Invitation Homes Earnings: Rapid Expansion of the Third-Party Property Management Service Platform

First-quarter results for Invitation Homes were in line with our expectations, leading us to reaffirm our $41 fair value estimate for the no-moat company. Same-store occupancy improved 50 basis points sequentially to 97.6%, better than our estimate of flat growth. Average monthly rents increased 4.6% year over year, leading to same-store revenue growth of 5.6%, which was slightly better than our estimate of 5.1%. However, same-store operating expenses were up even higher, increasing 7.4% in the first quarter. As a result, same-store net operating income increased 4.7% in the quarter, which was in line with our estimate of 4.6%. Invitation Homes reported core funds from operations of $0.47 per share, which was in line with our estimate and 6.0% higher than the $0.44 reported in the first quarter of 2023.