Shares of Comstock Holding Companies, Inc. CHCI have gained 47.9% since the company reported its earnings for the quarter ended Dec. 31, 2024. This compares to the S&P 500 index’s 1.9% growth over the same time frame. Over the past month, the stock has gained 35.6% against the S&P 500’s 1.6% decline.

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Comstock reported fourth-quarter 2024 earnings per share of 99 cents, which rose from 18 cents in the prior-year quarter. 

Revenues of $16.9 million denoted a 54% increase from $11 million in the prior-year period. Net income surged to $10.3 million, up from $1.9 million a year ago, driven by a 162% rise in operating income. Adjusted EBITDA, which was corrected from an earlier misstatement, climbed 148% year-over-year to $5.4 million.

Other Key Business Metrics

The company’s managed portfolio expanded significantly during 2024, ending the year with 72 assets under management compared to 49 in the prior year. ParkX Management, Comstock’s parking management subsidiary, was a notable contributor, with revenue increases of 56% for the quarter and 69% for the full year. Comstock generated $7.8 million in operating cash flow during the quarter and held $28.8 million in cash at year-end, up from $18.8 million a year earlier.

Leasing metrics were also strong across the portfolio. Stabilized commercial properties achieved a 93% lease rate, with eight new commercial leases totaling 104,000 square feet executed in the fourth quarter. The residential portfolio was 96% leased, with over 600 units leased during the year and average in-place rents increasing by 4% compared to the prior year.

Management Commentary

Chairman and CEO Christopher Clemente emphasized the company’s consistent financial performance since transitioning to an asset-light, debt-free model. He cited a compound annual growth rate of 25% in top-line revenues and highlighted the strength of recurring fee-based revenue streams. Clemente also pointed to the operating cash flow generation and healthy balance sheet as enablers for future growth and investment opportunities.

Clemente further highlighted the demand for Comstock’s transit-oriented, mixed-use neighborhoods. He referenced high occupancy rates and the signing of a new 87,000 square foot lease with Carfax at the Reston Station Metro Plaza. He characterized the company as well-positioned to continue delivering value to stakeholders.

Factors Influencing the Headline Numbers

The year-over-year growth in both quarterly and annual results was primarily driven by increases in recurring fee-based property and parking management revenues, as well as supplemental asset management fee revenues. Operating costs rose in tandem with revenues but at a slower pace, contributing to improved profitability. Notably, cost of revenue for the fourth quarter increased 33% to $11.3 million, while total operating expenses rose 30% to $11.8 million.

Non-operating items also provided a tailwind. Interest income rose to $0.2 million from $0.1 million in the prior-year quarter, and the company recorded a small gain on real estate ventures, reversing a loss from the prior period. The tax benefit of $5 million in the fourth quarter also boosted net income materially.

Full-Year Update

For the full year 2024, revenues increased 15% year over year to $51.3 million, while net income surged 87% to $14.6 million. Annual Adjusted EBITDA rose 11% to $11.6 million. Earnings per share of $1.41 improved from the 2023 reported figure of 77 cents.

Other Developments

Comstock continued progress on The Row at Reston Station, a major component of the five-phase Reston Station development. This 1.5 million square foot project includes two Trophy-class office towers, the BLVD Haley luxury residential tower, Virginia’s first JW Marriott hotel and branded condominiums, and high-end retail spaces. Pre-sales for the JW Marriott-branded condos are exceeding expectations, and delivery is on schedule for late 2025. The development also includes unique retail tenants such as VIDA Fitness, Puttshack and Ebbitt House, the first expansion of D.C.’s Old Ebbitt Grill.

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

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