Value
7.6/10data confidence 60%| Component | Sub-score |
|---|---|
| P/S | 8.9 |
| EV/EBITDA | 4.6 |
| p ocf | 9.3 |
- ▸P/OCF: 6.7x (FFO proxy — REITs gated off P/E)
- ▸Attractively valued
ESBA · Why this verdict
Why Empire State Realty OP, L.P. (ESBA) 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 score5.3/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The stock is in a confirmed downtrend—below the 200-day moving average with the slope at negative 4% over 30 days, falling on-balance volume signaling distribution, and hard gate failures on both momentum and a death cross—indicating that price action is broadly unfavorable regardless of the fundamental valuation. Engine gate (failed) | Momentum should recover above 4.5 with on-balance volume turning to accumulation before the technical setup warrants fresh capital allocation. | →Stable |
| CounterA range-bound RSI near the mid-level means the downtrend has not pushed the stock into deeply oversold territory, which could limit further downside and set the stage for a mean-reversion bounce even without a full technical reversal. | ||
The stock trades at a price-to-operating-cash-flow multiple of 6.3x, flagged as attractively valued, implying the market is pricing in a material degree of ongoing pessimism about the asset's earning power that may prove excessive if fundamentals stabilize. Valuation breakdown | The cash-flow multiple should expand toward 9x to 10x over 12 months as sentiment normalizes and the technical downtrend reverses, validating the valuation floor. | →Stable |
| CounterA low cash-flow multiple in office real estate can persist indefinitely if the market correctly prices in structural demand challenges; an attractively cheap stock can stay cheap when the category faces secular headwinds that the current data does not dismiss. | ||
Free cash flow stands at 389% of net income, an exceptional reading indicating that cash earnings are meaningfully more robust than reported GAAP net income would suggest—providing a wider-than-apparent financial cushion and supporting the dividend at the current coverage level. Quality breakdown | Free cash conversion should remain above 150% over the next four quarters, confirming that the high ratio is structural rather than a single-period anomaly. | →Stable |
| CounterA very high FCF-to-net-income ratio can reflect large non-cash charges depressing GAAP net income rather than purely strong cash generation; if the underlying drivers of elevated depreciation normalize, the ratio could narrow materially without any operational deterioration. | ||
Growth is flagged as weak across both revenue and earnings dimensions, and the overall score reflects a business that is not generating the kind of organic expansion that would drive a meaningful re-rating from a value floor toward a fair-value multiple. Bear case | Funds from operations per unit should grow more than 5% year-over-year for two consecutive quarters before growth can be considered a constructive factor in the investment case. | →Stable |
| CounterOffice real estate can sustain consistent distributions without strong growth by recycling mature assets and maintaining occupancy; if the dividend holds steady and the asset base is maintained, the lack of growth may reflect a deliberate capital-allocation posture rather than a structural deficiency. | ||
The stock is in a confirmed downtrend—below the 200-day moving average with the slope at negative 4% over 30 days, falling on-balance volume signaling distribution, and hard gate failures on both momentum and a death cross—indicating that price action is broadly unfavorable regardless of the fundamental valuation.
→StableEngine gate (failed)
- Expectation
- Momentum should recover above 4.5 with on-balance volume turning to accumulation before the technical setup warrants fresh capital allocation.
CounterA range-bound RSI near the mid-level means the downtrend has not pushed the stock into deeply oversold territory, which could limit further downside and set the stage for a mean-reversion bounce even without a full technical reversal.
The stock trades at a price-to-operating-cash-flow multiple of 6.3x, flagged as attractively valued, implying the market is pricing in a material degree of ongoing pessimism about the asset's earning power that may prove excessive if fundamentals stabilize.
→StableValuation breakdown
- Expectation
- The cash-flow multiple should expand toward 9x to 10x over 12 months as sentiment normalizes and the technical downtrend reverses, validating the valuation floor.
CounterA low cash-flow multiple in office real estate can persist indefinitely if the market correctly prices in structural demand challenges; an attractively cheap stock can stay cheap when the category faces secular headwinds that the current data does not dismiss.
Free cash flow stands at 389% of net income, an exceptional reading indicating that cash earnings are meaningfully more robust than reported GAAP net income would suggest—providing a wider-than-apparent financial cushion and supporting the dividend at the current coverage level.
→StableQuality breakdown
- Expectation
- Free cash conversion should remain above 150% over the next four quarters, confirming that the high ratio is structural rather than a single-period anomaly.
CounterA very high FCF-to-net-income ratio can reflect large non-cash charges depressing GAAP net income rather than purely strong cash generation; if the underlying drivers of elevated depreciation normalize, the ratio could narrow materially without any operational deterioration.
Growth is flagged as weak across both revenue and earnings dimensions, and the overall score reflects a business that is not generating the kind of organic expansion that would drive a meaningful re-rating from a value floor toward a fair-value multiple.
→StableBear case
- Expectation
- Funds from operations per unit should grow more than 5% year-over-year for two consecutive quarters before growth can be considered a constructive factor in the investment case.
CounterOffice real estate can sustain consistent distributions without strong growth by recycling mature assets and maintaining occupancy; if the dividend holds steady and the asset base is maintained, the lack of growth may reflect a deliberate capital-allocation posture rather than a structural deficiency.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Empire State Realty operates at a cash-flow multiple of 6.3x with exceptional free cash conversion at 389% of net income, but the stock is in a confirmed technical downtrend with hard gate failures on both momentum and a death cross, and the balanced risk/reward offers no asymmetric upside—making the value case an anchor waiting for a technical catalyst rather than a current entry opportunity.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.1 |
| ROA | 1.4 |
| Gross margin | 6.5 |
| Op margin | 6.2 |
| Net margin | 3.9 |
| Current ratio | 5.5 |
| FCF quality | 10.0 |
| Moat | 5.2 |
| Piotroski F | 6.7 |
- ▸Excellent cash conversion: 389% FCF/NI
- ▸No competitive moat
Growth
1.9/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.7 |
| EPS growth | 0.0 |
Momentum
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.0 |
| MACD | 7.4 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 10.0 |
| vol acceleration | 8.2 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -4.5%/30d — confirmed downtrend
- ▸Volume surge (2.1x avg) on up move
Sentiment
5.7/10data confidence 67%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.5 |
| Analyst rating | 5.0 |
Insider
5.0/10data confidence 50%Peer rank
5.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.0 |
| quality rank | 4.7 |
| growth rank | 5.3 |
Technical
3.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 4.7 |
| 52w position | 3.2 |
| gap | 5.0 |
Risk (lower is worse)
5.0/10data confidence 80%| Component | Sub-score |
|---|---|
| days to cover | 10.0 |
| volatility | 0.0 |
| beta | 5.4 |
| debt equity | 4.4 |
- ▸Concentration risks: 2 HIGH, 1 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.0/10data confidence 50%| Component | Sub-score |
|---|---|
| dividend safety | 6.0 |
| news activity | 8.0 |
- ▸Dividend: 248.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position. | News modifier +1 (SELL_IF_HOLDING → HOLD_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_SELL|L3:NEWS_MOD=+1Passed (7)
- MOMENTUM:7.6>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:NO_DATE
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (2)
- ASYMMETRY:UPSIDE_EXHAUSTED (upside=0.0%)
- DEATH_CROSS:momentum=7.6>=5.0 recovering
Reward-to-Risk
0.00
Upside
+0.0%
Downside
15.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 60
EdgeInst Constrain — Small cap ($1.6B) below institutional reach
SuitabilityAggressive — Beta 1.40>1.3, MCap $1.6B<$5B
Investment implication
The F-path SELL output reflects an overall score of 4.8 below the 5.4 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 7.6) was not enough to lift the adjusted overall above the threshold. Current asymmetry R:R is 0.00 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 7.6, Momentum at 7.6, and Catalyst at 7.0; the weakest are Growth at 1.9, Technical at 3.2, and Risk (lower is worse) at 5.0. The V9 engine cleared all gates with 2 warnings, producing an asymmetric reward-to-risk of 0.00 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Attractive Cash Flow Valuation
Trip ifPrice-to-operating-cash-flow multiple expands above 12x for 2 consecutive quarters.
- P2Exceptional Free Cash Conversion
Trip ifFree cash flow as a percentage of net income falls below 100% for 2 consecutive quarters.
- P3Confirmed Technical Downtrend
Trip ifMomentum score rises above 4.5 for 2 consecutive measurement periods.
- P4Weak Growth Profile
Trip ifFunds from operations per unit grows more than 8% year-over-year for 2 consecutive quarters.