Value
3.1/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 0.6 |
| EV/EBITDA | 0.0 |
| p ocf | 4.5 |
| Analyst target | 4.0 |
- ▸P/OCF: 25.4x (FFO proxy — REITs gated off P/E)
TRNO · Why this verdict
Why Terreno Realty (TRNO) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.8/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Terreno Realty Corporation is a high-quality industrial REIT with best-in-class 87% margins and strong growth credentials, but with the stock trading near its 52-week high above analyst targets, the near-term risk/reward is unfavorable despite the fundamentally compelling business.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
With 80.5% of properties concentrated in warehouse and distribution assets, Terreno is highly exposed to any structural shift in last-mile e-commerce demand, nearshoring supply chain changes, or new industrial supply buildout that could affect occupancy and rental rates in its core property type. Bear case | Occupancy rates across the portfolio remain above 95% and average rental rate growth on lease renewals exceeds 10% over the next four reported periods, confirming that concentration in warehouse assets is generating premium returns rather than risk. | →Stable |
| CounterWarehouse concentration in infill coastal locations is a deliberate strategy with high barriers to new supply; the risk label may overstate exposure in markets where land scarcity protects existing operators. | ||
Terreno's P/OCF of 25.9x — used as a funds from operations proxy for REIT valuation — places it at a premium to many industrial peers, and with the stock already 1.7% below the 52-week high and trading above analyst price targets, there is limited near-term price appreciation potential at current entry levels. Valuation breakdown | Analyst consensus price targets rise at least 8% above the current price of $66.71 within 12 months, restoring a meaningful margin of safety for new investors. | →Stable |
| CounterPremium REIT valuations in high-quality industrial properties with coastal exposure have historically been sustained by institutional demand; the current stretch above analyst targets may reflect market anticipation of higher targets rather than mispricing. | ||
Terreno earns a wide economic moat score and delivers 87% gross margins, a strong Piotroski score of 7/9, and a Rule of 40 score of 59 — all placing it in the best-in-class tier among industrial REIT peers and supporting a premium operating quality narrative. Quality breakdown | Gross margins remain above 80% and the Piotroski score stays at 7/9 or above over the next four quarters, confirming that operational quality is structurally embedded rather than cyclically elevated. | →Stable |
| CounterIndustrial REIT margins are highly sensitive to rent roll timing and lease renewals; the 80.5% concentration in warehouse/distribution properties means that a softening in e-commerce demand or excess industrial supply in key markets could compress margins materially. | ||
Terreno scores in the best-in-class growth tier among REIT peers, reflecting strong earnings and revenue expansion consistent with a growing industrial real estate footprint in high-barrier coastal markets. Growth | Earnings growth continues at a pace that keeps the growth score above 7.0 out of 10 over the next four quarters, driven by lease renewals at higher rates and occupancy improvements. | →Stable |
| CounterHigh growth rates in industrial REITs have attracted significant capital investment in new supply, which in markets where Terreno operates could put pressure on renewal rates and slow the earnings growth trajectory. | ||
With 80.5% of properties concentrated in warehouse and distribution assets, Terreno is highly exposed to any structural shift in last-mile e-commerce demand, nearshoring supply chain changes, or new industrial supply buildout that could affect occupancy and rental rates in its core property type.
→StableBear case
- Expectation
- Occupancy rates across the portfolio remain above 95% and average rental rate growth on lease renewals exceeds 10% over the next four reported periods, confirming that concentration in warehouse assets is generating premium returns rather than risk.
CounterWarehouse concentration in infill coastal locations is a deliberate strategy with high barriers to new supply; the risk label may overstate exposure in markets where land scarcity protects existing operators.
Terreno's P/OCF of 25.9x — used as a funds from operations proxy for REIT valuation — places it at a premium to many industrial peers, and with the stock already 1.7% below the 52-week high and trading above analyst price targets, there is limited near-term price appreciation potential at current entry levels.
→StableValuation breakdown
- Expectation
- Analyst consensus price targets rise at least 8% above the current price of $66.71 within 12 months, restoring a meaningful margin of safety for new investors.
CounterPremium REIT valuations in high-quality industrial properties with coastal exposure have historically been sustained by institutional demand; the current stretch above analyst targets may reflect market anticipation of higher targets rather than mispricing.
Terreno earns a wide economic moat score and delivers 87% gross margins, a strong Piotroski score of 7/9, and a Rule of 40 score of 59 — all placing it in the best-in-class tier among industrial REIT peers and supporting a premium operating quality narrative.
→StableQuality breakdown
- Expectation
- Gross margins remain above 80% and the Piotroski score stays at 7/9 or above over the next four quarters, confirming that operational quality is structurally embedded rather than cyclically elevated.
CounterIndustrial REIT margins are highly sensitive to rent roll timing and lease renewals; the 80.5% concentration in warehouse/distribution properties means that a softening in e-commerce demand or excess industrial supply in key markets could compress margins materially.
Terreno scores in the best-in-class growth tier among REIT peers, reflecting strong earnings and revenue expansion consistent with a growing industrial real estate footprint in high-barrier coastal markets.
→StableGrowth
- Expectation
- Earnings growth continues at a pace that keeps the growth score above 7.0 out of 10 over the next four quarters, driven by lease renewals at higher rates and occupancy improvements.
CounterHigh growth rates in industrial REITs have attracted significant capital investment in new supply, which in markets where Terreno operates could put pressure on renewal rates and slow the earnings growth trajectory.
Per-dimension breakdown
Quality
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.5 |
| ROA | 1.6 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 3.7 |
| FCF quality | 4.2 |
| Moat | 7.9 |
| Rule of 40 | 9.3 |
| Piotroski F | 7.8 |
- ▸Strong margins: 87%
- ▸Earnings quality warning: 53% FCF/NI
- ▸Wide economic moat
- ▸Rule of 40: 59 (pass)
Growth
7.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.7 |
| EPS growth | 10.0 |
Momentum
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 2.3 |
| OBV | 10.0 |
| MA position | 4.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.4 |
| Price target | 6.2 |
| 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
6.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.6 |
| quality rank | 8.3 |
| growth rank | 8.0 |
- ▸Attractive P/E vs peers
- ▸Best-in-class margins
Technical
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 6.0 |
| support resistance | 6.4 |
| 52w position | 9.1 |
Risk (lower is worse)
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.5 |
| days to cover | 2.5 |
| volatility | 6.2 |
| put call | 10.0 |
| implied vol | 6.0 |
| beta | 6.7 |
| debt equity | 9.1 |
- ▸Concentration risks: 1 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 4.1 |
| dividend safety | 6.5 |
- ▸Dividend: 318.0%
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:41d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:4.4<4.5
- ASYMMETRY:-0.5=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.54
Upside
-2.8%
Downside
5.1%
Sizing output
AVOID
SetupRANGE_BOUND — RSI 51 mid-range, Bollinger mid-band
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: INSIDER:OK. Top dim: Growth at 7.8; weakest: Value at 3.1. No conviction either direction.
The strongest dimensions are Growth at 7.8, Technical at 7.2, and Quality at 6.8; the weakest are Value at 3.1, Momentum at 4.4, and Insider at 5.0. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.54 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Terreno earns a wide economic moat score and delivers 87% gross margins, a strong Piotroski score of 7/9, and a Rule of 40 score of 59 — all placing it in the best-in-class tier among industrial REIT peers and supporting a premium operating quality narrative.
Trip ifGross margin falls below 75% for 2 or more consecutive reported quarters, signaling structural deterioration in the premium operating profile.
- P2Terreno scores in the best-in-class growth tier among REIT peers, reflecting strong earnings and revenue expansion consistent with a growing industrial real estate footprint in high-barrier coastal markets.
Trip ifGrowth score falls below 5.0 out of 10 in the next annual review, indicating that the strong earnings growth trajectory has materially decelerated.
- P3Terreno's P/OCF of 25.9x — used as a funds from operations proxy for REIT valuation — places it at a premium to many industrial peers, and with the stock already 1.7% below the 52-week high and trading above analyst price targets, there is limited near-term price appreciation potential at current entry levels.
Trip ifStock price rises above $72 without a corresponding analyst target increase, indicating valuation stretch is increasing rather than resolving.
- P4With 80.5% of properties concentrated in warehouse and distribution assets, Terreno is highly exposed to any structural shift in last-mile e-commerce demand, nearshoring supply chain changes, or new industrial supply buildout that could affect occupancy and rental rates in its core property type.
Trip ifPortfolio occupancy drops below 93% in any reported quarter, suggesting warehouse demand softness is beginning to affect Terreno's premium concentrated asset base.