Report
Valens Research

ACC - Embedded Expectations Analysis - 2022 05 12

American Campus Communities (ACC) currently trades at a premium relative to Uniform assets, with a 2.0x Uniform P/B (V/A').

At these levels, markets are pricing in expectations for Uniform ROA to expand to 7%, accompanied by 3% Uniform asset growth.

However, analysts expect Uniform ROA to improve to only 4% in 2023, accompanied by 4% Uniform asset shrinkage.

If sustained going forward, these levels would imply a stock price closer to $5, representing significant potential equity downside for the firm.

Moreover, the firm's most recent earnings call suggests management may have concerns about net asset value and campus transactions.
Underlying
American Campus Communities Inc.

American Campus Communities is a real estate investment trust focusing on the acquisition, design, financing, development, construction management, leasing, and management of student housing properties. The company has four reportable segments: Owned Properties, which includes off-campus properties that are located in close proximity to the school campus; On-Campus Participating Properties, which includes on-campus properties that are operated under long-term ground/facility leases; Development Services, which consists of development and construction management services; and Property Management Services, which includes third-party management contracts in which the company is responsible for operations.

Provider
Valens Research
Valens Research

In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:

  • GAAP and IFRS have failed to provide rules for reliable financial statement reporting
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Many years later, our business model remains because little has changed on Wall Street.

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