What is NexPoint Residential Trust Financial Strength?
NexPoint Residential Trust has the Financial Strength Rank of 3. It displays poor financial strength and is likely in financial distress. Usually this is caused by too much debt for the company.
Warning Sign:
NexPoint Residential Trust Inc displays poor financial strength. Usually, this is caused by too much debt for the company.
GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors:
1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.
NexPoint Residential Trust's Interest Coverage for the quarter that ended in Mar. 2024 was 0.34.
NexPoint Residential Trust's debt to revenue ratio for the quarter that ended in Mar. 2024 was 5.38.
As of today, NexPoint Residential Trust's Altman Z-Score is 0.85.
Competitive Comparison of NexPoint Residential Trust's Financial Strength
For the REIT - Residential subindustry, NexPoint Residential Trust's Financial Strength, along with its competitors' market caps and Financial Strength data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
NexPoint Residential Trust's Financial Strength Distribution in the REITs Industry
For the REITs industry and Real Estate sector, NexPoint Residential Trust's Financial Strength distribution charts can be found below:
* The bar in red indicates where NexPoint Residential Trust's Financial Strength falls into.
Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:
The higher the ratio, the stronger the company's financial strength is.
Warning Sign:
Ben Graham prefers companies' interest coverage to be at least 5. NexPoint Residential Trust Incs earnings cannot cover its interest expense. If the situation continues, the company may have to issue more debt.
Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.
The zones of discrimination were as such:
When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.
NexPoint Residential Trust has a Z-score of 0.85, indicating it is in Distress Zones. This implies bankrupcy possibility in the next two years.
Warning Sign:
Altman Z-score of 0.85 is in distress zone. This implies bankruptcy possibility in the next two years.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
The maximum rank is 10. Companies with rank 7 or higher will be unlikely to fall into distressed situations. Companies with rank of 3 or less are likely in financial distress.
NexPoint Residential Trust has the Financial Strength Rank of 3. It displays poor financial strength and is likely in financial distress. Usually this is caused by too much debt for the company.
NexPoint Residential Trust Financial Strength Related Terms
Thank you for viewing the detailed overview of NexPoint Residential Trust's Financial Strength provided by GuruFocus.com. Please click on the following links to see related term pages.
NexPoint Residential Trust (NexPoint Residential Trust) Business Description
NexPoint Residential Trust Inc is an us-based real estate investment trust company. Its company's investment objectives are to maximize the cash flow and value of properties owned, acquire properties with cash flow growth potential, provide quarterly cash distributions, and achieve long-term capital appreciation for stockholders. The company seeks to achieve these objectives through targeted management and a capex value-add program. It focuses on acquiring multifamily properties in markets with attractive job growth and household formation fundamentals primarily in the Southeastern and Southwestern United States. The company generates revenue from the rental of multifamily properties.
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