Stock of the Day

December 17, 2020

Alexandria Real Estate Equities (ARE)

$75.86
-$1.40 (-1.8%)
Market Cap: $13.12B

About Alexandria Real Estate Equities

Alexandria Real Estate Equities, Inc. (NYSE: ARE), an S&P 500 company, is a best-in-class, mission-driven life science REIT making a positive and lasting impact on the world. As the pioneer of the life science real estate niche since our founding in 1994, Alexandria is the preeminent and longest-tenured owner, operator, and developer of collaborative life science, agtech, and advanced technology mega campuses in AAA innovation cluster locations, including Greater Boston, the San Francisco Bay Area, New York City, San Diego, Seattle, Maryland, and Research Triangle. Alexandria has a total market capitalization of $33.1 billion and an asset base in North America of 73.5 million SF as of December 31, 2023, which includes 42.0 million RSF of operating properties, 5.5 million RSF of Class A/A+ properties undergoing construction and one near-term project expected to commence construction in the next two years, 2.1 million RSF of priority anticipated development and redevelopment projects, and 23.9 million SF of future development projects. Alexandria has a longstanding and proven track record of developing Class A/A+ properties clustered in life science, agtech, and advanced technology mega campuses that provide our innovative tenants with highly dynamic and collaborative environments that enhance their ability to successfully recruit and retain world-class talent and inspire productivity, efficiency, creativity, and success. Alexandria also provides strategic capital to transformative life science, agrifoodtech, climate innovation, and technology companies through our venture capital platform. We believe our unique business model and diligent underwriting ensure a high-quality and diverse tenant base that results in higher occupancy levels, longer lease terms, higher rental income, higher returns, and greater long-term asset value.

Alexandria Real Estate Equities Bull Case

Here are some ways that investors could benefit from investing in Alexandria Real Estate Equities, Inc.:

  • The current stock price is around $77.98, which reflects a recent increase, indicating positive market sentiment.
  • Alexandria Real Estate Equities, Inc. reported a significant earnings per share (EPS) of $2.39, surpassing analysts' expectations by a substantial margin, showcasing strong financial performance.
  • Institutional investors hold a significant majority of the company's stock, with 96.54% ownership, suggesting confidence in the company's stability and growth potential.
  • The company has a market capitalization of approximately $13.49 billion, indicating it is a well-established player in the real estate investment trust sector.
  • Recent increases in holdings by institutional investors, such as Capital Fund Management S.A. increasing its stake by 152.9%, reflect growing confidence in the company's future prospects.

Alexandria Real Estate Equities Bear Case

Investors should be bearish about investing in Alexandria Real Estate Equities, Inc. for these reasons:

  • The stock has experienced significant volatility, with a one-year high of $130.14 and a low of $71.57, indicating potential risks associated with price fluctuations.
  • The company has a relatively high price-to-earnings (P/E) ratio of around 43.33, which may suggest that the stock is overvalued compared to its earnings.
  • With a quick ratio and current ratio both at 0.21, the company may face liquidity challenges, indicating potential difficulties in meeting short-term obligations.
  • Despite recent positive earnings, the return on equity is only 1.43%, which may raise concerns about the efficiency of generating profits from shareholders' equity.
  • The company has a beta of 1.24, suggesting that its stock price is more volatile than the market, which could pose risks for conservative investors.

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