One-glance verdict
Undervalued
$53.01 our estimate vs market $35.87
Wall Street consensus: $39.23 (-26.0% lower than our fair-value estimate)
32% below our estimate, below the bear case
Fundamentals snapshot
Vornado Realty Trust
VNO · NYQ · Real Estate · REIT - Office
Current price
$35.87
52-week range
$24.57 - $41.60
Market cap
$7.10B
Balance sheet
Distressed
0.81x Concerning
Net debt $7.57B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 1.0% last year.
- Reward Free cash flow was positive in 4/10 years.
- Risk Operating margin compressed from 16.0% to 8.5% over 3 years.
- Risk Return on equity was -0.3% last year — the company lost money on shareholders' equity.
What this company does
Vornado Realty Trust
Vornado Realty Trust owns and manages a lot of big buildings like offices and apartments, mostly in New York City. The money they make mainly comes from the rent tenants pay to use these spaces. This is important because their profits depend on how many people want to rent their buildings and how much they can charge for rent.
How the company got here
Vornado Realty Trust's story began not with skyscrapers, but with discount stores. Founded in 1947 as "Two Guys from Harrison," it grew into a chain of department stores. The company's trajectory shifted dramatically in the 1980s when Steven Roth took control and began divesting retail operations to focus on real estate. This pivot led to the company's conversion into a Real Estate Investment Trust (REIT) – a company that owns, operates, or finances income-generating real estate – in 1993, and its renaming to Vornado Realty Trust. Since then, Vornado has strategically acquired and developed prime office and retail properties, particularly in New York City, becoming a major player in the Manhattan real estate market.
What it actually does
Vornado Realty Trust is essentially a landlord and developer of large commercial properties. Think of them as owning and managing big buildings where businesses operate (offices) and where people shop (retail spaces). They don't make products you'd buy off a shelf; instead, they provide the physical spaces where other companies conduct their business. Vornado's main goal is to own, lease, and develop these properties, aiming to generate income from rent and increase the value of their real estate holdings over time. They focus on high-quality, well-located properties, especially in New York City.
New York City Office Properties
This is Vornado's largest business segment, making up the bulk of its real estate holdings. They own and manage a significant amount of office space, close to 20 million square feet, primarily in Midtown Manhattan. These are the buildings where companies house their employees and conduct their day-to-day operations. Vornado aims to attract and retain high-profile tenants, such as major corporations, by offering premium office environments. The company is actively redeveloping and upgrading these properties, like the PENN District, to make them more attractive and modern for today's businesses.
Manhattan Street Retail
Vornado is a major owner and manager of retail spaces located on prominent streets in Manhattan, often referred to as "high street retail." These are the kinds of stores you'd find in prime shopping districts, often occupied by well-known brands looking for flagship locations. This segment is smaller than their office holdings but is crucial because of the scarcity and high value of these retail spots. Vornado focuses on leasing these spaces to retailers who want to have a significant presence in these sought-after areas, generating rental income from these prime locations.
The PENN District
This is a significant development and redevelopment initiative by Vornado, focused on transforming the area around Pennsylvania Station in New York City into a vibrant business and cultural hub. It involves upgrading existing office buildings, like PENN 1 and PENN 2, and developing new spaces. The goal is to create a modern, amenity-rich environment that attracts both businesses and visitors. This project represents a substantial investment in reshaping a key part of Manhattan, aiming to create long-term value through a cluster of interconnected, high-quality properties.
Other Properties (Chicago and San Francisco)
While Vornado's primary focus is New York City, they also own significant properties in other major cities. This includes THE MART in Chicago, which is a very large commercial building, and a stake in a prominent office tower at 555 California Street in San Francisco. These assets provide geographic diversification to their portfolio, meaning they aren't solely reliant on the New York market. Owning these premier properties in other key cities allows Vornado to tap into different real estate markets and tenant bases.
What management is betting on now
Vornado's management is focused on a strategy of "flight to quality" within the office market, meaning they are investing in upgrading their best properties to attract and retain top-tier tenants. They are heavily involved in the redevelopment and enhancement of their New York City assets, particularly in the PENN District, aiming to create modern, amenity-rich environments. Sustainability is also a key priority, with a commitment to LEED certifications and reducing their environmental footprint. The company believes that by concentrating on premier, irreplaceable urban assets and actively managing and developing them, they can create long-term value and maintain a dominant position in their chosen markets.
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
$462.24M
Net income
$31.96M
Diluted EPS
0.08
Operating cash flow
$163.70M
Free cash flow
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Sources
Revenue
$459.11M
Net income
$-7.32M
Diluted EPS
-0.12
Operating cash flow
$47.75M
Free cash flow
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Sources
Revenue
$453.71M
Net income
$16.13M
Diluted EPS
0.01
Operating cash flow
$146.27M
Free cash flow
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Sources
Revenue
$453.70M
Net income
$27.11M
Diluted EPS
0.06
Operating cash flow
$33.17M
Free cash flow
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Sources
Revenue
$441.44M
Net income
$759.35M
Diluted EPS
3.70
Operating cash flow
$1.03B
Free cash flow
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Sources
Revenue
$461.58M
Net income
$102.37M
Diluted EPS
0.43
Operating cash flow
$52.03M
Free cash flow
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Sources
Revenue
$457.79M
Net income
$16.73M
Diluted EPS
0.01
Operating cash flow
$206.18M
Free cash flow
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Sources
Revenue
$443.25M
Net income
$-3.63M
Diluted EPS
-0.10
Operating cash flow
$105.38M
Free cash flow
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Sources
Is it cheap or expensive?
Fair value $53.01 vs current price $35.87
Wall Street consensus is the average analyst price target: $39.23 (-26.0% lower than our fair-value estimate).
Our most-likely fair value is $53.01 a share — about 47.8% above today's price of $35.87, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Distressed
Net debt $7.6B. Interest coverage 0.8x.
Net debt
$7.57B
Interest coverage
0.81x
Vornado Realty Trust's profit covers its interest bill about 0.8 times over. and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
VNO
BASELINE
Vornado Realty Trust
Total debt $8.19B Interest coverage 0.81x This is the baseline the peer rows are being compared against.
Total debt $17.33B Interest coverage 1.55x +91% vs VNO Carries about 1.9x more debt cushion than VNO.
Total debt $6.37B Interest coverage 0.56x -31% vs VNO Carries about 1.5x less debt cushion than VNO.
Total debt $4.50B Interest coverage 2.46x +203% vs VNO Carries about 3.0x more debt cushion than VNO.
Total debt $3.65B Interest coverage 1.41x +74% vs VNO Carries about 1.7x more debt cushion than VNO.
Total debt $3.51B Interest coverage 1.37x +69% vs VNO Carries about 1.7x more debt cushion than VNO.
What you should know
The case for and against VNO
3 Rewards
2 Risks
Rewards
-
Revenue grew 1.0% last year.
-
Free cash flow was positive in 4/10 years.
-
Dividend yield is 2.1% with 36-year payout history.
Risks
-
Operating margin compressed from 16.0% to 8.5% over 3 years.
-
Return on equity was -0.3% last year — the company lost money on shareholders' equity.
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)
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Forward P/E
115.71x
P/B
1.44x
P/S
3.75x
EV/EBITDA
20.69x
PEG ratio
7.37x
Profitability
How much profit each dollar creates
Gross margin
49.8%
Operating margin
8.5%
Net margin
0.5%
ROE
-0.3%
ROA
0.9%
Health
Liquidity and balance-sheet strength
Debt / equity
1.23x
Current ratio
4.55x
Quick ratio
4.20x
Total debt
$8.19B
Total cash
$626.53M
Growth
How the business has been compounding
Revenue TTM
$1.83B
Revenue 5Y CAGR
3.3%
EPS TTM
-0.27
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$390.89M
Free CF TTM
$1.26B
FCF margin
68.8%
Dividend
Shareholder payout
Yield
2.1%
Payout ratio
1,850.0%
Last ex-div date
2025-12-18