Company Overview
Agree Realty Corporation operates as a publicly traded real estate investment trust that is rethinking the retail landscape through the strategic acquisition and development of properties net leased to industry-leading, omni-channel retail tenants. The firm functions within the Real Estate sector and specifically within the REIT - Retail industry, a classification that signifies its obligation to distribute a significant portion of its income to shareholders while managing a portfolio of commercial assets. As of the latest data available, the company maintains a market capitalization of $8.96B and employs 90 individuals to manage its operations. This market capitalization, combined with a trailing twelve-month revenue of $718.40M, indicates that the company holds a substantial position in the commercial real estate market, serving as a vehicle for exposure to the retail real estate sector without requiring direct tenant leasing expertise. The scale of the portfolio, which as of December 31, 2025, included 2,674 properties, underscores the breadth of its asset base and its capacity to generate consistent cash flows from a diversified collection of retail locations.
Financial Health
The company reported a revenue of $718.40M for the trailing twelve months, generating a net income of $196.46M and an EBITDA of $619.75M during the same period. The substantial gap between the $718.40M revenue and the $196.46M net income reveals a cost structure where operating expenses, including property management costs and general administrative overhead, consume a significant portion of gross revenue before arriving at the bottom line. Despite the net income figure, the EBITDA stands at $619.75M, highlighting a pre-interest and pre-tax cash generation capability that is notably higher than reported earnings, suggesting the company benefits from tax shields or interest deductions that impact the final profit figure. The business model supports a free cash flow of $433.69M, which provides the financial flexibility necessary for potential property acquisitions, debt repayment, or shareholder distributions without relying on external financing. Margin analysis shows a gross margin of 87.7%, reflecting the low cost of goods sold typical of the net lease model where the operator does not purchase inventory. The operating margin is 48.3%, indicating efficient management of overhead relative to revenue, while the profit margin sits at 28.4%, demonstrating the final percentage of revenue retained as net income. The company holds $22.27M in cash against a total debt load of $3.32B, resulting in a debt-to-equity ratio of 52.95%, which indicates a highly leveraged balance sheet common in the REIT structure but one that requires careful interest rate management. The current ratio is 0.34, a figure that indicates the company's current assets are less than its current liabilities, a characteristic often seen in asset-heavy REITs where long-term debt finances short-term operational cycles. Return on Equity is 3.5% and Return on Assets is 2.4%, metrics that reveal the specific efficiency of management in generating returns on the capital invested by shareholders and the total asset base, respectively.
Valuation Assessment
Agree Realty Corporation trades with a trailing P/E ratio of 42.04 and a forward P/E of 36.43, implying that the market expects earnings growth to be realized in the future as the forward multiple is lower than the trailing multiple. The price-to-book ratio is 1.46, indicating that the market values the company at a premium of roughly 46% over its net asset book value, which can reflect the value of the underlying real estate portfolio and growth prospects not fully captured on the balance sheet. Alternative valuation metrics such as the price-to-sales ratio of 12.47 and an EV/EBITDA of 19.99 suggest that investors are pricing in a specific growth trajectory relative to revenue generation and cash flow creation. The stock has traded between a 52-week low of $68.98 and a 52-week high of $82.08, placing the current trading price within a defined historical range that reflects recent market sentiment and volatility. With a beta of 0.51, the stock exhibits lower volatility relative to the broader market, suggesting it may move less sharply than the overall market index during periods of high volatility.
Growth & Income
The company demonstrated a revenue growth of 18.5% year-over-year and an earnings growth of 14.0% year-over-year, indicating that earnings are growing at a slightly slower pace than revenue, which can imply that margin expansion is not the primary driver of recent value creation. For dividend payers, the company offers a dividend yield of 4.2% with a payout ratio of 174.1%, a figure that suggests the dividend is being paid from sources other than the current year's net income, potentially utilizing retained earnings from previous periods or other cash flow sources. The high payout ratio relative to the reported net income of $196.46M indicates that the dividend sustainability depends heavily on the stability of the underlying cash flows rather than the GAAP profit figure. Overall, the growth and income profile presents a scenario of double-digit revenue expansion supported by a high dividend yield, though the payout ratio warrants close monitoring against future earnings performance to ensure long-term sustainability.