One-glance verdict
Undervalued
$88.26 our estimate vs market $22.72
Wall Street consensus: $25.21 (-71.4% lower than our fair-value estimate)
74% below our estimate, below the bear case
Fundamentals snapshot
Easterly Government Properties, Inc.
DEA · NYQ · Real Estate · REIT - Office
Current price
$22.72
52-week range
$20.56 - $25.96
Market cap
$1.11B
Balance sheet
Stretched
1.14x Concerning
Net debt $1.67B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 8.5% last year.
- Reward Returns 1.1% on equity, ahead of 60% of its peers.
- Risk Forward P/E (87.4x) is higher than trailing (78.3x) - earnings are expected to drop.
- Risk Net debt grew 32.1% over 3 years.
What this company does
Easterly Government Properties, Inc.
Easterly Government Properties buys, builds, and manages office buildings that they rent out to the U.S. government. This means their main source of money comes from long-term rental agreements, like a steady stream of income (this is called recurring revenue), with a very reliable tenant. This makes their business model quite stable because the government is a dependable renter, which is important for consistent earnings.
How the company got here
Easterly Government Properties was founded in 2011 and went public in 2015, emerging from a strategy to create a real estate investment trust (REIT) specifically focused on federal government tenants. The company's initial portfolio was built from properties already leased to federal agencies, assembled by early investors and executives. This unique focus on government-leased real estate allowed Easterly to tap into a niche market where understanding the government's specific needs and leasing processes was key to success. The company's public offering created one of the few investment vehicles dedicated to this specialized sector of real estate.
What it actually does
Easterly Government Properties is a real estate company that owns, acquires, develops, and manages buildings. These buildings are not just any buildings; they are specifically designed and leased to agencies of the U.S. government. Think of them as specialized office spaces, laboratories, or clinics that house essential government operations. The company makes money by collecting rent from these government agencies under long-term lease agreements. This focus on government tenants makes Easterly different from typical commercial real estate companies, as it caters to a very stable and predictable client base.
U.S. Government Leased Properties
This is the core of Easterly's business. The company owns and manages properties that are leased to various U.S. federal government agencies. These agencies, such as the Department of Veterans Affairs, the Federal Bureau of Investigation (FBI), and the Drug Enforcement Administration (DEA), occupy these buildings for their critical operations. The leases are typically long-term, providing a stable and predictable stream of rental income for Easterly. These properties are often specialized, designed to meet specific security and operational needs of the agencies, making them less likely to be vacated compared to generic office spaces.
What management is betting on now
Easterly's management is focused on growing the company's portfolio through careful acquisitions of new government-leased properties that fit their investment criteria. They are also emphasizing the development and redevelopment of properties, which allows them to create spaces even more tailored to government needs and secure longer lease terms. A key strategic priority is to increase the focus on specialized federal asset types, such as Veterans Affairs outpatient clinics and laboratories, which are less interchangeable than standard office buildings. The company is also working towards achieving an investment-grade credit rating, which could help lower their borrowing costs.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
Revenue
$93.61M
Net income
$5.50M
Diluted EPS
0.11
Operating cash flow
$47.39M
Free cash flow
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Sources
Revenue
$92.42M
Net income
$3.05M
Diluted EPS
0.06
Operating cash flow
$44.58M
Free cash flow
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Sources
Revenue
$91.55M
Net income
$1.36M
Diluted EPS
0.02
Operating cash flow
$27.34M
Free cash flow
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Sources
Revenue
$87.04M
Net income
$4.59M
Diluted EPS
0.09
Operating cash flow
$41.93M
Free cash flow
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Sources
Revenue
$86.15M
Net income
$1.21M
Diluted EPS
0.02
Operating cash flow
$154.97M
Free cash flow
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Sources
Revenue
$84.23M
Net income
$4.07M
Diluted EPS
0.09
Operating cash flow
$38.11M
Free cash flow
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Revenue
$78.67M
Net income
$3.13M
Diluted EPS
0.07
Operating cash flow
$24.19M
Free cash flow
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Revenue
$78.25M
Net income
$5.45M
Diluted EPS
0.05
Operating cash flow
$24.55M
Free cash flow
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Is it cheap or expensive?
Fair value $88.26 vs current price $22.72
Wall Street consensus is the average analyst price target: $25.21 (-71.4% lower than our fair-value estimate).
Our most-likely fair value is $88.26 a share — about 288.5% above today's price of $22.72, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Stretched
Net debt $1.7B. Interest coverage 1.1x.
Net debt
$1.67B
Interest coverage
1.14x
Easterly Government Properties, Inc.'s profit covers its interest bill about 1.1 times over. which is stronger than most peers shown here and 3 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Stretched
Worse cushion
Baseline
Better cushion
DEA
BASELINE
Easterly Government Properties, Inc.
Total debt $1.68B Interest coverage 1.14x This is the baseline the peer rows are being compared against.
Total debt $2.62B Interest coverage 2.70x +136% vs DEA Carries about 2.4x more debt cushion than DEA.
Total debt $2.34B Interest coverage 0.62x -46% vs DEA Carries about 1.8x less debt cushion than DEA.
Total debt $2.43B Interest coverage 0.58x -50% vs DEA Carries about 2.0x less debt cushion than DEA.
Total debt $444.60M Interest coverage -0.07x -100% vs DEA This peer has almost no interest-payment cushion compared with DEA.
What you should know
The case for and against DEA
3 Rewards
3 Risks
Rewards
-
Revenue grew 8.5% last year.
-
Returns 1.1% on equity, ahead of 60% of its peers.
-
Free cash flow was positive in 4/10 years.
Risks
-
Forward P/E (87.4x) is higher than trailing (78.3x) - earnings are expected to drop.
-
Net debt grew 32.1% over 3 years.
-
Stock trades 23.2% above its 5-year average P/E.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
78.34x
Forward P/E
87.38x
P/B
0.82x
P/S
3.00x
EV/EBITDA
12.79x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
67.5%
Operating margin
27.0%
Net margin
3.9%
ROE
1.1%
ROA
1.7%
Health
Liquidity and balance-sheet strength
Debt / equity
1.25x
Current ratio
0.29x
Quick ratio
0.23x
Total debt
$1.68B
Total cash
$6.48M
Growth
How the business has been compounding
Revenue TTM
$364.61M
Revenue 5Y CAGR
5.2%
EPS TTM
0.29
EPS 5Y CAGR
-31.8%
Cash flow
How much cash the business throws off
Operating CF TTM
$161.23M
Free CF TTM
$259.19M
FCF margin
71.1%
Dividend
Shareholder payout
Yield
7.9%
Payout ratio
620.7%
Last ex-div date
2026-11-05