NYSE:EPR
EPR PROPERTIES
A premier North American owner of entertainment venue real estate generating strong cash flow through long-term leases with independent operators.
Key Metrics
Investment Thesis
Bull Case
Investors should consider EPR Properties for its high dividend yield supported by a diversified portfolio of essential entertainment venues that provide recession-resistant consumer spending. The long-term lease structures with reputable operators create predictable, multi-year revenue streams that offer stability even when consumer discretionary budgets tighten. With a healthy balance sheet showing $90.6M in cash equivalents and strong operating margins, the stock offers attractive value relative to peers.
Bear Case
The company faces significant leverage risks given its high debt load, with interest expense of $133.1M potentially eroding profits if rates remain elevated or credit spreads widen. Recent financial data shows volatile net income trends and large non-operating losses that could signal underlying operational headwinds or one-time charges affecting future earnings quality. The heavy reliance on third-party operators introduces execution risk, as tenant failures could result in vacant properties and substantial write-downs.
About EPR PROPERTIES
EPR Properties is a leading owner and operator of premium real estate venues across North America, specializing in entertainment complexes like theaters, bowling alleys, and sports centers. The company serves diverse markets by leasing high-quality space to third-party operators who run daily attractions for families and tourists. Key revenue drivers include long-term lease agreements with stable tenants in the leisure and hospitality sectors.
Analysis
Management Discussion
The company reported a robust net profit of $274.9M in 2025, driven by strong operating cash flow of $421.0M that significantly exceeded the net income figure due to non-cash adjustments and depreciation. While debt issuances reached $1.07B against repayments of $997.0M, the substantial dividend payout of $290.7M demonstrates management's confidence in generating sufficient free cash flow to return capital to shareholders despite heavy financing activities.
Industry Overview
The leisure real estate industry is characterized by ownership of specialized assets like theaters and bowling alleys that are rarely built from scratch due to high construction costs and zoning restrictions. Operators in this sector typically prefer buying existing buildings or leasing them rather than developing new ones, creating a consistent demand for owners like EPR. This dynamic allows property owners to capitalize on scarcity and long-term lease terms while operators handle the operational complexities of daily business.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $658.0M | $705.7M | $698.1M | $718.4M |
| Cost of Revenue | $0 | $0 | $0 | $0 |
| Gross Profit | $658.0M | $705.7M | $698.1M | $718.4M |
| Operating Expenses | $347.1M | $399.3M | $382.4M | $304.1M |
| Operating Income | $311.0M | $306.4M | $315.7M | $414.3M |
| G&A | $51.6M | $56.4M | $50.1M | $55.8M |
| Stock-Based Comp | — | $17.5M | $14.1M | $15.3M |
| D&A | $163.7M | $168.0M | $165.7M | $169.2M |
| Depreciation | $158.8M | $159.3M | $161.9M | $165.4M |
| Other OpEx | $295.5M | $342.8M | $332.3M | $248.2M |
| Non-Operating Income | $-133.5M | $-131.6M | $-168.2M | $-136.9M |
| Interest Expense | $131.2M | $124.9M | $130.8M | $133.1M |
| Pre-Tax Income | $177.5M | $174.8M | $147.5M | $277.4M |
| Income Tax | $1.2M | $1.7M | $1.4M | $2.5M |
| Continuing Ops | $176.2M | $173.0M | $146.1M | $274.9M |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $176.2M | $173.0M | $146.1M | $274.9M |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $176.2M | $173.0M | $146.1M | $274.9M |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Cash & Equivalents | $107.9M | $78.1M | $22.1M | $90.6M |
| Goodwill | $693.0K | $693.0K | $693.0K | $693.0K |
| Operating Leases | $201.0M | $186.6M | $173.4M | $170.8M |
| Total Assets | $5.76B | $5.70B | $5.62B | $5.70B |
| Total Liabilities | $3.22B | $3.25B | $3.29B | $3.37B |
| Shareholders' Equity | $2.54B | $2.45B | $2.32B | $2.33B |
| Paid-In Capital | $3.90B | $3.92B | $3.95B | $3.98B |
| AOCI | $1.9M | $3.3M | $-3.8M | $1.0M |
| Treasury Stock | $269.8M | $274.0M | $285.4M | $295.3M |
| Total L&E | $5.76B | $5.70B | $5.62B | $5.70B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $176.2M | $173.0M | $146.1M | $274.9M |
| Non-Cash Adjustments | $279.2M | $245.2M | $210.2M | $130.9M |
| Working Capital Changes | $-13.7M | $28.8M | $36.8M | $15.1M |
| Cash from Operations | $441.7M | $447.1M | $393.1M | $421.0M |
| Capital Expenditures | — | $269.4M | $263.9M | — |
| Cash from Investing | $-351.6M | $-201.0M | $-176.4M | $-121.7M |
| Debt Issuances | $0 | $0 | $244.0M | $1.07B |
| Debt Repayments | $0 | $0 | $205.6M | $997.0M |
| Share Buybacks | $4.3M | $3.7M | $11.4M | $9.9M |
| Dividends Paid | $265.7M | $272.2M | $279.9M | $290.7M |
| Cash from Financing | $-269.4M | $-275.7M | $-261.6M | $-236.7M |
| FX Effect | $-129.0K | $119.0K | $-448.0K | $403.0K |
| Net Change in Cash | $-179.4M | $-29.5M | $-45.3M | $62.9M |
| Beginning Cash | $289.9M | $110.5M | $81.0M | $35.7M |
| Ending Cash | $110.5M | $81.0M | $35.7M | $98.6M |
Frequently Asked Questions
How does EPR PROPERTIES make money?
Primary revenue comes from leasing properties such as movie theaters, bowling centers, family entertainment centers, and sports complexes to third-party operators. The company also generates income from selling advertising space within its venues and collecting fees related to property management and maintenance services provided to tenants.
What are the main risks for EPR?
Interest rate sensitivity remains a critical risk as the company holds significant debt ($1.07B issuances noted) with rising rates increasing refinancing costs and interest expense. Tenant financial distress could lead to lease defaults or bankruptcy, potentially leaving the owner responsible for vacated properties in declining markets. Economic downturns may reduce foot traffic for leisure activities, forcing tenants to renegotiate rent terms or seek property divestiture.
What is EPR's competitive advantage?
The firm holds long-term leases with high credit-quality tenants who operate the day-to-day businesses, providing stable cash flow insulated from direct consumer spending volatility. Its portfolio is geographically diversified across major U.S. metropolitan areas, reducing exposure to any single local market downturn. The company benefits from owning prime real estate in entertainment districts where land scarcity creates inherent value.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.