Value
3.0/10data confidence 60%| Component | Sub-score |
|---|---|
| P/S | 4.3 |
| EV/EBITDA | 0.0 |
| p ocf | 4.7 |
- ▸P/OCF: 24.2x (FFO proxy — REITs gated off P/E)
- ▸Expensive valuation
FPI · Why this verdict
Why Farmland Partners (FPI) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score4.2/10
ConfidenceHIGH
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Farmland Partners is an expensive small-cap REIT (price to operating cash flow of 24.4x) with declining revenue, recent earnings misses and a price 12.9% above the analyst target, offset only by strong margins and a 3.5% dividend.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Price to operating cash flow is 24.4x, flagged as an expensive valuation that scores 3.0 out of 10 on value. Valuation breakdown | Valuation compresses toward 15x cash flow through price stability and growing cash flow. | →Stable |
| CounterFarmland carries hard-asset value that cash-flow multiples understate, and scarce assets can justify a premium to FFO. | ||
Revenue is declining, down 6%, and quarterly revenue of $9.4M is below the $10.3M from a year earlier. Growth breakdown | Revenue returns to positive year-over-year growth within 12 months. | →Stable |
| CounterA reported December quarter of $20.7M shows large one-time items distort comparisons, so the decline may be partly timing. | ||
The last two quarters missed estimates ($0.01 versus $0.03 and $0.02 versus $0.04), after two beats. Last 4 quarters | EPS beats consensus in the next report and in at least two of four quarters. | ↓Deteriorating |
| CounterPer-share amounts are a few cents, so small dollar differences produce large percentage misses and the average surprise is actually +74%. | ||
At $10.25 the stock trades 12.9% above the $8.92 analyst target, leaving no analyst-supported upside. Upside pct | Analyst targets rise above the current price as asset values are marked up. | →Stable |
| CounterAnalyst targets for thinly covered REITs often lag land value changes, and the 200-day average is still rising. | ||
Margins are strong at 50% and the dividend yield is 3.5%, giving income support despite weak growth. Quality breakdown | The dividend is maintained and free cash flow stays above 65% of net income. | →Stable |
| CounterOnly 65% of net income converts to free cash flow, and dividend safety scores 6.5 out of 10 with falling revenue. | ||
Price to operating cash flow is 24.4x, flagged as an expensive valuation that scores 3.0 out of 10 on value.
→StableValuation breakdown
- Expectation
- Valuation compresses toward 15x cash flow through price stability and growing cash flow.
CounterFarmland carries hard-asset value that cash-flow multiples understate, and scarce assets can justify a premium to FFO.
Revenue is declining, down 6%, and quarterly revenue of $9.4M is below the $10.3M from a year earlier.
→StableGrowth breakdown
- Expectation
- Revenue returns to positive year-over-year growth within 12 months.
CounterA reported December quarter of $20.7M shows large one-time items distort comparisons, so the decline may be partly timing.
The last two quarters missed estimates ($0.01 versus $0.03 and $0.02 versus $0.04), after two beats.
↓DeterioratingLast 4 quarters
- Expectation
- EPS beats consensus in the next report and in at least two of four quarters.
CounterPer-share amounts are a few cents, so small dollar differences produce large percentage misses and the average surprise is actually +74%.
At $10.25 the stock trades 12.9% above the $8.92 analyst target, leaving no analyst-supported upside.
→StableUpside pct
- Expectation
- Analyst targets rise above the current price as asset values are marked up.
CounterAnalyst targets for thinly covered REITs often lag land value changes, and the 200-day average is still rising.
Margins are strong at 50% and the dividend yield is 3.5%, giving income support despite weak growth.
→StableQuality breakdown
- Expectation
- The dividend is maintained and free cash flow stays above 65% of net income.
CounterOnly 65% of net income converts to free cash flow, and dividend safety scores 6.5 out of 10 with falling revenue.
Per-dimension breakdown
Quality
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.7 |
| ROA | 1.3 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 4.1 |
| FCF quality | 5.0 |
| Moat | 5.4 |
| Rule of 40 | 5.5 |
| Piotroski F | 4.4 |
- ▸Strong margins: 50%
- ▸Earnings quality warning: 65% FCF/NI
- ▸No competitive moat
Growth
0.6/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 1.1 |
| EPS growth | 0.0 |
- ▸Declining revenue: -6%
Momentum
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 3.4 |
| OBV | 5.5 |
| MA position | 2.2 |
| Volume | 2.1 |
- ▸Below 200-MA but MA still rising (+1.5%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 2.5 |
| Analyst rating | 5.0 |
| Price target | 5.5 |
- ▸LLM news sentiment: -0.50 (n=3)
Insider
6.1/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 6.3 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.6 |
| quality rank | 6.2 |
| growth rank | 0.7 |
- ▸Best-in-class margins
- ▸Conservative debt levels
Technical
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 7.0 |
| support resistance | 8.3 |
| 52w position | 5.7 |
Risk (lower is worse)
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 4.5 |
| days to cover | 5.2 |
| volatility | 6.5 |
| put call | 9.8 |
| implied vol | 7.6 |
| beta | 8.8 |
| debt equity | 8.1 |
Catalyst
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 3.5 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 6.5 |
| news activity | 8.0 |
- ▸Earnings concerns: 1B/3M
- ▸Dividend: 3.5%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:118d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.5<4.5
- ASYMMETRY:-2.4=NEGATIVE
Warning (0)
none
Reward-to-Risk
-2.38
Upside
-11.9%
Downside
5.0%
Sizing output
AVOID
SetupRange Bound — RSI 40 mid-range, Bollinger mid-band
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $0.4B<$5B
Investment implication
The F-path SELL output reflects an overall score of 3.0 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Risk (lower is worse) at 7.2) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:3.5<4.5, ASYMMETRY:-2.4=NEGATIVE) reinforce the read. Current asymmetry R:R is -2.38 — supplementary context, not the trigger for this path.
The strongest dimensions are Risk (lower is worse) at 7.2, Technical at 7.0, and Insider at 6.1; the weakest are Growth at 0.6, Value at 3.0, and Momentum at 3.5. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -2.38 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Expensive Cash Flow Valuation
Trip ifPrice to operating cash flow falls below 15x from the current 24.4x.
- P2Declining Revenue
Trip ifYear-over-year revenue growth exceeds 5% for 2 consecutive quarters.
- P3Recent Earnings Misses
Trip ifEPS surprise exceeds 0% for 2 consecutive quarters.
- P4Price Above Analyst Target
Trip ifAnalyst target rises above $11.28, at least 10% above the current $10.25 price.
- P5High Margins And Dividend
Trip ifFree cash flow falls below 50% of net income from the current 65%.