Valued at a market cap of almost $20.3 billion, Invitation Homes Inc. (INVH) is a premier real estate company that focuses on owning, renovating, leasing, and operating single-family residential properties primarily in the United States. Based in Dallas, Texas, the company provides access to high-quality, updated homes with valued features such as close proximity to jobs and access to good schools.
Companies valued at over $10 billion are typically classified as “large-cap stocks,” and Invitation Homes fits the label perfectly. The company distinguishes itself as one of the nation's largest single-family home leasing and management companies and is renowned for its smart home technology, an industry-leading maintenance app, and other forward-thinking programs.
Despite its strengths, the real estate giant has declined 12.5% from its 52-week high of $37.80, achieved on Sep. 4. Moreover, shares of INVH have decreased 10.7% over the past three months, underperforming the broader Real Estate Select Sector SPDR Fund’s (XLRE) 5.3% drop over the same time frame.
Moreover, in the longer term, INVH has fallen 5.1% over the past 52 weeks, significantly lagging behind XLRE’s 8.7% returns. On a YTD basis, INVH’s shares have declined nearly 3.1%, underperforming XLRE’’s 6.9% gains over the same time frame.
To confirm its bearish trend, INVH has been trading below its 200-day moving average since early October and has remained below its 50-day moving average since early December.
Shares of INVH fell 5.5% after its Q3 earnings release on Oct. 30. The company’s revenue increased 6.9% year-over-year to $660 million, while its core FFO per share increased 6.8% annually to $0.47. However, a 27.8% decline in net income available to common stockholders to $95 million and moderation in same-store revenue growth due to supply and absorption pressures in key markets like Phoenix, Tampa, Orlando, and Dallas might have lowered investor confidence and led to its downward price movement.
INVH’s underperformance becomes more evident when compared to its rival, Equity Residential (EQR), which gained 20.2% over the past 52 weeks and 19.8% on a YTD basis.
Despite INVH’s recent underperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 21 analysts covering it, and the mean price target of $37.46 suggests a 13.3% premium to its current levels.
