Value
7.4/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 8.6 |
| P/S | 6.3 |
| Fwd P/E | 9.3 |
| PEG | 8.6 |
| Analyst target | 4.0 |
- ▸Forward P/E: 9.6x
- ▸PEG: 0.73
- ▸Attractively valued
AGM · Why this verdict
Why Federal Agricultural Mortgage C (AGM) 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 score6.2/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Federal Agricultural Mortgage offers a high-quality credit services franchise trading at 8.6x forward earnings, but with only 1.8% headroom to the analyst consensus and a reward-to-risk ratio of 0.28 to 1, the geometry does not support new capital; extreme counterparty concentration — the top three AgVantage issuers representing over 90% of that segment — and a mixed earnings track record add further caution.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Operating margins of 56% and a Piotroski F-Score of 8/9 indicate a structurally sound credit services business with strong balance sheet health and best-in-class margins within its peer group — characteristics that should support earnings stability across credit cycles. Quality breakdown | Margins sustain above 50% and the Piotroski score holds at 7+/9 over the next four quarters, confirming that the quality franchise is durable. | →Stable |
| CounterEarnings missed in two of the last four quarters with an average surprise of -3.7%; the most recent quarter's beat of 6.7% followed two consecutive misses, making the reliability of income generation less predictable than headline margins suggest. | ||
At a forward P/E of 8.6x and a PEG of 0.84, the stock screens attractively valued on fundamentals — but with just 1.8% headroom to the $186.72 analyst consensus target, the valuation discount has largely played out and the risk/reward of 0.28 to 1 does not support a new position. Bear case | For the investment case to reset favorably, analyst targets would need to be raised materially, restoring at least 10% upside from current price levels. | ↓Deteriorating |
| CounterA golden cross setup with price above all moving averages and a bullish MACD indicates constructive momentum; if earnings consistently beat going forward, analyst targets could be revised higher quickly, reopening the upside case. | ||
The top 10 agricultural finance institutions represent 55% of business, and the top three AgVantage issuers account for over 90% of that segment — a degree of concentration that creates meaningful single-event tail risk if any major counterparty reduces engagement or faces credit stress. Bear case | Top-10 customer concentration declines below 50% as reported in the next annual filing, demonstrating active diversification of the counterparty base. | ↓Deteriorating |
| CounterAgricultural finance is a specialized niche where deep relationships with a concentrated set of institutions are inherent to the market structure; if these relationships are long-standing and stable, the concentration may represent durable franchise economics rather than elevated credit risk. | ||
After an initial beat in the oldest reported quarter, the company posted two consecutive misses before returning to a beat in the most recent period; an average negative surprise of -3.7% over the trailing four quarters signals an inconsistent track record that undermines confidence in forward estimates. Earnings | EPS surprises stay positive for 2 consecutive quarters, establishing a trend of reliable delivery that rebuilds confidence in guidance accuracy. | →Stable |
| CounterThe most recent quarter's beat of 6.7% was the strongest in the four-period window, and a leadership change flagged in a recent filing may bring improved guidance discipline that makes forward estimates more consistently achievable. | ||
Operating margins of 56% and a Piotroski F-Score of 8/9 indicate a structurally sound credit services business with strong balance sheet health and best-in-class margins within its peer group — characteristics that should support earnings stability across credit cycles.
→StableQuality breakdown
- Expectation
- Margins sustain above 50% and the Piotroski score holds at 7+/9 over the next four quarters, confirming that the quality franchise is durable.
CounterEarnings missed in two of the last four quarters with an average surprise of -3.7%; the most recent quarter's beat of 6.7% followed two consecutive misses, making the reliability of income generation less predictable than headline margins suggest.
At a forward P/E of 8.6x and a PEG of 0.84, the stock screens attractively valued on fundamentals — but with just 1.8% headroom to the $186.72 analyst consensus target, the valuation discount has largely played out and the risk/reward of 0.28 to 1 does not support a new position.
↓DeterioratingBear case
- Expectation
- For the investment case to reset favorably, analyst targets would need to be raised materially, restoring at least 10% upside from current price levels.
CounterA golden cross setup with price above all moving averages and a bullish MACD indicates constructive momentum; if earnings consistently beat going forward, analyst targets could be revised higher quickly, reopening the upside case.
The top 10 agricultural finance institutions represent 55% of business, and the top three AgVantage issuers account for over 90% of that segment — a degree of concentration that creates meaningful single-event tail risk if any major counterparty reduces engagement or faces credit stress.
↓DeterioratingBear case
- Expectation
- Top-10 customer concentration declines below 50% as reported in the next annual filing, demonstrating active diversification of the counterparty base.
CounterAgricultural finance is a specialized niche where deep relationships with a concentrated set of institutions are inherent to the market structure; if these relationships are long-standing and stable, the concentration may represent durable franchise economics rather than elevated credit risk.
After an initial beat in the oldest reported quarter, the company posted two consecutive misses before returning to a beat in the most recent period; an average negative surprise of -3.7% over the trailing four quarters signals an inconsistent track record that undermines confidence in forward estimates.
→StableEarnings
- Expectation
- EPS surprises stay positive for 2 consecutive quarters, establishing a trend of reliable delivery that rebuilds confidence in guidance accuracy.
CounterThe most recent quarter's beat of 6.7% was the strongest in the four-period window, and a leadership change flagged in a recent filing may bring improved guidance discipline that makes forward estimates more consistently achievable.
Per-dimension breakdown
Quality
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.5 |
| ROA | 0.4 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 5.5 |
| Moat | 6.9 |
| Piotroski F | 7.8 |
- ▸Strong margins: 56%
- ▸Strong Piotroski F-Score: 7/9
Growth
7.4/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 8.7 |
| EPS growth | 6.2 |
- ▸Strong growth: 25% YoY
Momentum
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 7.7 |
| MACD | 0.0 |
| OBV | 6.6 |
| MA position | 6.0 |
| Volume | 2.3 |
- ▸Uptrend pullback (RSI 38) - buy opportunity
- ▸Above 200-day MA
Sentiment
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 6.9 |
| erm sentiment | 5.0 |
Insider
6.2/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 6.6 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.9 |
| quality rank | 6.5 |
| growth rank | 6.5 |
- ▸Best-in-class margins
Technical
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 5.0 |
| support resistance | 6.1 |
| 52w position | 8.2 |
Risk (lower is worse)
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.8 |
| days to cover | 10.0 |
| volatility | 6.3 |
| put call | 10.0 |
| implied vol | 5.4 |
| beta | 7.0 |
| debt equity | 0.0 |
- ▸Concentration risks: 3 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 1.9 |
| dividend safety | 5.5 |
- ▸Earnings concerns: 2B/2M
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more. | News modifier -1 (HOLD_IF_HOLDING → SELL_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD=-1Passed (6)
- MOMENTUM:4.5>=4.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:61d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.7=NEGATIVE
Warning (2)
- MOMENTUM:4.5<5.5 (soft — BUY_NOW allowed but watch)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.68
Upside
-3.4%
Downside
5.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $2.4B<$5B
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: MOMENTUM:4.5>=4.5. Top dim: Value at 7.4; weakest: Peer rank at 4.0. No conviction either direction.
The strongest dimensions are Value at 7.4, Growth at 7.4, and Quality at 6.9; the weakest are Peer rank at 4.0, Catalyst at 4.1, and Momentum at 4.5. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of -0.68 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1High Quality Franchise Margins
Trip ifOperating margin compresses below 45% for 2 consecutive quarters.
- P2Valuation Upside Exhausted
Trip ifUpside to take-profit target exceeds 10% as analyst targets are raised materially above current levels.
- P3Extreme Counterparty Concentration
Trip ifTop-10 customer concentration falls below 45% as reported in an annual filing.
- P4Mixed Earnings Execution
Trip ifEPS surprise stays above 3% for 2 consecutive quarters, establishing a reliable beat record.