Value
3.1/10data confidence 50%| Component | Sub-score |
|---|---|
| P/S | 3.6 |
| Fwd P/E | 1.0 |
| PEG | 4.5 |
- ▸Forward P/E: 168.5x
- ▸PEG: 2.02
TRC · Why this verdict
Why Tejon Ranch (TRC) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.4/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The stock trades expensively on a forward basis, with a forward P/E of 171.5x flagged as an expensive valuation in the scoring notes. Valuation breakdown | Forward P/E should compress below 40x over the next 12 months as earnings catch up or the price corrects. | →Stable |
| CounterA land-development and ranch-holding company's forward P/E can look distorted by lumpy near-term earnings unrelated to the value of its real estate assets. | ||
The quality notes flag an earnings-quality red flag with free cash flow at -732% of net income, indicating a significant disconnect between reported earnings and cash generation. Quality breakdown | The FCF-to-net-income ratio should rise above 50% over the next 12 months, signaling earnings are backed by real cash generation. | →Stable |
| CounterLand and real-estate companies often show volatile FCF/NI ratios tied to development timing rather than deteriorating earnings quality. | ||
The company posts a strong Piotroski F-Score of 7 out of 9, indicating fundamentally sound balance sheet and profitability trends. Quality breakdown | The Piotroski F-Score should stay at or above 7 out of 9 over the next 12 months, confirming durable fundamental strength. | →Stable |
| CounterA high Piotroski score is a backward-looking snapshot and doesn't account for the rich valuation already priced into the shares. | ||
The engine identifies no clear trading edge for the setup, reflected in the NO_EDGE classification despite passing momentum and asymmetry gates. Edge rationale | A distinct catalyst or structural edge type should emerge over the next 12 months, replacing the current no-edge classification. | →Stable |
| CounterThe absence of a labeled edge doesn't mean the stock lacks merit; it may simply reflect the engine's inability to categorize a diversified land-holding business. | ||
The stock trades expensively on a forward basis, with a forward P/E of 171.5x flagged as an expensive valuation in the scoring notes.
→StableValuation breakdown
- Expectation
- Forward P/E should compress below 40x over the next 12 months as earnings catch up or the price corrects.
CounterA land-development and ranch-holding company's forward P/E can look distorted by lumpy near-term earnings unrelated to the value of its real estate assets.
The quality notes flag an earnings-quality red flag with free cash flow at -732% of net income, indicating a significant disconnect between reported earnings and cash generation.
→StableQuality breakdown
- Expectation
- The FCF-to-net-income ratio should rise above 50% over the next 12 months, signaling earnings are backed by real cash generation.
CounterLand and real-estate companies often show volatile FCF/NI ratios tied to development timing rather than deteriorating earnings quality.
The company posts a strong Piotroski F-Score of 7 out of 9, indicating fundamentally sound balance sheet and profitability trends.
→StableQuality breakdown
- Expectation
- The Piotroski F-Score should stay at or above 7 out of 9 over the next 12 months, confirming durable fundamental strength.
CounterA high Piotroski score is a backward-looking snapshot and doesn't account for the rich valuation already priced into the shares.
The engine identifies no clear trading edge for the setup, reflected in the NO_EDGE classification despite passing momentum and asymmetry gates.
→StableEdge rationale
- Expectation
- A distinct catalyst or structural edge type should emerge over the next 12 months, replacing the current no-edge classification.
CounterThe absence of a labeled edge doesn't mean the stock lacks merit; it may simply reflect the engine's inability to categorize a diversified land-holding business.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Tejon Ranch shows a strong Piotroski F-Score and solid growth, but rich valuation, weak quality composite, and an earnings-quality red flag on cash conversion argue for caution despite favorable momentum.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.1 |
| ROA | 0.0 |
| Gross margin | 0.0 |
| Op margin | 0.0 |
| Net margin | 1.7 |
| Current ratio | 9.3 |
| FCF quality | 0.0 |
| Moat | 6.4 |
| Piotroski F | 7.8 |
- ▸Earnings quality RED FLAG: -732% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
- ▸Quality concerns
Growth
8.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 6.5 |
| EPS growth | 10.0 |
Momentum
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 7.7 |
| MACD | 3.4 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 4.1 |
- ▸Uptrend pullback (RSI 38) - buy opportunity
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
7.4/10data confidence 67%| Component | Sub-score |
|---|---|
| Analyst rating | 5.9 |
| Price target | 9.3 |
- ▸Light analyst coverage (1.0) — signal dampened
- ▸Analyst upside: 43%
Insider
5.5/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 6.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 0.3 |
| quality rank | 2.5 |
| growth rank | 7.2 |
- ▸Conservative debt levels
Technical
8.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.5 |
| support resistance | 8.8 |
| 52w position | 7.2 |
Risk (lower is worse)
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.1 |
| days to cover | 0.0 |
| volatility | 6.6 |
| put call | 10.0 |
| implied vol | 3.3 |
| beta | 9.4 |
| debt equity | 9.2 |
- ▸High IV: 60%
Catalyst
6.9/10data confidence 75%| Component | Sub-score |
|---|---|
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (7)
- ASYMMETRY:4.4>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:29d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- MOMENTUM:4.0<4.5
Warning (0)
none
Reward-to-Risk
4.37
Upside
+21.9%
Downside
5.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $0.5B<$5B
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Growth at 8.2 could not lift the engine output above the verdict floor. Failed gate signal: MOMENTUM:4.0<4.5.
The strongest dimensions are Growth at 8.2, Technical at 8.2, and Sentiment at 7.4; the weakest are Quality at 2.8, Value at 3.1, and Momentum at 4.0. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 4.37 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Rich Forward Valuation
Trip ifForward P/E compresses below 40x, down sharply from the current 171.5x.
- P2Earnings Quality Red Flag
Trip ifFree cash flow to net income ratio rises above 50%, reversing the current -732% reading.
- P3Strong Piotroski Fundamentals
Trip ifPiotroski F-Score falls below 5 out of 9, dropping from the current 7.
- P4No Clear Trading Edge
Trip ifAsymmetry ratio falls below 1.5, dropping from the current 3.56 and confirming no tradable edge exists.