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NETSTREIT Corp. (NYSE:NTST), a real estate investment trust, announced today the initiation of a new at-the-market equity offering program. Under the agreement with several financial institutions, the company may sell up to $300 million of its common stock.
The Dallas-based company entered into the equity offering sales agreement on Monday, with the operating partnership NETSTREIT, L.P., and various agents including Wells Fargo Securities, LLC and BofA Securities, Inc. This move allows for the sale of common stock through "at-the-market" offerings, which may occur on the New York Stock Exchange or other marketplaces.
The agents involved are entitled to a commission not exceeding 1.5% of the gross sales price for shares sold. The company has the option to engage in forward sale agreements with entities such as Goldman Sachs and Jefferies LLC, where shares will be sold by borrowing from third parties.
NETSTREIT plans to use the net proceeds from this offering for general corporate purposes, potentially including property acquisitions and development activities. The company has stated that it will not initially receive proceeds from the sale of borrowed shares by forward sellers but expects to receive net cash proceeds upon settlement of the forward sale agreements unless they elect to settle in cash or shares.
The new program replaces a previous sales agreement dated October 25, 2023, which has been terminated in conjunction with this announcement. Under the prior agreement, NETSTREIT sold approximately $108.1 million in common stock and has one unsettled forward agreement for 1,743,100 shares, which may be physically settled by April 12, 2025.
In other recent news, NETSTREIT Corp. has reported a steady second quarter in 2024, maintaining its focus on strategic growth and portfolio diversification. Despite reporting a net loss of $2.3 million, the real estate investment trust declared a quarterly cash dividend of $0.21 per share, signaling continued resilience. The company reported over $116 million in gross investment activity, with a 7.5% blended cash yield, and added Life Time Fitness as a new tenant, indicating a commitment to diversification.
In recent developments, NETSTREIT commenced rent on six development projects and maintained its 2024 AFFO per share guidance of $1.25 to $1.28. The company's portfolio now comprises 649 investments, leased to 90 tenants across 45 states. In addition, the firm has a strong dialogue with Walgreens, suggesting minimal impact from Big Lots (NYSE:BIG) store closures.
NETSTREIT's new CEO is expected to focus on optimizing a larger portion of the source, and the company plans to extend debt maturities in the coming years. The company's approach to re-tenanting, acquisition pace, and balance sheet management was also highlighted, suggesting a steady path forward despite recent challenges.
InvestingPro Insights
As NETSTREIT Corp. (NYSE:NTST) embarks on its new at-the-market equity offering program, InvestingPro data and tips provide valuable insights for investors considering the company's stock. The company's market capitalization stands at approximately $1.21 billion, with a notable price-to-earnings (P/E) ratio of 224.93. However, when adjusted for the last twelve months as of Q2 2024, the P/E ratio is more favorable at 83.71. Additionally, NETSTREIT has demonstrated robust revenue growth of 30.09% over the same period, signaling potential for future expansion.
InvestingPro Tips suggest that analysts expect NETSTREIT's net income and sales to grow this year, which aligns with the company's strategy to use the proceeds from the equity offering for property acquisitions and development. Furthermore, the company's liquid assets surpassing short-term obligations and a strong gross profit margin of 88.11% as of Q2 2024 underscore its financial health. Currently, there are 8 additional InvestingPro Tips available for NETSTREIT, which can be accessed for more detailed investment analysis.
With a dividend yield of 5.46% and a history of dividend growth, NETSTREIT may also appeal to income-focused investors. While the recent price total return metrics indicate a downward trend, the stock's oversold status according to the RSI may suggest a potential entry point for value investors. The anticipated profitability for the year and the fair value estimates ranging from $15.6 to $19 provide a perspective on the stock's valuation. For investors seeking a comprehensive view, these InvestingPro Tips and data metrics offer a deeper understanding of NETSTREIT's financial position and market potential.
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