One-glance verdict
Overvalued
$3.14 our estimate vs market $8.43
Wall Street consensus: $10.50 (233.9% higher than our fair-value estimate)
168% above our estimate, beyond the bull case
Fundamentals snapshot
Farmland Partners Inc.
FPI · NYQ · Real Estate · REIT - Specialty
Current price
$8.43
52-week range
$8.35 - $13.22
Market cap
$370.28M
Balance sheet
Stretched
2.39x Stretched
Net debt $231.48M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Returns 2.0% on equity, ahead of 40% of its peers.
- Reward Free cash flow was positive in 4/10 years.
- Risk Stock trades 75.1% above its 5-year average P/E.
- Risk Operating margin compressed from 41.0% to -4.8% over 3 years.
What this company does
Farmland Partners Inc.
Farmland Partners Inc. is like a landlord for farms, owning and renting out large areas of farmland across North America. The money they make primarily comes from rent paid by farmers who use their land, which is a steady stream of income similar to recurring revenue (money that comes in regularly). This matters because it shows how reliably the company can generate income to pay its bills and potentially grow.
How the company got here
Farmland Partners Inc. was established in 2013 with the goal of owning and acquiring high-quality farmland across North America. The company went public in 2014 and elected to be taxed as a Real Estate Investment Trust (REIT). A REIT is a company that owns, operates, or finances income-generating real estate, allowing it to avoid corporate income tax if it distributes most of its taxable income to shareholders as dividends. This structure is common for companies focused on real estate investments. Farmland Partners has since grown its portfolio of owned farmland across multiple states and also diversified into owning agricultural equipment dealership properties.
What it actually does
Farmland Partners Inc. is essentially a landlord for farmers, owning large tracts of agricultural land and leasing it out to them. Think of it like owning an apartment building, but instead of renting to people, they rent to farmers who grow crops. They also provide loans to farmers, using farmland as collateral, which is like a mortgage for agricultural properties. In addition to land, they own buildings used by agricultural equipment dealerships, which they then lease to businesses that sell farm machinery.
Farming Land Leases
This is the core business for Farmland Partners. The company owns vast amounts of farmland, primarily in the United States, and leases these acres to farmers. These farmers pay rent to Farmland Partners for the use of the land to grow their crops. This segment represents the largest portion of the company's revenue, as it's the primary way they generate income from their real estate holdings. The leases provide a steady stream of income for the company, similar to how a landlord receives rent payments.
Farm Loans
Beyond just leasing land, Farmland Partners also acts as a lender to farmers and landowners. They offer loans that are secured by farm real estate or other agricultural assets. This means if a farmer can't repay the loan, Farmland Partners has a claim on the property. This business line provides an additional revenue stream through interest payments on the loans and diversifies the company's income sources beyond just rental payments.
Agricultural Equipment Dealerships
Farmland Partners owns the physical properties (land and buildings) for four agricultural equipment dealerships in Ohio. These dealerships are then leased to a company that operates them under the John Deere brand, a well-known manufacturer of agricultural machinery. This segment is a smaller part of the overall business but provides another source of rental income for the company, similar to their farmland leasing operations.
What management is betting on now
Management is focused on growing the company's portfolio of high-quality farmland through acquisitions, aiming to increase the amount of land they own and lease out. They are also looking to expand their lending activities to farmers, providing capital for agricultural operations. A key strategy involves acquiring land in regions with strong agricultural economies and seeking opportunities to add value through efficient management and potentially developing properties. The goal is to increase rental income and loan interest, ultimately boosting the company's profitability and shareholder returns.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
Revenue
$9.78M
Net income
$-15.41M
Diluted EPS
-0.36
Operating cash flow
$-2.28M
Free cash flow
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Revenue
$9.40M
Net income
$3.11M
Diluted EPS
0.07
Operating cash flow
$-3.07M
Free cash flow
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Sources
Revenue
$10.10M
Net income
$640.00K
Diluted EPS
0.01
Operating cash flow
$8.25M
Free cash flow
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Sources
Revenue
$20.71M
Net income
$21.42M
Diluted EPS
0.44
Operating cash flow
$15.19M
Free cash flow
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Revenue
$11.25M
Net income
$483.00K
Diluted EPS
0.00
Operating cash flow
$-1.95M
Free cash flow
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Revenue
$9.96M
Net income
$7.60M
Diluted EPS
0.14
Operating cash flow
$-2.18M
Free cash flow
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Revenue
$10.25M
Net income
$2.04M
Diluted EPS
0.03
Operating cash flow
$6.37M
Free cash flow
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Revenue
$21.47M
Net income
$58.75M
Diluted EPS
1.04
Operating cash flow
$14.61M
Free cash flow
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Is it cheap or expensive?
Fair value $3.14 vs current price $8.43
Wall Street consensus is the average analyst price target: $10.50 (233.9% higher than our fair-value estimate).
Our most-likely fair value is $3.14 a share — about 62.7% below today's price of $8.43, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Stretched
Net debt $231.5M. Interest coverage 2.4x.
Net debt
$231.48M
Interest coverage
2.39x
Farmland Partners Inc.'s profit covers its interest bill about 2.4 times over. which is stronger than every peer shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Stretched
Worse cushion
Baseline
Better cushion
FPI
BASELINE
Farmland Partners Inc.
Total debt $239.36M Interest coverage 2.39x This is the baseline the peer rows are being compared against.
Total debt $486.76M Interest coverage 1.23x -49% vs FPI Carries about 2.0x less debt cushion than FPI.
Total debt $11.10B Interest coverage 0.80x -67% vs FPI Carries about 3.0x less debt cushion than FPI.
Total debt $384.28M Interest coverage 2.21x -8% vs FPI Has roughly the same debt cushion as FPI.
Total debt $19.65M Interest coverage -0.20x -100% vs FPI This peer has almost no interest-payment cushion compared with FPI.
Total debt $4.66B Interest coverage 1.51x -37% vs FPI Carries about 1.6x less debt cushion than FPI.
What you should know
The case for and against FPI
3 Rewards
2 Risks
Rewards
-
Returns 2.0% on equity, ahead of 40% of its peers.
-
Free cash flow was positive in 4/10 years.
-
Dividend yield is 4.1% with 13-year payout history.
Risks
-
Stock trades 75.1% above its 5-year average P/E.
-
Operating margin compressed from 41.0% to -4.8% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
56.20x
Forward P/E
35.13x
P/B
0.83x
P/S
7.46x
EV/EBITDA
27.12x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
82.2%
Operating margin
-4.8%
Net margin
19.7%
ROE
2.0%
ROA
1.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.56x
Current ratio
6.92x
Quick ratio
1.16x
Total debt
$239.36M
Total cash
$7.88M
Growth
How the business has been compounding
Revenue TTM
$49.99M
Revenue 5Y CAGR
0.2%
EPS TTM
0.15
EPS 5Y CAGR
56.2%
Cash flow
How much cash the business throws off
Operating CF TTM
$18.09M
Free CF TTM
$17.43M
FCF margin
34.9%
Dividend
Shareholder payout
Yield
4.1%
Payout ratio
58.8%
Last ex-div date
2027-01-04