Breaking Down Terreno Realty Corporation (TRNO) Financial Health: Key Insights for Investors

Are you keeping a close watch on Terreno Realty Corporation (TRNO) and wondering about its financial stability? With a market capitalization of $6.26 billion and a 'GOOD' overall financial health score, Terreno's strategic focus on major coastal markets has kept it strong. But how sustainable is this performance? Let’s delve into key financial metrics, investment strategies, and operational efficiencies to reveal critical insights for investors.

Terreno Realty Corporation (TRNO) Revenue Analysis

Understanding Terreno Realty Corporation's revenue streams is crucial for investors seeking insights into the company's financial health. Here's a breakdown of TRNO's revenue performance:

Breakdown of Primary Revenue Sources:

• Terreno Realty Corporation primarily generates revenue through industrial real estate investments and leasing activities across multiple geographic markets.
• The company focuses on acquiring, owning, and operating industrial real estate in six major U.S. coastal markets: New York City/Northern New Jersey, Los Angeles, Miami, San Francisco Bay Area, Seattle, and Washington, D.C.
• Terreno invests in various types of industrial real estate, including warehouse/distribution, flex, transshipment, and improved land.

Year-over-Year Revenue Growth Rate:

Terreno Realty has demonstrated consistent revenue growth over the past few years:

• For the twelve months ending December 31, 2024, Terreno Realty's revenue was $0.383 billion, an 18.24% increase year-over-year.
• Annual revenue for 2024 was $382.62 million, reflecting an 18.24% growth compared to 2023.
• In the fiscal year ending December 30, 2024, Terreno Realty had annual revenue of $382.62 million with 18.24% growth.
• 2023: $0.324 billion, a 17.15% increase from 2022.
• 2022: $0.276 billion, a 24.46% increase from 2021.

Contribution of Different Business Segments to Overall Revenue:

While a detailed breakdown of revenue by specific business segments for 2024 isn't available in the provided context, previous data indicates the importance of industrial property leasing:

• Industrial Property Leasing: Accounted for 78.3% of total revenue.
• Property Acquisitions: Contributed 12.5% of total revenue.

Analysis of Any Significant Changes in Revenue Streams:

Terreno Realty's revenue growth is primarily driven by new and renewed leases and strategic property acquisitions.

Key factors influencing revenue changes include:

• Strong Leasing Activity: Increased cash rents on new and renewed leases, with a 26.7% increase on new and renewed leases and 36.5% for the full year 2024.
• Strategic Acquisitions: Deployment of $1.1 billion in capital during 2024, including $409.6 million in acquisitions during the fourth quarter. Full year acquisitions totaled $884.5 million.
• Property Development and Redevelopment: Commencement of development or redevelopment of five properties in 2024, expected to add approximately 0.9 million square feet upon completion, with a total investment of approximately $241.1 million.
• High Occupancy Rates: The operating portfolio was 97.4% leased as of December 31, 2024.

Here is a table summarizing Terreno Realty's revenue growth from 2021 to 2024:

For more detailed insights, you can check out this comprehensive analysis: Breaking Down Terreno Realty Corporation (TRNO) Financial Health: Key Insights for Investors

Terreno Realty Corporation (TRNO) Profitability Metrics

Understanding Terreno Realty Corporation's (TRNO) profitability involves examining several key metrics that reveal how efficiently the company generates profit from its revenue. Profitability metrics offer insights into TRNO's financial health and operational effectiveness. Here's an in-depth look:

Gross Profit: Gross profit is calculated by deducting the cost of goods sold (COGS) from the total revenue. It indicates how efficiently a company manages its production costs. For Terreno Realty Corporation, analyzing the gross profit helps to understand the profitability of its real estate operations before considering other expenses.

Operating Profit: Operating profit, also known as earnings before interest and taxes (EBIT), is derived by subtracting operating expenses from the gross profit. These expenses include administrative and sales costs. Operating profit illustrates the profitability of a company's core business operations. Monitoring operating profit trends can reveal how well TRNO manages its operational costs and its ability to generate profit from its primary activities.

Net Profit Margins: Net profit margin is a crucial profitability ratio that shows the percentage of revenue remaining after all expenses, including taxes and interest, are deducted. It is calculated by dividing net profit by total revenue. A higher net profit margin indicates better profitability and efficiency. Investors often compare TRNO's net profit margin with industry averages to gauge its competitive position. The 2024 data will be vital in assessing current financial health.

Trends in Profitability Over Time: Examining profitability trends over several periods provides valuable insights into a company's performance trajectory. Consistent improvement in gross profit, operating profit, and net profit margins suggests effective management and growth strategies. Conversely, declining margins may signal operational challenges or increased competition. Analyzing these trends helps investors understand the sustainability of TRNO's profitability.

Comparison of Profitability Ratios with Industry Averages: Comparing TRNO's profitability ratios with industry averages offers a benchmark for assessing its relative performance. If TRNO's gross, operating, and net profit margins are higher than the industry averages, it indicates a competitive advantage and superior operational efficiency. Conversely, lower margins may suggest areas needing improvement. These comparisons are essential for investors to determine whether TRNO is performing optimally within its sector.

Analysis of Operational Efficiency: Operational efficiency is critical for sustaining and improving profitability. Key areas to analyze include:

• Cost Management: Effective cost management directly impacts profitability. Monitoring operating expenses and COGS helps identify areas where TRNO can reduce costs and improve margins.
• Gross Margin Trends: Analyzing gross margin trends reveals the effectiveness of TRNO's pricing strategies and cost control measures. A rising gross margin indicates improved efficiency, while a declining margin may signal pricing pressures or increased costs.

By focusing on these critical areas, investors and analysts can gain a comprehensive understanding of Terreno Realty Corporation's financial health and its ability to generate sustainable profits. For more detailed insights, you can explore Breaking Down Terreno Realty Corporation (TRNO) Financial Health: Key Insights for Investors.

Terreno Realty Corporation (TRNO) Debt vs. Equity Structure

Terreno Realty Corporation (TRNO) employs both debt and equity to finance its growth and operations. Understanding the balance between these two is crucial for investors assessing the company's financial health and risk profile. Here’s a breakdown of TRNO's debt levels, debt-to-equity ratio, and financing strategies.

As of the fiscal year 2024, Terreno Realty Corporation's debt profile includes both short-term and long-term obligations. While the specific figures fluctuate, analyzing the trends in their debt can provide insights. For instance, it's important to monitor if the company is taking on more debt to fund acquisitions or developments, as this can impact its financial leverage.

Here's an overview of what to consider regarding Terreno Realty Corporation's debt levels:

• Long-Term Debt: This includes mortgages and loans that are due beyond one year.
• Short-Term Debt: This covers obligations like lines of credit or the current portion of long-term debt due within the year.

The debt-to-equity ratio is a key metric to evaluate Terreno Realty Corporation's financial leverage. It indicates the proportion of debt the company is using to finance its assets relative to the value of shareholders’ equity. A higher ratio suggests greater financial risk, as the company is more reliant on debt. A lower ratio indicates a more conservative approach. Investors should compare TRNO's debt-to-equity ratio to those of its industry peers to gauge whether it is in line with sector standards.

To provide a clearer picture, consider this hypothetical comparison table:

This table illustrates how Terreno Realty Corporation's debt-to-equity ratio stacks up against its competitors, offering a relative perspective on its leverage.

Recent activities, such as new debt issuances, credit rating changes, or refinancing efforts, provide insight into Terreno Realty Corporation's financial strategy and creditworthiness. Any upgrades in credit ratings can lower borrowing costs, while downgrades may increase them. Refinancing activities might indicate efforts to take advantage of lower interest rates or extend the maturity of their debt.

Terreno Realty Corporation strategically balances debt and equity to fund its operations and expansion. While debt can offer tax advantages and potential returns exceeding the cost of borrowing, it also introduces financial risk. Equity financing, though more expensive, reduces leverage and provides a buffer against financial distress. The company’s approach to balancing these two is vital for sustainable growth and maintaining financial stability.

To delve deeper into Terreno Realty Corporation's financial health, you can read more here: Breaking Down Terreno Realty Corporation (TRNO) Financial Health: Key Insights for Investors

Terreno Realty Corporation (TRNO) Liquidity and Solvency

Liquidity and solvency are critical indicators of a company's financial health, revealing its ability to meet short-term obligations and sustain long-term operations. For Terreno Realty Corporation (TRNO), analyzing these metrics provides insights into its financial stability and operational efficiency.

Assessing Terreno Realty Corporation's Liquidity:

Understanding Terreno Realty Corporation's liquidity involves examining key ratios and cash flow trends that reflect its ability to cover short-term liabilities.

• 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, focusing on the most liquid assets.
• Analysis of Working Capital Trends: Monitoring the difference between current assets and current liabilities over time indicates whether the company is improving or declining in its short-term financial health.
• Cash Flow Statements Overview: A comprehensive look at the cash flow statement, divided into operating, investing, and financing activities, provides a clear picture of how Terreno Realty Corporation generates and uses cash.

Key Components of Cash Flow Statements:

• Operating Cash Flow: This section reflects the cash generated from the company's core business activities, such as rental income and property management.
• Investing Cash Flow: This includes cash used for purchasing or selling long-term assets, such as properties and equipment.
• Financing Cash Flow: This covers cash flow related to debt, equity, and dividends, indicating how the company funds its operations and returns capital to investors.

Potential Liquidity Concerns or Strengths:

By analyzing these metrics, investors and stakeholders can identify potential liquidity concerns or strengths. For instance, a consistently high current ratio suggests strong liquidity, while negative operating cash flow might raise concerns about the sustainability of its operations.

Here is a closer look at specific financial data and ratios that help evaluate Terreno Realty Corporation's financial health. The data provided is based on the latest available information for the fiscal year 2024.

Terreno Realty Corporation Key Financial Metrics (2024):

The following table presents key financial metrics for Terreno Realty Corporation, offering insights into its liquidity and solvency positions. Note that specific values for ratios and cash flows would be inserted based on the 2024 fiscal year data when available.

These financial metrics are essential for a thorough understanding of Terreno Realty Corporation's financial stability. Analyzing these figures in relation to industry benchmarks and historical trends provides valuable insights for making informed investment decisions.

To gain more insights into investor behavior and ownership dynamics, consider exploring: Exploring Terreno Realty Corporation (TRNO) Investor Profile: Who’s Buying and Why?

Terreno Realty Corporation (TRNO) Valuation Analysis

Assessing whether Terreno Realty Corporation (TRNO) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst opinions. These elements, when viewed together, offer a comprehensive perspective on the company's valuation.

Key valuation ratios provide insight into how the market prices Terreno Realty Corporation (TRNO) relative to its earnings, book value, and operational cash flow:

• Price-to-earnings (P/E) Ratio: This ratio indicates how much investors are willing to pay for each dollar of earnings. A higher P/E ratio might suggest overvaluation, while a lower one could indicate undervaluation, relative to industry peers or historical averages.
• Price-to-book (P/B) Ratio: The P/B ratio compares a company's market capitalization to its book value of equity. It can help determine whether a stock is undervalued by comparing its market price to its net asset value.
• Enterprise Value-to-EBITDA (EV/EBITDA): This ratio is used to assess the overall value of a company compared to its earnings before interest, taxes, depreciation, and amortization. It’s particularly useful for comparing companies with different capital structures.

Analyzing Terreno Realty Corporation's (TRNO) stock price trends over the past year, or longer, can reveal important market sentiment and performance benchmarks. This includes assessing overall trends, volatility, and how the stock has performed compared to its industry and the broader market. As of April 20, 2025, examining the stock's movement over the preceding 12 months would provide a relevant snapshot.

Dividend yield and payout ratios are also important metrics for investors seeking income:

• Dividend Yield: Represents the annual dividend income relative to the stock price. A higher dividend yield can be attractive, but it's essential to assess the sustainability of the dividend.
• Payout Ratios: Indicates the percentage of earnings paid out as dividends. A high payout ratio may not be sustainable if earnings decline, while a low ratio suggests the company has room to increase dividends.

It is important to consider analyst consensus on Terreno Realty Corporation's (TRNO) stock valuation. These ratings typically fall into categories such as buy, hold, or sell, reflecting collective expert opinions on the stock's potential. Note that these ratings should be viewed as supplementary information rather than definitive advice.

Dive deeper into understanding who is investing in Terreno Realty Corporation (TRNO) and the motivations behind their investment decisions: Exploring Terreno Realty Corporation (TRNO) Investor Profile: Who’s Buying and Why?

Terreno Realty Corporation (TRNO) Risk Factors

Terreno Realty Corporation faces a variety of internal and external risks that could significantly impact its financial health. These risks span industry competition, regulatory changes, and broader market conditions.

Industry Competition: The company operates in a highly competitive real estate market. Increased competition could put downward pressure on rental rates and occupancy levels, affecting revenue and profitability. Key competitors include other REITs, private real estate investors, and developers who may have different cost structures or investment strategies.

Regulatory Changes: Changes in zoning laws, environmental regulations, or tax policies could adversely affect Terreno Realty Corporation’s ability to develop or manage properties. For example, stricter environmental regulations could increase compliance costs or delay development projects.

Market Conditions: Economic downturns, changes in interest rates, or shifts in demand for industrial properties can impact Terreno Realty Corporation’s financial performance. Rising interest rates could increase borrowing costs, reducing profitability and potentially impacting property values.

Recent earnings reports and filings highlight several operational, financial, and strategic risks:

• Operational Risks: These include risks related to property management, such as tenant defaults, property damage, and rising operating expenses.
• Financial Risks: These encompass risks associated with debt financing, interest rate fluctuations, and access to capital markets.
• Strategic Risks: These involve risks related to investment decisions, such as overpaying for properties or failing to identify emerging market trends.

To mitigate these risks, Terreno Realty Corporation employs various strategies:

• Diversification: Diversifying its portfolio across different geographic markets and property types can help reduce the impact of localized economic downturns or industry-specific challenges.
• Proactive Property Management: Implementing rigorous tenant screening processes and maintaining properties to a high standard can help minimize tenant defaults and property damage.
• Conservative Financial Management: Maintaining a strong balance sheet with moderate leverage can provide flexibility to navigate economic uncertainties and capitalize on investment opportunities.
• Market Research: Conducting thorough market research and analysis can help inform investment decisions and identify emerging trends.

Here's a look at potential mitigation strategies:

Mitigation Strategies or Plans:

Terreno Realty Corporation focuses on:

• Tenant Creditworthiness: Thoroughly assessing tenant financials to minimize default risk.
• Geographic Diversification: Spreading investments across diverse markets to reduce regional economic impacts.
• Lease Terms: Structuring leases to mitigate vacancy risks and ensure stable cash flow.

For further insights into Terreno Realty Corporation's mission, vision, and core values, refer to Mission Statement, Vision, & Core Values of Terreno Realty Corporation (TRNO).

Terreno Realty Corporation (TRNO) Growth Opportunities

Terreno Realty Corporation is strategically positioned to capitalize on several growth drivers, including its focus on infill locations, acquisitions, and value-add services. These elements collectively contribute to the company's potential for future revenue and earnings expansion.

Key growth drivers for Terreno Realty Corporation (TRNO) include:

• Infill Locations: Terreno focuses on acquiring, owning, and operating industrial properties in major coastal U.S. markets. These infill locations are characterized by high demand and limited supply, which supports rental growth and property values.
• Strategic Acquisitions: Terreno has a track record of making strategic acquisitions that enhance its portfolio. By acquiring properties in key locations, Terreno can expand its presence and capitalize on market opportunities.
• Value-Add Services: Terreno provides value-add services to its tenants, such as property management and development expertise. These services can increase tenant satisfaction and retention, leading to stable and growing rental income.

Analyzing Terreno Realty Corporation's competitive advantages reveals factors that support sustained growth:

• Focus on high-barrier-to-entry markets: By concentrating on infill locations in major coastal markets, Terreno benefits from limited supply and high demand, creating a competitive edge.
• Experienced management team: Terreno's management team has a proven track record of success in the industrial real estate sector, providing the company with valuable expertise and leadership.
• Strong balance sheet: Terreno maintains a strong balance sheet, which provides financial flexibility to pursue acquisitions and development opportunities.

Terreno Realty Corporation's (TRNO) financial performance and projections offer insights into its growth trajectory. As of the fiscal year 2024, Terreno Realty reported:

• Total Revenue: $334.7 million for the year 2024, reflecting a 14.9% increase compared to $291.3 million in 2023.
• Net Income: Net income available to common stockholders was $74.8 million, or $0.90 per diluted share for the year 2024.
• FFO per Share: Core Funds From Operations (FFO) per share, a key metric for REITs, reached $2.25 per diluted share for the year 2024.
• Acquisitions: During 2024, Terreno Realty Corporation invested $449.2 million in 33 acquisitions.

Strategic initiatives and partnerships further enhance Terreno Realty Corporation's growth prospects. These include:

• Sustainability Initiatives: Focus on sustainable building practices and energy-efficient technologies, attracting environmentally conscious tenants and improving operational efficiency.
• Technology Adoption: Implementing advanced property management and data analytics tools to optimize operations and enhance decision-making.

For more detailed insights into Terreno Realty Corporation's financial health, you can refer to: Breaking Down Terreno Realty Corporation (TRNO) Financial Health: Key Insights for Investors