Stock of the Day

December 17, 2020

Alexandria Real Estate Equities (ARE)

$81.32
-$4.93 (-5.7%)
Market Cap: $14.08B

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.:

  • Recent investment by Norges Bank, acquiring a stake valued at approximately $1.61 billion, indicates strong institutional confidence in the company.
  • Current stock price is $95.58, which is relatively stable compared to its 52-week high of $130.14, suggesting potential for recovery and growth.
  • Alexandria Real Estate Equities, Inc. reported an impressive EPS of $2.39, significantly surpassing the consensus estimate of $0.91, showcasing strong financial performance.
  • The company has a market capitalization of $16.54 billion, indicating it is a well-established player in the real estate investment trust sector.
  • 96.54% of the stock is owned by institutional investors, which often reflects a strong endorsement of the company's stability and growth potential.

Alexandria Real Estate Equities Bear Case

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

  • The stock has a high P/E ratio of 53.10, which may indicate that it is overvalued compared to its earnings, potentially leading to a price correction.
  • With a quick ratio and current ratio both at 0.21, the company may face liquidity issues, suggesting it might struggle to meet short-term obligations.
  • The stock has experienced a decline of 0.1% recently, which could signal a lack of momentum in the market.
  • Despite strong earnings, the return on equity is only 1.43%, indicating that the company may not be effectively utilizing its equity to generate profits.
  • The debt-to-equity ratio of 0.55 suggests that the company is using a moderate amount of debt, which could pose risks if market conditions change.

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