NXRT

Read NXRT as the income REIT it is, not through its GAAP net loss. The -$32.0M FY2025 net income and -$1.26 EPS look alarming, but for a multifamily REIT they are largely an artifact of $95.8M of non-cash depreciation and amortization. The cash story is far healthier: operating cash flow rose 13.6% to $83.6M and comfortably covered the $53.5M of dividends paid (~$2.11/share, roughly a 7.4% yield on the $28.31 price). Adding D&A back to the net loss implies funds-from-operations near $64M, putting the $719M market cap at a reasonable ~11x P/FFO — fair for a 36-property, 13,305-unit Sunbelt portfolio that was 92.7% leased at a $1,492 weighted-average rent. This is the profile of a covered, high-yield income holding, not a broken business.

The reasons it is a hold rather than a buy are real, though. Top-line momentum has reversed: revenue slid from $278M (FY2023) to $260M (FY2024) to $251M (FY2025, -3.2%), and operating income fell two-thirds to $27.9M. Management's own MD&A flags the cause — a 'high interest rate environment' and 'less available and more expensive debt capital' that make accretive value-add acquisitions hard to finance, the engine this strategy depends on. The balance sheet shows the strain: stockholders' equity fell 28% to $295M, retained earnings are -$123M, leverage sits at 5.37x liabilities/equity on $1.59B of debt, and cash is a thin $13.7M (down 40.8%). The leverage is normal for a REIT, but the eroding equity and minimal liquidity leave little cushion if rates stay high or occupancy/rents soften.