Shares of Agree Realty slipped 2.5% to $78.42 on July 30, trimming a recent run that had the stock up about 10% over six months. The filing explains why: the business is still growing, but management has relied on debt and equity financing to fund growth, and the stock trades at a premium to peers.
Revenue grew to $718.4M in 2025, a 16.4% increase year over year, continuing a long stretch that took sales from $111.5M in 2017 to today. The company converts earnings into cash — operating cash flow covered net income 2.47x in the latest annual period — which supports the case that the underlying business is earning money today.
But the mechanics of paying for growth show up elsewhere: margins slipped and the shareholder base widened. Operating margin fell by 1.6 percentage points and net margin fell by 2.2 points in the latest year, while diluted shares rose 9.2%.
Management lists financing activity front and center.
"Financing - Net cash provided by financing activities increased by $155.4 million during the six months ended June 30, 2026, compared to the same period in 2025 primarily due to: • $350.0 million increase in proceeds from the draws under the 2031 Unsecured Term Loan; • $88.7 million increase in net proceeds from the issuance of common stock; 42 Table of Contents • $87.5 million increase of net borrowings on the Revolving Credit Facility and Commercial Paper Program." (Agree Realty Corporation / 10-Q 2026-07-30)
Plainly: management pulled $350.0M from a term loan, sold $88.7M of stock and raised another $87.5M in short-term debt — enough that net cash from financing rose $155.4M in six months.
Payroll and stock comp are also up.
"The increase was primarily the result of growth in compensation costs due to inflationary increases and higher stock-based compensation expense as a result of changing 35 Table of Contents the vesting period for awards granted beginning in 2023." (Agree Realty Corporation / 10-Q 2026-07-30)
In other words: rising compensation and higher stock-based pay have increased expenses, contributing to the margin compression; the company also raised equity and debt in the period.
Now the valuation wrinkle. Agree trades at a P/E of 42.7x and an EV/sales of 12.1x on an $8.7B market cap and $8.7B enterprise value. The company includes mechanical scenarios in its paperwork — not forecasts, but arithmetic based on recent history — that show a wide range of outcomes. The bull case assumes revenue CAGR of 23.6% (exit P/E 42.7x); the base case uses 18.7% (exit P/E 42.7x); the bear case drops to 7.5% growth with a lower exit P/E of 28.4x. That creates a large spread between bullish and bearish results, driven mostly by what multiple the market assigns at exit.
So the tension is straightforward and concrete: Agree is growing and producing cash, but it has relied on debt and equity to fund that growth while absorbing higher compensation costs — and the stock trades at a premium to peers, which magnifies differences between the scenarios. The filing shows the levers; the market will decide how many of them are sustainable.
Figures cited are from Agree Realty filings, including the 10-Q dated 2026-07-30.