With a market cap of $17.9 billion, Mid-America Apartment Communities, Inc. (MAA) is a leading real estate investment trust (REIT) focused on multifamily housing in the Southeast, Southwest, and Mid-Atlantic regions. With a strategic focus on high-growth, large, and secondary markets, it aims to deliver superior risk-adjusted returns through full market cycles.
Companies valued at $10 billion or more are generally classified as “large-cap” stocks, and Mid-America Apartment Communities fits this criterion perfectly. It leverages disciplined capital deployment, a strong balance sheet, and a technologically advanced operating platform to enhance shareholder value. As of June 30, 2024, MAA owned interests in 103,614 apartment units across 16 states and the District of Columbia, underscoring its significant presence in the multifamily housing sector.
However, the Germantown, Tennessee-based company has fallen 8.4% from its 52-week high of $167.39, recorded on Sept. 16. Mid-America Apartment shares have declined 6.3% over the past three months, underperforming the broader Nasdaq Composite's ($NASX) nearly 10% gain during the same period.
In the long term, MAA stock has gained 8.8% over the past six months, lagging behind NASX's 11.7% increase over the same period. Also, MAA has risen 15.2% over the past 52 weeks, compared to NASX's 31.8% gains.
Yet, MAA has consistently traded above its 200-day moving average since May. The stock has also stayed above its 50-day moving average despite recent fluctuations.
Mid-America Apartment Communities reported Q3 2024 earnings results on Oct. 30 exceeding analysts' expectations, with core FFO per share of $2.21 and revenue of $551.1 million. Investors were further encouraged by management's optimistic outlook, highlighting that new supply levels have likely peaked and demand is expected to outpace supply starting in 2025. Additionally, steady average physical occupancy of 95.7% and historically low resident turnover underscored the company's resilience despite rising operating expenses. However, the stock fell marginally the next day due to a 3.5% year-over-year decline in core FFO per share, higher operating expenses, and a slight decrease in same-store NOI.
In contrast, rival Equity Residential (EQR) slightly outperforms MAA. Equity Residential shares have risen 16.9% over the past 52 weeks.
Despite MAA's underperformance, analysts remain moderately optimistic about its prospects. Among the 26 analysts covering the stock, there is a consensus rating of “Moderate Buy,” and it is currently trading below the mean price target of $164.46.
