Recent Performance Snapshot

Highwoods Properties (HIW) has drawn attention after a recent one-month return of about 16%, contrasted with a roughly 9% decline over the past three months. This performance has prompted investors to reassess the office REIT’s risk reward profile.

Despite the recent 16.1% 1 month share price return, momentum looks mixed when set against a 9.1% 3 month share price decline and a 9.6% 1 year total shareholder return loss.

If that mixed picture has you looking beyond office REITs, it could be a good moment to broaden your search with our screener of 18 top founder-led companies

With Highwoods trading at $23.89 and sitting at what some models suggest is roughly a 36% intrinsic discount, you have to ask: is this an underappreciated office REIT, or is the market already pricing in future growth?

Most Popular Narrative: 9.3% Undervalued

The most widely followed narrative pegs Highwoods Properties' fair value at about $26.33, compared with the recent close at $23.89. This frames the current price as a discount that hinges on how future office demand and profitability play out under an 8.29% discount rate.

Aging buildings and the need for continual asset modernization, including sustainability retrofits and elevated tenant improvements, will keep capital expenditures high over the next several years, putting sustained pressure on net margins and limiting growth in cash flows.

Curious how a business facing higher capital spend and margin pressure can still screen as undervalued? The narrative leans heavily on measured revenue growth, profit compression and a richer future earnings multiple. The full story is in how those moving parts interact over time, not just today’s share price.

Result: Fair Value of $26.33 (UNDERVALUED)

However, stronger than expected leasing in Sunbelt markets and limited new office supply could tighten vacancies and support higher rents, which would challenge the cautious margin story.

Next Steps

Mixed signals or a setup worth a closer look? With both risks and rewards on the table, consider the data while it is fresh and evaluate it for yourself by checking out the 3 key rewards and 3 important warning signs

Looking for more investment ideas?

If you stop here, you only see part of the opportunity set. Use the screener to compare Highwoods with other ideas and sharpen your next move.

• Spot potential bargains early by scanning screener containing 25 high quality undiscovered gems that combine strong fundamentals with limited market attention.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.