InterGroup Corporation (INTG) has seen its shares rise 45% year-to-date, significantly outpacing the real estate development industry, which has declined by 6.3%. Competitors New World Development Company Limited (NDVLY) and Forestar Group Inc. (FOR) experienced modest gains of 15.1% and 11.3%, respectively, during the same period. This growth is largely driven by robust hotel revenues, particularly from the Hilton San Francisco Financial District, alongside completed renovations and an uptick in business travel demand.
For the first nine months of fiscal 2026, InterGroup reported a turnaround to net income compared to a loss in the previous year, attributed to higher hotel operating income, reduced investment losses, and improved financial efficiency. The company generated approximately $2.6 million from the sale of a non-core Los Angeles apartment property, bolstering its liquidity position, which includes higher cash balances and marketable securities. Despite these advancements, the company faces challenges such as a slow recovery in the San Francisco hospitality market and significant debt obligations.
INTG currently trades at 3.7X trailing 12-month EV/sales, below the industry average of 4.56X, presenting a potentially undervalued investment opportunity relative to peers like NDVLY and FOR.
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