LAND
Gladstone Land Corporation
$9.63
Real Estate Investment Trust
85%
P/FFO × Specialty REIT Multiple
Strong
·
Conviction
Undervalued
Trading 55.1% below fair value
You pay
$9.63
Bear
$17.50
Fair
$21.43
Bull
$25.36
Bear
$17.50
+81.7%
$1.11 FFO × 23x
Fair
$21.43
+122.6%
$1.11 FFO × 29x
Bull
$25.36
+163.4%
$1.11 FFO × 34x
Key Value Driver
FFO/share ($1.11) × specialty P/FFO multiple
Implied Market Multiple
8.6x
Summary
Our base-case estimate uses P/FFO × Specialty REIT Multiple. We then blend that result with the average analyst price target of $13.33 from 11 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $21.43 per share.
Warnings
Standard profit figures are misleading for real estate companies — large non-cash accounting charges make profits look artificially low. Dividend yield and funds from operations are better measures.
The 1.9% yield is low for a real estate company — investors are paying up because they expect above-average growth.
Dividend-based valuation: $3.48 (85% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $13.33 (from 11 analysts). Our estimate is 76% above the consensus -- consider that gap carefully.
Key Risks
- P/E and EV/EBITDA are structurally wrong for REITs — use P/FFO and NAV
- Interest rate sensitivity: REIT multiples compress when rates rise
- FFO approximation (NI + D&A) may include gains on property sales — verify