Nexpoint Residential Trust Stock Beneish M Score

NXRT Stock  USD 46.48  0.30  0.65%   
This module uses fundamental data of Nexpoint Residential to approximate the value of its Beneish M Score. Nexpoint Residential M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Check out Nexpoint Residential Piotroski F Score and Nexpoint Residential Altman Z Score analysis.
  
Cash Flow To Debt Ratio is likely to gain to 1.48 in 2024, whereas Net Debt is likely to drop slightly above 1.1 B in 2024. At this time, Nexpoint Residential's Payables Turnover is comparatively stable compared to the past year. Average Inventory is likely to gain to about 57 M in 2024, whereas PTB Ratio is likely to drop 1.70 in 2024.
At this time, it appears that Nexpoint Residential is an unlikely manipulator. The earnings manipulation may begin if Nexpoint Residential's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Nexpoint Residential executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Nexpoint Residential's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
-2.29
Beneish M Score - Unlikely Manipulator
Elasticity of Receivables

1.68

Focus
Asset Quality

0.79

Focus
Expense Coverage

1.17

Focus
Gross Margin Strengs

0.75

Focus
Accruals Factor

1.17

Focus
Depreciation Resistance

0.49

Focus
Net Sales Growth

0.62

Focus
Financial Leverage Condition

1.02

Focus

Nexpoint Residential Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Nexpoint Residential's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Net Receivables15.3 M14.6 M
Sufficiently Up
Slightly volatile
Total Revenue173.1 M277.5 M
Way Down
Slightly volatile
Total Assets1.5 B2.1 B
Way Down
Slightly volatile
Total Current Assets262.8 M250.3 M
Sufficiently Up
Slightly volatile
Non Current Assets Total1.4 B1.9 B
Way Down
Slightly volatile
Property Plant Equipment1.4 B2.2 B
Way Down
Slightly volatile
Depreciation And Amortization132.1 M95.2 M
Significantly Up
Slightly volatile
Selling General Administrative19.6 M26.7 M
Way Down
Slightly volatile
Total Current Liabilities10.7 M11.2 M
Notably Down
Very volatile
Non Current Liabilities Total1.2 B1.5 B
Significantly Down
Slightly volatile
Long Term Debt1.1 B1.5 B
Significantly Down
Slightly volatile
Total Cash From Operating Activities50.2 M96.6 M
Way Down
Slightly volatile
Investments33.4 M35.2 M
Notably Down
Slightly volatile
Short Term Investments77.7 M74 M
Sufficiently Up
Slightly volatile
Long Term Investments1.5 B2.3 B
Way Down
Slightly volatile
Gross Profit Margin0.450.6022
Way Down
Slightly volatile

Nexpoint Residential Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Nexpoint Residential's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Nexpoint Residential in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Nexpoint Residential's degree of accounting gimmicks and manipulations.

About Nexpoint Residential Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Depreciation And Amortization

132.11 Million

At this time, Nexpoint Residential's Depreciation And Amortization is comparatively stable compared to the past year.

Nexpoint Residential Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Nexpoint Residential. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201920202021202220232024 (projected)
Net Receivables6.3M9.0M4.8M17.1M14.6M15.3M
Total Revenue181.1M204.8M219.2M264.0M277.5M173.1M
Total Assets1.9B1.8B2.1B2.2B2.1B1.5B
Total Current Assets123.8M66.1M93.5M168.8M250.3M262.8M
Net Debt1.3B1.3B1.5B1.6B1.5B1.1B
Short Term Debt216.5M896K1.5M307K(105.1M)(99.9M)
Long Term Debt1.4B1.2B1.3B1.6B1.5B1.1B
Operating Income15.5M15.3M19.8M32.8M113.2M118.8M
Investments286.5M140.2M90.2M36.5M35.2M33.4M
Gross Profit Margin0.560.570.590.580.60.45

Nexpoint Residential ESG Sustainability

Some studies have found that companies with high sustainability scores are getting higher valuations than competitors with lower social-engagement activities. While most ESG disclosures are voluntary and do not directly affect the long term financial condition, Nexpoint Residential's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Nexpoint Residential's managers, analysts, and investors.
Environmental
Governance
Social

About Nexpoint Residential Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Nexpoint Residential Trust's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Nexpoint Residential using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Nexpoint Residential Trust based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.

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Additional Tools for Nexpoint Stock Analysis

When running Nexpoint Residential's price analysis, check to measure Nexpoint Residential's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Nexpoint Residential is operating at the current time. Most of Nexpoint Residential's value examination focuses on studying past and present price action to predict the probability of Nexpoint Residential's future price movements. You can analyze the entity against its peers and the financial market as a whole to determine factors that move Nexpoint Residential's price. Additionally, you may evaluate how the addition of Nexpoint Residential to your portfolios can decrease your overall portfolio volatility.