Value
4.1/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 4.2 |
| EV/EBITDA | 1.7 |
| p ocf | 6.7 |
| Analyst target | 4.0 |
- ▸P/OCF: 16.0x (FFO proxy — REITs gated off P/E)
STAG · Why this verdict
Why Stag Industrial (STAG) 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 score5.1/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Stag Industrial earns a Rule of 40 score of 62 and converts 187% of net income into free cash flow, reflecting elite industrial REIT cash economics, but the stock is trading above its analyst consensus price target with no near-term upside and an unfavorable reward-to-risk ratio.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Stag Industrial achieves a Rule of 40 score of 62 — well above the 40 threshold — and a free cash flow conversion rate of 187% of net income, indicating high-quality recurring cash generation relative to its revenue growth rate. Quality breakdown | Free cash flow conversion remains above 150% and the Rule of 40 score stays above 50 over the next 4 reported quarters, confirming durable cash economics. | →Stable |
| CounterIndustrial REITs trade on funds from operations rather than GAAP net income; the high free-cash-flow-to-net-income ratio reflects depreciation accounting rather than economic superiority over peers. | ||
Stag has beaten or met FFO per share estimates in 3 of the last 4 quarters with an average positive surprise of 8.5%, including a notable 25.3% beat in the July 2025 quarter. Earnings | Stag beats FFO consensus estimates by at least 2% in at least 3 of the next 4 quarters as occupancy and rent escalation support operating results. | →Stable |
| CounterIndustrial real estate fundamentals are normalizing after a post-pandemic surge in demand, and rent escalation may slow as lease renewals reflect a more balanced supply and demand environment. | ||
The portfolio is entirely concentrated in industrial properties, leaving the trust with no diversification buffer if industrial real estate demand decelerates or new supply pressures rents in key markets. Bear case | Occupancy rates remain above 95% and same-store net operating income growth exceeds 3% year-over-year across reported quarters over the next 12 months. | →Stable |
| CounterE-commerce and supply chain reshoring continue to drive strong structural demand for industrial space, and the single-property-type focus allows management to be a more disciplined capital allocator. | ||
Stag currently trades above its near-term resistance level, with indicated upside of approximately negative 1%, a reward-to-risk ratio of negative 0.25, and a price above all key analyst target levels. Targets | Analyst consensus price target is raised above $43, more than 11% above the current price of $38.52, driven by FFO upgrades or asset value appreciation over 12 months. | →Stable |
| CounterTrading above analyst targets with declining OBV suggests institutional selling into strength; without an upgrade catalyst the stock may retrace toward the $37 support level. | ||
Stag Industrial achieves a Rule of 40 score of 62 — well above the 40 threshold — and a free cash flow conversion rate of 187% of net income, indicating high-quality recurring cash generation relative to its revenue growth rate.
→StableQuality breakdown
- Expectation
- Free cash flow conversion remains above 150% and the Rule of 40 score stays above 50 over the next 4 reported quarters, confirming durable cash economics.
CounterIndustrial REITs trade on funds from operations rather than GAAP net income; the high free-cash-flow-to-net-income ratio reflects depreciation accounting rather than economic superiority over peers.
Stag has beaten or met FFO per share estimates in 3 of the last 4 quarters with an average positive surprise of 8.5%, including a notable 25.3% beat in the July 2025 quarter.
→StableEarnings
- Expectation
- Stag beats FFO consensus estimates by at least 2% in at least 3 of the next 4 quarters as occupancy and rent escalation support operating results.
CounterIndustrial real estate fundamentals are normalizing after a post-pandemic surge in demand, and rent escalation may slow as lease renewals reflect a more balanced supply and demand environment.
The portfolio is entirely concentrated in industrial properties, leaving the trust with no diversification buffer if industrial real estate demand decelerates or new supply pressures rents in key markets.
→StableBear case
- Expectation
- Occupancy rates remain above 95% and same-store net operating income growth exceeds 3% year-over-year across reported quarters over the next 12 months.
CounterE-commerce and supply chain reshoring continue to drive strong structural demand for industrial space, and the single-property-type focus allows management to be a more disciplined capital allocator.
Stag currently trades above its near-term resistance level, with indicated upside of approximately negative 1%, a reward-to-risk ratio of negative 0.25, and a price above all key analyst target levels.
→StableTargets
- Expectation
- Analyst consensus price target is raised above $43, more than 11% above the current price of $38.52, driven by FFO upgrades or asset value appreciation over 12 months.
CounterTrading above analyst targets with declining OBV suggests institutional selling into strength; without an upgrade catalyst the stock may retrace toward the $37 support level.
Per-dimension breakdown
Quality
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.3 |
| ROA | 1.9 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 5.9 |
| FCF quality | 10.0 |
| Moat | 5.8 |
| Rule of 40 | 9.5 |
| Piotroski F | 7.8 |
- ▸Strong margins: 28%
- ▸Excellent cash conversion: 187% FCF/NI
- ▸Rule of 40: 62 (elite)
- ▸Strong Piotroski F-Score: 7/9
Growth
2.4/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.8 |
| EPS growth | 0.0 |
Momentum
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.4 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Overbought (RSI 71)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.0 |
| Price target | 5.8 |
| erm sentiment | 5.0 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
5.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.4 |
| quality rank | 5.0 |
| growth rank | 6.0 |
Technical
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.6 |
| support resistance | 0.1 |
| 52w position | 9.7 |
Risk (lower is worse)
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.9 |
| days to cover | 5.6 |
| volatility | 7.6 |
| put call | 0.0 |
| implied vol | 5.0 |
| beta | 7.1 |
| debt equity | 5.7 |
- ▸Elevated put/call: 7.75
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 6.7 |
| dividend safety | 3.5 |
- ▸Strong earnings: 3B/0M
- ▸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 (7)
- MOMENTUM:6.7>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:33d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-1.0=NEGATIVE
Warning (0)
none
Reward-to-Risk
-1.04
Upside
-8.3%
Downside
8.0%
Sizing output
AVOID
SetupUNKNOWN — No clear chart pattern; technical signals are mixed
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.1 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Quality at 7.3) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-1.0=NEGATIVE) reinforce the read. Current asymmetry R:R is -1.04 — supplementary context, not the trigger for this path.
The strongest dimensions are Quality at 7.3, Momentum at 6.7, and Sentiment at 6.1; the weakest are Growth at 2.4, Technical at 3.5, and Value at 4.1. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -1.04 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Stag Industrial achieves a Rule of 40 score of 62 — well above the 40 threshold — and a free cash flow conversion rate of 187% of net income, indicating high-quality recurring cash generation relative to its revenue growth rate.
Trip ifFree cash flow conversion falls below 100% of net income for 2 consecutive quarters, dropping more than 87 percentage points from the current 187% level.
- P2Stag has beaten or met FFO per share estimates in 3 of the last 4 quarters with an average positive surprise of 8.5%, including a notable 25.3% beat in the July 2025 quarter.
Trip ifFFO per share surprise falls below -3% in at least 2 of the next 4 quarters, indicating operating results are disappointing relative to expectations.
- P3The portfolio is entirely concentrated in industrial properties, leaving the trust with no diversification buffer if industrial real estate demand decelerates or new supply pressures rents in key markets.
Trip ifOccupancy rate falls below 95% for any reported quarter over the next 12 months, signaling industrial demand is softening.
- P4Stag currently trades above its near-term resistance level, with indicated upside of approximately negative 1%, a reward-to-risk ratio of negative 0.25, and a price above all key analyst target levels.
Trip ifStock price drops below $36, more than 6% below the current $38.52, without an analyst price target upgrade above $40 within 60 days.