stock trades at more than double its accounting book value, another sign of a full valuation.
• Enterprise Value-to-EBITDA (EV/EBITDA): The trailing EV/EBITDA is around 15.3x. For a real estate operator, this multiple suggests a fair to slightly rich valuation compared to peers in the industrial REIT space.

The analyst community, based on recent reports, has a clear message. Nine analysts covering STAG Industrial, Inc. currently give the stock an average rating of Hold, with six analysts recommending a Hold and three recommending a Buy. No one is shouting 'Sell,' but they aren't defintely shouting 'Buy' either. This neutral stance reflects the high valuation multiples balanced against the company's stable industrial portfolio and its operational strengths, which you can read more about in their Mission Statement, Vision, & Core Values of STAG Industrial, Inc. (STAG).

What this estimate hides is the dividend picture. STAG pays a monthly dividend, which is a major draw for income investors. The annual dividend per share is about $1.49, providing a dividend yield of approximately 3.9%. Still, the payout ratio is a critical near-term risk. At around 114.6% of earnings, the company is paying out more in dividends than it is earning in net income. This is common for REITs, as they rely on Funds From Operations (FFO), but a payout ratio this high signals limited room for large dividend increases or a potential strain if earnings dip. This is a crucial point for income-focused investors to monitor.

Action: Before initiating a new position, wait for a price pullback closer to the 52-week average of $35.51, or look for a clear earnings beat that materially lowers the Payout Ratio.

Risk Factors

You're looking at STAG Industrial, Inc. (STAG) because you see the stability of industrial real estate, but even a solid REIT (Real Estate Investment Trust) has headwinds you need to map out. The biggest risk right now isn't an internal operational failure; it's the supply-demand imbalance in the broader industrial market, which is starting to pressure rent growth.

Honestly, the market is struggling to absorb all the new construction. In the second quarter of 2025 alone, net absorption-the total space newly leased minus the space vacated-was a negative 12 million square meters, a clear sign of oversupply. This has pushed year-over-year rent growth down to just 2.0% in Q2 2025, the weakest pace since 2012. That slowdown directly impacts STAG's ability to secure attractive lease terms and bump rents when contracts expire.

The company's single-tenant focus, while a strength when properties are full, is also an operational risk. A single-tenant building is either 100% occupied or 100% vacant. We're also seeing longer lease-up periods in some markets, especially for those larger, 'big box' assets, which could pressure revenue and occupancy rates if the trend persists. What this estimate hides is the potential for a sudden, material revenue drop if a major tenant defaults or chooses not to renew.

• Monitor new industrial supply in STAG's key markets.
• Watch for persistent vacancies in larger assets.

On the financial side, STAG's debt profile warrants a closer look. While management has been proactive, the company's debt-to-equity ratio has been increasing. Plus, an Altman Z-Score-a measure of a company's financial health and its probability of bankruptcy-of 1.38 places the company in the distress zone, which is a red flag you can't ignore. Here's the quick math on their leverage and financial performance for the third quarter of 2025:

Still, STAG has mitigation strategies that provide a good cushion. Their portfolio is highly diversified, which limits the blow from any single tenant or market. For example, their largest market, Chicago, represents only 8.1% of the portfolio, and their largest tenant, Amazon, accounts for just 2.8% of total revenue. This diversification is a deliberate firewall against single-point failure. Furthermore, they've been smart about managing their debt maturity schedule, recently refinancing a $300 million term loan to extend its maturity to March 15, 2030, which gives them significant near-term financial flexibility. They also focus on tenants with strong credit, with 31% of their tenants rated 'investment grade.' You can read more about the company's performance in the full post: Breaking Down STAG Industrial, Inc. (STAG) Financial Health: Key Insights for Investors.

Growth Opportunities

You are defintely right to look closely at STAG Industrial, Inc. (STAG) right now. The growth story here is not about flashy new tech; it's a precise, methodical execution of a proven industrial real estate model. The direct takeaway is that STAG's strategy of disciplined acquisitions and aggressive rent capture on renewals is set to deliver Core Funds From Operations (Core FFO) per share between $2.48 and $2.52 for the 2025 fiscal year, which is a solid, predictable increase.

The primary engine for growth remains their acquisition pipeline, but it's coupled with a powerful organic growth driver: market rent capture. The company has guided an acquisition volume range of $350 million to $650 million for 2025, which is a significant capital deployment. However, the real story is their leasing power. For new and renewal leases addressed in 2025, the Cash Rent Change-that's the increase in cash rent from the prior lease-is running at a strong 23.9% as of October 2025. That's money straight to the bottom line from existing assets.

Key Financial Projections for FY 2025

Here's the quick math on how management sees the year shaking out. The raised guidance reflects confidence in their ability to lock in higher rents and maintain high occupancy, which stood at 96.8% for the Operating Portfolio as of the third quarter of 2025.

Strategic Moves and Competitive Edge

STAG Industrial, Inc. (STAG) is also making smart moves to strengthen its balance sheet and diversify its growth avenues beyond just acquisitions. The focus on the development pipeline is a clear strategic initiative, giving them a higher stabilized cash yield. For example, a recent development project in Nashville completed its lease-up with an expected stabilized cash yield of 9.3%. That's a great return on capital.

The company's competitive advantages are structural, not fleeting, and they position STAG for long-term outperformance in the industrial sector. You can see their foundational commitment to this approach by reading their Mission Statement, Vision, & Core Values of STAG Industrial, Inc. (STAG).

• Diversified Portfolio: Owns 601 buildings across 41 states, mitigating regional economic risk.
• Credit Quality: Credit losses have been less than 0.1% of revenues since its IPO.
• Financial Flexibility: Moody's upgraded its credit rating to Baa2 in 2025.
• Market Size: Their market share is still less than 1% of the over $1 trillion U.S. industrial market.

What this estimate hides is the ongoing pressure from new industrial supply in some markets, which could stretch out lease-up times. Still, the recent refinancing of a $300 million term loan, extending its maturity to 2030, shows management is proactively managing capital structure risk to support their growth trajectory. This financial maneuvering gives them the liquidity to pursue more deals as seller activity increases toward the end of the year.

Next Step: Review the Q3 2025 Supplemental Schedule to verify the Core FFO per share run-rate against the full-year guidance.