CubeSmart Q1 profit falls as expenses rise

Overview

• U.S. self-storage REIT's Q1 revenue rose slightly, while EPS and adjusted FFO per share declined

• Same-store NOI fell 1.5% as operating expenses outpaced revenue growth

• Company repurchased 0.9 mln shares for $33.4 mln during the quarter

Outlook

• CubeSmart sees 2026 diluted EPS at $1.55 to $1.63

• Company expects 2026 FFO, as adjusted, per diluted share of $2.52 to $2.60

• CubeSmart expects Q2 diluted EPS of $0.38 to $0.40

Result Drivers

• ACQUISITIONS AND NEW DEVELOPMENTS - Revenue growth was mainly driven by contributions from property acquisitions and recently opened development properties

• OPERATING EXPENSES - Higher same-store operating expenses, especially for advertising and personnel, weighed on profitability

• INTEREST EXPENSE - Increased interest expense due to higher average outstanding debt balance and higher interest rates

Company press release: ID:nGNX453JN2

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 6 "strong buy" or "buy", 12 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the specialized reits peer group is "buy."

• Wall Street's median 12-month price target for CubeSmart is $42.00, about 5.8% above its April 29 closing price of $39.71

• The stock recently traded at 25 times the next 12-month earnings vs. a P/E of 25 three months ago

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