Value
5.8/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 8.1 |
| EV/EBITDA | 4.2 |
| p ocf | 9.0 |
| Analyst target | 5.0 |
- ▸P/OCF: 8.0x (FFO proxy — REITs gated off P/E)
GOOD · Why this verdict
Why Gladstone Commercial Corporatio (GOOD) 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 score6.0/10
ConfidenceHIGH
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Gladstone Commercial is a high-quality REIT (quality 7.2, 282% FCF-to-net-income) with revenue growing steadily, but the price equals the analyst target, leverage is high (D/E 2.6) and dividend safety is flagged as a yield trap.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Cash conversion is excellent, with free cash flow at 282% of net income, a Rule of 40 reading of 52 and a Piotroski F-Score of 8/9, supporting a quality score of 7.2. Quality breakdown | Quality should stay above 6.5 and free cash flow should stay above net income through the next 12 months. | →Stable |
| CounterFor a REIT, depreciation inflates operating cash flow relative to net income, so a 282% ratio is structural and says little about distribution coverage. | ||
Revenue has grown steadily, with the latest quarter at about $44.0M versus $39.5M a year earlier, roughly 11% growth. Revenue quarters | Quarterly revenue should reach the $42.6M-plus estimate range and stay above $44M over the next 12 months. | →Stable |
| CounterThe next-quarter estimate of $42.6M is below the latest $44.0M, so growth may flatten as acquisitions slow. | ||
The $12.01 price equals the $12.01 analyst target, so there is no remaining analyst upside against 5.4% downside to the stop. Upside pct | Further gains require analysts to raise targets above $13 as funds from operations grow. | →Stable |
| CounterLight coverage means targets can lag, and a rising on-balance volume reading with price above the 200-day average shows buyers are still active. | ||
Leverage carries a 1.5-point penalty (D/E 2.6) and dividend safety scores only 4.8 with a yield-trap warning, which puts the payout at risk if rates stay high. Bear case | Dividend safety should rise above 6.0 and debt-to-equity should fall below 2.0 over the next 12 months. | →Stable |
| CounterExcellent cash conversion and revenue growth should cover the distribution, so the yield-trap warning may overstate the risk. | ||
EPS beat in 2 of the last 4 quarters but missed in May (-21.9%) and with several earlier misses, so delivery is uneven despite a +51.4% average surprise. Avg surprise pct | EPS should meet or beat the estimate at the 2026-11-03 report and stay at or above $0.05. | →Stable |
| CounterEPS of $0.04 to $0.08 is tiny, so percentage surprises swing widely on small dollar differences. | ||
Cash conversion is excellent, with free cash flow at 282% of net income, a Rule of 40 reading of 52 and a Piotroski F-Score of 8/9, supporting a quality score of 7.2.
→StableQuality breakdown
- Expectation
- Quality should stay above 6.5 and free cash flow should stay above net income through the next 12 months.
CounterFor a REIT, depreciation inflates operating cash flow relative to net income, so a 282% ratio is structural and says little about distribution coverage.
Revenue has grown steadily, with the latest quarter at about $44.0M versus $39.5M a year earlier, roughly 11% growth.
→StableRevenue quarters
- Expectation
- Quarterly revenue should reach the $42.6M-plus estimate range and stay above $44M over the next 12 months.
CounterThe next-quarter estimate of $42.6M is below the latest $44.0M, so growth may flatten as acquisitions slow.
The $12.01 price equals the $12.01 analyst target, so there is no remaining analyst upside against 5.4% downside to the stop.
→StableUpside pct
- Expectation
- Further gains require analysts to raise targets above $13 as funds from operations grow.
CounterLight coverage means targets can lag, and a rising on-balance volume reading with price above the 200-day average shows buyers are still active.
Leverage carries a 1.5-point penalty (D/E 2.6) and dividend safety scores only 4.8 with a yield-trap warning, which puts the payout at risk if rates stay high.
→StableBear case
- Expectation
- Dividend safety should rise above 6.0 and debt-to-equity should fall below 2.0 over the next 12 months.
CounterExcellent cash conversion and revenue growth should cover the distribution, so the yield-trap warning may overstate the risk.
EPS beat in 2 of the last 4 quarters but missed in May (-21.9%) and with several earlier misses, so delivery is uneven despite a +51.4% average surprise.
→StableAvg surprise pct
- Expectation
- EPS should meet or beat the estimate at the 2026-11-03 report and stay at or above $0.05.
CounterEPS of $0.04 to $0.08 is tiny, so percentage surprises swing widely on small dollar differences.
Per-dimension breakdown
Quality
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.4 |
| ROA | 2.3 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 7.3 |
| Current ratio | 6.4 |
| FCF quality | 10.0 |
| Moat | 6.4 |
| Rule of 40 | 8.5 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 282% FCF/NI
- ▸Rule of 40: 52 (pass)
- ▸Strong Piotroski F-Score: 8/9
Growth
7.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.3 |
| EPS growth | 10.0 |
Momentum
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 2.6 |
| OBV | 1.0 |
| MA position | 2.2 |
| Volume | 5.1 |
- ▸Capitulation risk (RSI 30, below 200MA)
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA but MA still rising (+3.1%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 8.0 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 23%
Insider
6.1/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 6.2 |
| notable moves | 7.0 |
- ▸Negligible insider buying — $2,560 (0.000% of mkt cap)
Peer rank
4.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.2 |
| quality rank | 5.4 |
| growth rank | 6.9 |
Technical
9.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 9.8 |
| support resistance | 9.8 |
| 52w position | 7.6 |
Risk (lower is worse)
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.4 |
| days to cover | 0.7 |
| volatility | 5.1 |
| put call | 6.7 |
| beta | 6.7 |
| debt equity | 2.4 |
Catalyst
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 4.8 |
- ▸Earnings in 5 days
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (4)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:2.8<4.5
- ASYMMETRY:0.8<1.5@spot
- EARNINGS_PROXIMITY:5d<=7d
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.78
Upside
+4.6%
Downside
5.9%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $0.6B<$5B
Investment implication
The F-path SELL output reflects an overall score of 3.5 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Technical at 9.1) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:2.8<4.5, ASYMMETRY:0.8<1.5@spot, EARNINGS_PROXIMITY:5d<=7d) reinforce the read. Current asymmetry R:R is 0.78 — supplementary context, not the trigger for this path.
The strongest dimensions are Technical at 9.1, Growth at 7.7, and Quality at 7.2; the weakest are Momentum at 2.8, Peer rank at 4.1, and Risk (lower is worse) at 4.5. The V9 engine flagged 3 failed gates with 1 warning, producing an asymmetric reward-to-risk of 0.78 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Excellent Cash Conversion
Trip ifQuality score falls below 5.0 from the current 7.2.
- P2Steady Revenue Growth
Trip ifQuarterly revenue falls below $40M from the latest $44.0M.
- P3Price At Analyst Target
Trip ifPrice falls below $11.37, the stop level, from the current $12.01.
- P4Leverage And Dividend Risk
Trip ifDebt-to-equity exceeds 3.5 from the current 2.6.
- P5Inconsistent Earnings Delivery
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.