Q3 2023 Earnings Summary
Reported on Nov 13, 2023
Pre-Earnings Price$31.42Open (Nov 13, 2023)
Post-Earnings Price$33.44Last close (Nov 14, 2023)
Price Change
$2.02(+6.43%)
- INVH is effectively recycling capital by selling older homes at low cap rates (~4%) and acquiring newer, higher-quality homes at higher cap rates (~6%), enhancing portfolio quality and generating accretive returns. ,
- INVH maintains a strong balance sheet with $1.8 billion in available liquidity, positioning the company for opportunistic growth, including potential M&A and partnerships with homebuilders. ,
- INVH has established partnerships with major homebuilders, with a pipeline of over $1 billion, allowing them to bring new supply to the market at meaningful discounts, supporting future growth and enhancing operating margins. ,
- Elevated bad debt and higher turnover costs due to lease compliance issues are impacting expenses, delaying a return to normal operating levels. Bad debt remains at 133 basis points, higher than the pre-pandemic level of ~50 basis points, and skip/evict turnovers are costing 50% more than regular turns.
- Deceleration in occupancy and lease rent growth, partially due to higher turnover from lease compliance backlog and normal seasonality, may impact revenue growth. Occupancy in Q3 2023 was 96.9%, with higher turnover expected to continue into next year, potentially affecting occupancy and lease rate growth.
- Higher-than-expected property tax expenses, particularly in Florida and Georgia, are increasing operating expenses and reducing NOI growth. Same-store property tax expense growth is now expected to be approximately 10% to 10.5% for full year 2023, higher than initially anticipated due to property tax millage rates not declining as expected.
Research analysts covering Invitation Homes.