Strawberry Fields REIT Inc (NYSEARCA:STRW) Delivers Strong Q2 2025 Earnings Despite Market Skepticism

Strawberry Fields REIT Inc (NYSEARCA:STRW) Reports Q2 2025 Earnings: Strong Growth Amid Market Skepticism

Strawberry Fields REIT Inc (NYSEARCA:STRW) released its second-quarter 2025 earnings, showcasing significant year-over-year growth in funds from operations (FFO), adjusted funds from operations (AFFO), and net income. However, the market reaction has been muted, with shares declining slightly in pre-market trading despite the company’s robust operational performance.

Key Financial Highlights vs. Estimates

• Revenue: Reported rental revenues of $37.9 million, a 29% increase from $29.2 million in Q2 2024. Analysts had expected $38.4 million, meaning the company slightly missed revenue estimates.
• Earnings Per Share (EPS): The company posted net income of $8.7 million, translating to an EPS of $1.52, far exceeding the consensus estimate of $0.0689.
• Funds From Operations (FFO): FFO rose to $20.0 million, up from $15.2 million in the prior-year quarter.
• Adjusted FFO (AFFO): Increased to $18.9 million, compared to $14.3 million in Q2 2024.

The substantial beat on EPS suggests strong operational efficiency, but the slight revenue miss may explain the tepid market reaction. Investors could be weighing the company’s aggressive expansion against rising interest expenses, which climbed 48% year-over-year due to new debt issuances.

Operational and Strategic Developments

The quarter was marked by several key acquisitions and financing moves:

• Acquisition of a 112-bed skilled nursing facility near Houston, Texas, for $11.5 million, adding $1.3 million in annual base rent.
• $59 million purchase agreement for nine skilled nursing facilities in Missouri, expected to contribute $6.1 million in additional annual rent.
• $90 million bond issuance on the Tel Aviv Stock Exchange at a 6.7% fixed interest rate, with proceeds used to refinance higher-cost debt.

Chairman & CEO Moishe Gubin emphasized the strength of the company’s master lease structure, calling it a "beneficial model for both landlord and tenant." He also noted that the stock remains undervalued, trading at a "significant discount to market."

Market Reaction & Outlook

Despite strong earnings growth, STRW shares dipped ~0.3% in pre-market trading, possibly reflecting investor caution around:

• Higher interest expenses (up $3.7 million YoY).
• Revenue slightly missing estimates, despite strong YoY growth.
• Macroeconomic uncertainty impacting REIT valuations.

Analysts project full-year 2025 revenue of $155.52 million and Q3 2025 sales of $39.27 million. The company did not provide explicit forward guidance, but its aggressive acquisition strategy suggests continued portfolio expansion.

Conclusion

Strawberry Fields REIT delivered strong bottom-line growth in Q2, beating EPS estimates by a wide margin, though revenue came in slightly below expectations. The market’s muted reaction may reflect broader sector concerns rather than company-specific weaknesses.

For more detailed earnings estimates and historical performance, visit STRW Earnings & Estimates.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence before making any financial decisions.