Taking on analysts’ expectations and winning: American Homes 4 Rent (AMH)

American Homes 4 Rent (NYSE: AMH) stock jumped 0.24% on Friday to $34.02 against a previous-day closing price of $33.94. With 2.27 million shares changed hands, the volume of the stock remained heavier than its average volume of 1.98 million shares. During the session, the REIT – Residential company that operates in wider Real Estate sector, reached to the highest price of $34.26 whereas the lowest price it dropped to was $33.37. The 52-week range on AMH shows that it touched its highest point at $44.07 and its lowest point at $32.60 during that stretch. It currently has a 1-year price target of $42.67. With its current market cap of 11.83 billion, AMH has annualized dividend of $0.72 while the current yield stands at 2.12%. Beta for the stock currently stands at 0.60.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of AMH was down-trending over the past week, with a drop of -4.52%, but this was down by -6.33% over a month. Three-month performance dropped to -1.65% while six-month performance fell -10.59%. The stock lost -15.48% in the past year, while it has lost -21.99% so far this year. A look at the trailing 12-month EPS for AMH yields 0.58 with Next year EPS estimates of 0.57. For the next quarter, that number is 0.12. This implies an EPS growth rate of 49.60% for this year and -4.55% for next year. EPS is expected to grow by 28.50% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 37.40%.

Float and Shares Shorts:

At present, 348.48 million AMH shares are outstanding with a float of 302.49 million shares on hand for trading. On Jul 14, 2022, short shares totaled 12.4 million, which was 3.56% higher than short shares on Jun 14, 2022. In addition to Mr. David P. Singelyn CPA as the firm’s CEO & Trustee, Mr. Christopher C. Lau serves as its Chief Financial Officer.

Institutional Ownership:

Through their ownership of 95.89% of AMH’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 53.87% of AMH, in contrast to 44.36% held by mutual funds. Shares owned by individuals account for 26.59%. As the largest shareholder in AMH with 11.52% of the stake, The Vanguard Group, Inc. holds 40,068,330 shares worth 40,068,330. A second-largest stockholder of AMH, Norges Bank Investment Management, holds 18,917,160 shares, controlling over 5.44% of the firm’s shares. Principal Global Investors LLC is the third largest shareholder in AMH, holding 18,032,573 shares or 5.19% stake. With a 4.62% stake in AMH, the Government Pension Fund – Global is the largest stakeholder. A total of 16,079,001 shares are owned by the mutual fund manager. The Vanguard Real Estate Index Fund, which owns about 3.83% of AMH stock, is the second-largest Mutual Fund holder. It holds 13,300,847 shares valued at 472.98 million. Vanguard Total Stock Market Index holds 2.36% of the stake in AMH, owning 8,215,103 shares worth 292.13 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for AMH since 21 analysts follow the stock currently. There are 11 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 8 believe that the stock is worth HOLDING, 2 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With AMH analysts setting a high price target of $53.00 and a low target of $35.00, the average target price over the next 12 months is $42.63. Based on these targets, AMH could surge 55.79% to reach the target high and rise by 2.88% to reach the target low. Reaching the average price target will result in a growth of 25.31% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. AMH will report FY 2022 earnings on 02/23/2023. Analysts have provided yearly estimates in a range of $0.65 being high and $0.37 being low. For AMH, this leads to a yearly average estimate of $0.54. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. American Homes 4 Rent surprised analysts by $0.05 when it reported $0.16 EPS against a consensus estimate of $0.11. The surprise factor in the prior quarter was $0.05. Based on analyst estimates, the high estimate for the next quarter is $0.16 and the low estimate is $0.05. The average estimate for the next quarter is thus $0.11.

Summary of Insider Activity:

Insiders traded AMH stock several times over the past three months with 0 Buys and 0 Sells. In these transactions, 0 shares were bought while 0 shares were sold. The number of buy transactions has increased to 19 while that of sell transactions has risen to 15 over the past year. The total number of shares bought during that period was 861,348 while 98,186 shares were sold.

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