Overall Score

Business Quality

NXRT continues to show strong gross profitability, with gross margin at 90.8% and EBITDA margin at 145.1%, indicating a high-margin rental model.

Operating profitability remains positive, with operating margin at 11.1% and operating cash flow margin at 32.6%.

However, net income remains negative at -13.1% and return on equity is -11.8%, showing that bottom-line profitability is still weak.

Asset efficiency is modest, with asset turnover at 0.14 and return on invested capital at 1.5%.

Financial Health

Leverage remains elevated, with debt-to-equity at 6.41x and net debt to EBITDA at 4.26x.

Liquidity is weak, as the current ratio is 0.49 and cash ratio is 0.13.

Interest coverage is still very thin at 0.09x, leaving limited cushion if operating conditions soften.

Free cash flow generation is positive, with free cash flow of $185.3M and free cash flow yield of 10.5%.

Growth Runway

The company’s revenue base remains supported by a sizable asset portfolio, with revenue per share at 10.02 and enterprise value to sales at 8.66x.

Cash conversion is strong, with a cash conversion cycle of -192.0 days and operating cash flow covering capex by nearly 5.0x.

Growth visibility is constrained by the lack of explicit forward growth metrics in the current data set.

High leverage and weak liquidity limit flexibility to fund aggressive expansion.

Valuation

NXRT trades at 2.49x sales and 5.97x EV/EBITDA, which is not demanding on an earnings basis.

Free cash flow valuation is reasonable at 9.53x price to free cash flow, supported by positive cash generation.

The stock still screens as expensive on book value at 2.56x price-to-book given modest tangible asset productivity.

Negative earnings make P/E-based valuation less informative, despite the reported negative multiple.

Risk Profile

The main risks remain leverage and refinancing sensitivity, with debt-to-assets at 84.6% and debt-to-capital at 86.5%.

Interest burden is weak, and interest coverage of 0.09x suggests earnings are not comfortably covering financing costs.

Liquidity risk persists because working capital is negative at -$57.7M and the current ratio remains below 1.0.

Dividend support exists from cash flow, but the payout profile should be monitored given the balance-sheet strain.