Should Extra Space Storage Stock Be in Your Portfolio Pre-Q4 Earnings?

Extra Space Storage EXR, a leading self-storage real estate investment trust (REIT) in the United States, is set to release its fourth-quarter 2025 results on Feb. 19, after market close. The company’s quarterly results are likely to display a year-over-year rise in revenues, with no change in funds from operations (FFO) per share.

In the last reported quarter, this Salt Lake City, UT-based REIT reported FFO per share of $2.08, surpassing the Zacks Consensus Estimate of $2.06. Results reflected a year-over-year increase in revenues due to growth in occupancy. High same-store expenses and interest expenses during the quarter were a spoilsport.

Over the trailing four quarters, the company beat the Zacks Consensus Estimate on three occasions and missed in the remainder, with the average surprise being 0.76%. The graph below depicts this surprise history:

Extra Space Storage Inc Price and EPS Surprise

Extra Space Storage Inc price-eps-surprise | Extra Space Storage Inc Quote

Factors to Consider and Projections for EXR

In the fourth quarter, Extra Space Storage is likely to have gained from its high brand value, geographically diversified portfolio and presence in key cities in the United States. The self-storage asset category is need-based and recession-resilient in nature. The self-storage industry continues to benefit from favorable demographic changes. All these factors cumulatively are likely to have contributed to the company’s top-line growth.

The Zacks Consensus Estimate of $731.87 million for quarterly property rental revenues suggests an increase from the year-ago period’s $707.23 million. The consensus estimate for revenues from tenant insurance is pegged at $88.44 million, which jumped from $83.70 million reported in the year-ago period. The consensus mark for management fees and other income for the quarter stands at $32.09 million, up from $30.97 million in the year-ago period.

The Zacks Consensus Estimate of $864.48 million for quarterly revenues suggests a 5.18% increase year over year.

EXR operates in a highly fragmented market in the United States, with intense competition from numerous operators. The company continues to see new customer price sensitivity and is likely to face headwinds from lower new customer rates impacting its fourth-quarter earnings.

Extra Space Storage’s activities during the quarter were inadequate to gain analysts’ confidence. The Zacks Consensus Estimate for the quarterly core FFO per share has moved southward to $2.03 over the past month. It indicates no change compared to the year-ago reported figure.

What Our Quantitative Model Predicts for EXR

Our proven model does not conclusively predict a surprise in terms of core FFO per share for Extra Space Storage this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.

Extra Space Storage currently has an Earnings ESP of -1.61% and carries a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks That Warrant a Look

Here are two stocks from the broader REIT sector — Host Hotels & Resorts HST and Realty Income O— that you may want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter.

Host Hotels, scheduled to report quarterly numbers on Feb. 18, has an Earnings ESP of +1.90% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Realty Income, slated to release quarterly numbers on Feb. 24, has an Earnings ESP of +0.99% and carries a Zacks Rank of 3 at present.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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