Global Self Storage, Inc. (SELF) Bundle
Understanding Global Self Storage, Inc. (SELF) Revenue Streams
Understanding Global Self Storage, Inc.’s Revenue Streams
Global Self Storage, Inc. generates revenue primarily through rental income, other property-related income, and management fees. Here’s a detailed breakdown:
Breakdown of Primary Revenue Sources
- Rental Income: This is the largest revenue stream, accounting for the bulk of total revenues.
- Other Property Related Income: This includes customer insurance fees and sales of storage supplies.
- Management Fees: Income from third-party management services.
Year-over-Year Revenue Growth Rate
The total revenues for the nine months ended September 30, 2024, increased to $9,343,354 from $9,214,345 for the same period in 2023, showing a growth rate of 1.4%.
For the three months ended September 30, 2024, total revenues rose to $3,200,276 from $3,090,374 in 2023, resulting in a growth rate of 3.6%.
Contribution of Different Business Segments to Overall Revenue
| Revenue Source | 9 Months Ended September 30, 2024 | 9 Months Ended September 30, 2023 | 3 Months Ended September 30, 2024 | 3 Months Ended September 30, 2023 |
|---|---|---|---|---|
| Rental Income | $8,967,371 | $8,857,845 | $3,070,871 | $2,968,263 |
| Other Property Related Income | $323,957 | $293,788 | $111,618 | $103,676 |
| Management Fees | $52,026 | $62,712 | $17,787 | $18,435 |
| Total Revenue | $9,343,354 | $9,214,345 | $3,200,276 | $3,090,374 |
Analysis of Significant Changes in Revenue Streams
From the nine months ended September 30, 2023, rental income increased by 1.2%, while other property-related income saw a significant increase of 10.3%. However, management fees decreased by 17.1%, indicating a shift in revenue dynamics.
For the three-month comparison, rental income grew by 3.5%, and other property-related income increased by 7.7%, while management fees slightly decreased by 3.5%.
The overall trend indicates a stable growth in rental and ancillary income, while management fees are adjusting to current market conditions. This reflects the company’s strategic focus on maximizing occupancy and optimizing pricing strategies through their revenue rate management program.
A Deep Dive into Global Self Storage, Inc. (SELF) Profitability
Profitability Metrics
Gross Profit Margin: For the three months ended September 30, 2024, the gross profit margin was approximately 62.1%, compared to 59.8% for the same period in 2023. This reflects a year-over-year increase driven by improved rental income and cost management.
Operating Profit Margin: The operating profit margin for the three months ended September 30, 2024, was 27.3%, up from 26.8% in the same period of 2023. This increase can be attributed to effective cost control measures and higher revenues.
Net Profit Margin: Net profit margin improved significantly from 8.8% in the three months ended September 30, 2023, to 36.9% in the same period of 2024. This was primarily due to a substantial increase in net income.
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Gross Profit Margin | 62.1% | 59.8% | +2.3% |
| Operating Profit Margin | 27.3% | 26.8% | +0.5% |
| Net Profit Margin | 36.9% | 8.8% | +28.1% |
Trends in Profitability Over Time: Over the past year, profitability has shown a positive trend, with gross profit increasing from $1,844,062 in Q3 2023 to $1,987,185 in Q3 2024. Operating income also rose from $828,533 to $873,090 in the same timeframe, reflecting a growth of 5.4%.
Comparison of Profitability Ratios with Industry Averages: The average gross profit margin in the self-storage industry is approximately 55%, indicating that the company's performance is significantly above the industry benchmark. The operating and net profit margins also exceed typical industry averages, which hover around 20% and 15% respectively.
Analysis of Operational Efficiency: Total operating expenses increased from $2,261,841 in Q3 2023 to $2,327,186 in Q3 2024, a rise of 2.9%. However, same-store cost of operations demonstrated a slight decrease of 0.8% in Q3 2024 compared to Q3 2023, indicating improved operational efficiency.
| Operational Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Total Operating Expenses | $2,327,186 | $2,261,841 | +2.9% |
| Same-Store Cost of Operations | $1,153,947 | $1,163,064 | -0.8% |
Net Operating Income (NOI): For the three months ended September 30, 2024, net operating income was $2,028,542, compared to $1,908,875 in Q3 2023, representing a growth of 6.3%.
Funds from Operations (FFO): FFO for the three months ended September 30, 2024, was $1,091,601, which is consistent with the previous year's $1,091,972, indicating stability in cash-generating capabilities despite an overall decrease in FFO for the nine-month period.
Adjusted Funds from Operations (AFFO): For Q3 2024, AFFO was reported at $1,167,820, compared to $1,142,595 in Q3 2023, reflecting a slight increase of 2.2%.
Debt vs. Equity: How Global Self Storage, Inc. (SELF) Finances Its Growth
Debt vs. Equity: How Global Self Storage, Inc. Finances Its Growth
Debt Levels
As of September 30, 2024, the company reported a principal balance outstanding of $16,811,550 on its note payable, which is net of loan procurement costs of $316,408, resulting in a total note payable of $16,495,142.
The company has a revolving line of credit with a capacity of up to $15 million, which matures on July 6, 2027. The effective interest rate on this facility was approximately 8.20% as of September 30, 2024.
Debt-to-Equity Ratio
The total stockholders' equity as of September 30, 2024, was $48,061,216. To calculate the debt-to-equity ratio, the formula is:
Debt-to-Equity Ratio = Total Debt / Total Equity
Using the figures:
- Total Debt: $16,495,142
- Total Equity: $48,061,216
- Debt-to-Equity Ratio: 0.34
This ratio is favorable compared to industry standards, which typically range from 0.5 to 1.0 for similar companies in the self-storage sector.
Recent Debt Issuances and Credit Ratings
The company has engaged in refinancing activities, recently entering into a second amendment to its Credit Facility Loan Agreement on July 6, 2024. The terms include a decreasing principal amount over the loan's duration and an interest rate of 3% plus the greater of the SOFR or 0.25%. The company has maintained compliance with its loan covenants as of September 30, 2024.
Debt Financing vs. Equity Funding
The company has indicated a strategy to balance its financing methods, opting for debt when favorable terms exist, while retaining sufficient cash resources of approximately $25.1 million. This includes cash and cash equivalents of $6.9 million and marketable securities of $3.2 million.
Future Principal Payment Requirements on Note Payable
| Year | Principal Payment |
|---|---|
| 2024 (3 months) | $147,941 |
| 2025 | $607,488 |
| 2026 | $633,449 |
| 2027 | $660,519 |
| 2028 | $688,746 |
| 2029 and thereafter | $14,073,407 |
| Total Principal Payments | $16,811,550 |
This structured approach to financing allows the company to leverage its debt while maintaining a solid equity base, ensuring continued growth and operational stability.
Assessing Global Self Storage, Inc. (SELF) Liquidity
Assessing Global Self Storage, Inc.'s Liquidity
Current Ratio: As of September 30, 2024, the current assets totaled $7,028,546 while current liabilities stood at $2,138,000, resulting in a current ratio of 3.29.
Quick Ratio: The quick assets, excluding inventory, amounted to $6,927,134 against current liabilities of $2,138,000, yielding a quick ratio of 3.24.
Analysis of Working Capital Trends
As of September 30, 2024, working capital was calculated as current assets of $7,028,546 minus current liabilities of $2,138,000, resulting in a working capital of $4,890,546. This indicates a strong liquidity position compared to the previous year when working capital was $4,500,000.
| Period | Current Assets | Current Liabilities | Working Capital |
|---|---|---|---|
| September 30, 2023 | $6,905,475 | $2,405,475 | $4,500,000 |
| September 30, 2024 | $7,028,546 | $2,138,000 | $4,890,546 |
Cash Flow Statements Overview
Net Cash Provided by Operating Activities: For the nine months ended September 30, 2024, net cash provided by operating activities was $3,068,193, compared to $3,409,542 for the same period in 2023.
Cash Flows from Investing Activities: Cash used in investing activities for the nine months ended September 30, 2024, was ($62,440), a decrease from ($196,689) in 2023.
Cash Flows from Financing Activities: Cash used in financing activities was ($3,107,165) in 2024, compared to ($2,822,385) in 2023.
| Cash Flow Type | 2024 | 2023 |
|---|---|---|
| Operating Activities | $3,068,193 | $3,409,542 |
| Investing Activities | ($62,440) | ($196,689) |
| Financing Activities | ($3,107,165) | ($2,822,385) |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, the company maintained cash, cash equivalents, and restricted cash of $6,927,134 along with marketable securities of $3,200,000, indicating a total capital resource of $25.1 million. This positions the company favorably against its liabilities.
Debt Obligations: The principal balance outstanding on the note payable was $16,811,550 as of September 30, 2024, with total note payable net at $16,495,142.
| Debt Obligation | Amount |
|---|---|
| Principal Balance Outstanding | $16,811,550 |
| Total Note Payable, Net | $16,495,142 |
The company is in compliance with its debt covenants as of September 30, 2024, reflecting a solid liquidity position to meet both current and future obligations.
Is Global Self Storage, Inc. (SELF) Overvalued or Undervalued?
Valuation Analysis
To determine whether Global Self Storage, Inc. is overvalued or undervalued, several financial metrics are essential. These include the price-to-earnings (P/E) ratio, price-to-book (P/B) ratio, and enterprise value-to-EBITDA (EV/EBITDA) ratio.
Price-to-Earnings (P/E) Ratio
The P/E ratio provides insight into how much investors are willing to pay for each dollar of earnings. As of September 30, 2024, the company reported a net income of $2,039,337, translating to an earnings per share (EPS) of $0.18 for the nine months ended September 30, 2024.
With a closing stock price of $5.21 on September 30, 2024, the P/E ratio is calculated as follows:
P/E Ratio = Stock Price / EPS = $5.21 / $0.18 = 28.94
Price-to-Book (P/B) Ratio
The P/B ratio compares a company's market value to its book value. As of September 30, 2024, the total stockholders' equity was $48,061,216 and there were 11,267,253 shares outstanding. Therefore, the book value per share is:
Book Value per Share = Total Stockholders' Equity / Shares Outstanding = $48,061,216 / 11,267,253 = $4.26
Given the stock price of $5.21, the P/B ratio is:
P/B Ratio = Stock Price / Book Value per Share = $5.21 / $4.26 = 1.22
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
To compute the EV/EBITDA ratio, we first need to calculate the enterprise value (EV). The EV is calculated as:
EV = Market Capitalization + Total Debt - Cash
Market Capitalization = Stock Price × Shares Outstanding = $5.21 × 11,267,253 = $58,774,103
Total Debt as of September 30, 2024, was $15,000,000. Cash and cash equivalents amounted to $6,900,000. Therefore:
EV = $58,774,103 + $15,000,000 - $6,900,000 = $66,874,103
For the nine months ended September 30, 2024, EBITDA was $3,325,000. Thus, the EV/EBITDA ratio is:
EV/EBITDA = EV / EBITDA = $66,874,103 / $3,325,000 = 20.12
Stock Price Trends
Over the past 12 months, the stock price has shown an upward trend. The closing prices were $4.86 as of September 30, 2023, compared to $5.21 on September 30, 2024, indicating a growth of 7.2%.
Dividend Yield and Payout Ratios
The company has consistently paid dividends of $0.0725 per share for both the three months ended September 30, 2024, and 2023. The dividend yield is calculated as:
Dividend Yield = Annual Dividend / Stock Price = ($0.0725 × 4) / $5.21 = 0.0555 or 5.55%
The payout ratio can be determined using the EPS:
Payout Ratio = Annual Dividend / EPS = ($0.0725 × 4) / $0.18 = 1.61 or 161%
Analyst Consensus on Stock Valuation
Analysts currently have a consensus rating of Hold for the stock, reflecting cautious optimism given the valuation metrics and the current market conditions.
| Metric | Value |
|---|---|
| P/E Ratio | 28.94 |
| P/B Ratio | 1.22 |
| EV/EBITDA Ratio | 20.12 |
| Stock Price (Sept 30, 2024) | $5.21 |
| Dividend Yield | 5.55% |
| Payout Ratio | 161% |
| Analyst Consensus | Hold |
Key Risks Facing Global Self Storage, Inc. (SELF)
Key Risks Facing Global Self Storage, Inc.
Global Self Storage, Inc. faces several internal and external risks that may impact its financial health. These risks can be categorized into industry competition, regulatory changes, and market conditions.
Industry Competition
The self-storage industry is characterized by intense competition. As of September 30, 2024, the company maintained an average same-store occupancy of approximately 91.5%, which reflects a 1.7% increase from 89.8% on the same date in 2023. However, competition from local and national operators can impact pricing strategies and occupancy rates.
Regulatory Changes
Regulatory risks include changes in zoning laws and property taxes. The company’s Dolton, IL property faced a reassessment resulting in property tax increases. In 2023, property tax expenses reached $559,000, and while some tax relief was granted in 2024, the property tax expenses are expected to remain high.
Market Conditions
Changes in market conditions, including economic downturns, can lead to fluctuations in demand for storage units. The company reported a 3.5% increase in rental income for Q3 2024, amounting to $3,070,871, but concerns over economic stress may lead to increased bad debt losses.
Operational Risks
Operational risks include increases in employment costs and general administrative expenses. For the nine months ended September 30, 2024, general and administrative expenses rose by 13.1% to $2,457,551, primarily due to increased professional fees and employment costs.
Financial Risks
Financial risks are highlighted by interest expenses, which increased from $212,712 in Q3 2023 to $259,419 in Q3 2024. The company has a $20 million Term Loan Agreement with monthly payments of $107,699 until June 2036, creating a long-term financial obligation.
Mitigation Strategies
To mitigate these risks, the company employs a revenue rate management program to optimize occupancy and rental rates. As of September 30, 2024, the total annualized revenue per leased square foot was $16.74, an increase from $16.49 in the same period of 2023.
| Risk Factor | Details |
|---|---|
| Industry Competition | Same-store occupancy at 91.5% as of September 30, 2024 |
| Regulatory Changes | Property tax expenses of $559,000 in 2023 |
| Market Conditions | Rental income of $3,070,871 in Q3 2024 |
| Operational Risks | General and administrative expenses of $2,457,551 for nine months ended September 30, 2024 |
| Financial Risks | Interest expense increased to $259,419 in Q3 2024 |
| Mitigation Strategies | Total annualized revenue per leased square foot at $16.74 |
Future Growth Prospects for Global Self Storage, Inc. (SELF)
Future Growth Prospects for Global Self Storage, Inc.
Analysis of Key Growth Drivers
Key growth drivers for the company include:
- Product Innovations: The company actively refines its revenue rate management program, incorporating internet data scraping of local competitors’ prices to maintain competitive pricing.
- Market Expansions: The company has completed expansion projects in Millbrook, NY, and McCordsville, IN, adding approximately 11,800 leasable square feet and increasing total area occupancy significantly.
- Acquisitions: Ongoing reviews of store and portfolio acquisition candidates are expected to enhance market presence.
Future Revenue Growth Projections and Earnings Estimates
Future revenue growth is projected at 1.4% for the nine months ended September 30, 2024, amounting to $9,343,354, up from $9,214,345 in the same period of 2023. Rental income specifically increased 1.2%, totaling $8,967,371 compared to $8,857,845 in 2023.
Net income for the three months ended September 30, 2024, was reported at $1,181,657, or $0.10 per fully diluted share, compared to $270,758, or $0.02 per share in the same period of 2023.
Strategic Initiatives or Partnerships That May Drive Future Growth
The company is focusing on expanding its third-party management platform, Global MaxManagementSM, to broaden its revenue base and pipeline of potential acquisitions. The total capital resources as of September 30, 2024, stand at approximately $25.1 million, which includes $6.9 million in cash and cash equivalents and $15 million available for withdrawal under a credit facility.
Competitive Advantages That Position the Company for Growth
The company benefits from:
- High Occupancy Rates: Same-store average square foot occupancy reached 91.5% as of September 30, 2024, up from 89.8% in 2023.
- Effective Pricing Strategy: Total annualized revenue per leased square foot increased to $16.74, reflecting a 1.5% increase year-over-year.
- Strong Referral Network: Customer service initiatives have bolstered local brand loyalty, enhancing demand for storage units.
Summary of Financial Performance
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Revenues | $3,200,276 | $3,090,374 | 3.6% |
| Rental Income | $3,070,871 | $2,968,263 | 3.5% |
| Net Income | $1,181,657 | $270,758 | 335.5% |
| Same-Store NOI | $2,028,542 | $1,908,875 | 6.3% |
| Overall Occupancy Rate | 91.5% | 89.8% | 1.7% |
Global Self Storage, Inc. (SELF) DCF Excel Template
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Resources:
- Global Self Storage, Inc. (SELF) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Global Self Storage, Inc. (SELF)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Global Self Storage, Inc. (SELF)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.