Value
4.6/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 4.0 |
| EV/EBITDA | 5.2 |
| p ocf | 7.1 |
| Analyst target | 4.0 |
- ▸P/OCF: 14.7x (FFO proxy — REITs gated off P/E)
FCPT · Why this verdict
Why Four Corners Property Trust, In (FCPT) 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 score5.4/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Free cash flow runs at approximately 127% of net income, reflecting the trust's ability to generate cash well in excess of reported earnings — a function of the net-lease REIT structure where non-cash depreciation suppresses net income — supported by operating margins near 39%. Quality breakdown | Free cash flow relative to net income remains above 100% for the next four quarters, confirming the durability of the cash generation profile. | →Stable |
| CounterHigh free cash flow relative to net income in REITs is partly structural rather than operational excellence; the metric could compress if lease structures weaken or tenant performance deteriorates, particularly given the heavy restaurant-sector concentration. | ||
Approximately 74% of the portfolio is concentrated in restaurant properties — a single-sector exposure the risk assessment flags as a high-severity concentration risk — meaning a sustained deterioration in restaurant operator health or a wave of tenant credit events could disproportionately affect rent collections. Bear case | Restaurant sector health holds, with no material increase in tenant vacancies or rent deferrals over the next four quarters. | →Stable |
| CounterRestaurant properties under net-lease structures typically carry long contractual lease terms with creditworthy national operators, providing near-term cash flow visibility that limits sensitivity to short-term consumer traffic fluctuations. | ||
The trust has delivered in-line or better results in each of the last four quarters with no misses — three quarters of precise in-line delivery and one beat — a pattern of highly predictable cash distribution that supports confidence in the dividend coverage model. Earnings | EPS results remain at or above consensus for at least three of the next four quarters, sustaining the no-miss streak. | →Stable |
| CounterThe consistency reflects a low-variability business model rather than a rising earnings trajectory; the in-line streak does not signal accelerating value creation, and average positive surprise over the trailing four quarters has been negligible at 0.4%. | ||
The current price is just 0.5% below the near-term resistance-derived take-profit target of $24.97, leaving essentially no incremental upside from here — the stock has reached the price level where the original entry setup was designed to be exited. Price targets | A pullback to the entry target level near $23.35 would restore upside to the take-profit target of approximately 7%, re-creating the original favorable risk/reward geometry. | →Stable |
| CounterIf fundamentals improve or analyst price targets are revised higher, the resistance ceiling could be lifted, turning the current level into a consolidation zone rather than an exit level. | ||
Free cash flow runs at approximately 127% of net income, reflecting the trust's ability to generate cash well in excess of reported earnings — a function of the net-lease REIT structure where non-cash depreciation suppresses net income — supported by operating margins near 39%.
→StableQuality breakdown
- Expectation
- Free cash flow relative to net income remains above 100% for the next four quarters, confirming the durability of the cash generation profile.
CounterHigh free cash flow relative to net income in REITs is partly structural rather than operational excellence; the metric could compress if lease structures weaken or tenant performance deteriorates, particularly given the heavy restaurant-sector concentration.
Approximately 74% of the portfolio is concentrated in restaurant properties — a single-sector exposure the risk assessment flags as a high-severity concentration risk — meaning a sustained deterioration in restaurant operator health or a wave of tenant credit events could disproportionately affect rent collections.
→StableBear case
- Expectation
- Restaurant sector health holds, with no material increase in tenant vacancies or rent deferrals over the next four quarters.
CounterRestaurant properties under net-lease structures typically carry long contractual lease terms with creditworthy national operators, providing near-term cash flow visibility that limits sensitivity to short-term consumer traffic fluctuations.
The trust has delivered in-line or better results in each of the last four quarters with no misses — three quarters of precise in-line delivery and one beat — a pattern of highly predictable cash distribution that supports confidence in the dividend coverage model.
→StableEarnings
- Expectation
- EPS results remain at or above consensus for at least three of the next four quarters, sustaining the no-miss streak.
CounterThe consistency reflects a low-variability business model rather than a rising earnings trajectory; the in-line streak does not signal accelerating value creation, and average positive surprise over the trailing four quarters has been negligible at 0.4%.
The current price is just 0.5% below the near-term resistance-derived take-profit target of $24.97, leaving essentially no incremental upside from here — the stock has reached the price level where the original entry setup was designed to be exited.
→StablePrice targets
- Expectation
- A pullback to the entry target level near $23.35 would restore upside to the take-profit target of approximately 7%, re-creating the original favorable risk/reward geometry.
CounterIf fundamentals improve or analyst price targets are revised higher, the resistance ceiling could be lifted, turning the current level into a consolidation zone rather than an exit level.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Four Corners Property Trust generates free cash flow well in excess of reported net income and runs operating margins near 39%, but a 74% concentration in restaurant properties represents a meaningful single-sector exposure risk, and the current price is essentially at its near-term resistance target, leaving almost no upside headroom from here.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.5 |
| ROA | 2.5 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 2.4 |
| FCF quality | 9.2 |
| Moat | 5.8 |
| Rule of 40 | 9.0 |
| Piotroski F | 7.8 |
- ▸Strong margins: 39%
- ▸Excellent cash conversion: 127% FCF/NI
- ▸Rule of 40: 56 (pass)
- ▸Strong Piotroski F-Score: 7/9
Growth
4.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.2 |
| EPS growth | 4.3 |
Momentum
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 7.7 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 1.7 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 6.0 |
| Analyst rating | 6.9 |
| Price target | 6.8 |
- ▸Light analyst coverage (9.0) — signal dampened
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider buying — $99,919 (0.004% of mkt cap)
Peer rank
5.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.9 |
| quality rank | 6.0 |
| growth rank | 4.2 |
Technical
4.2/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.0 |
| support resistance | 1.3 |
| 52w position | 9.2 |
Risk (lower is worse)
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.1 |
| days to cover | 6.3 |
| volatility | 7.8 |
| put call | 10.0 |
| implied vol | 4.4 |
| beta | 8.1 |
| debt equity | 5.1 |
- ▸Concentration risks: 1 HIGH, 2 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 2.7 |
| dividend safety | 5.2 |
| news activity | 5.0 |
- ▸Dividend: 584.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- MOMENTUM:5.0>=4.5
- INSIDER:OK
- EARNINGS_PROXIMITY:23d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.3=NEGATIVE
Warning (2)
- MOMENTUM:5.0<5.5 (soft — BUY_NOW allowed but watch)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.32
Upside
-1.8%
Downside
5.6%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 51, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $2.8B<$5B
Investment implication
The F-path SELL output reflects an overall score of 5.4 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Risk (lower is worse) at 7.1) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.3=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.32 — supplementary context, not the trigger for this path.
The strongest dimensions are Risk (lower is worse) at 7.1, Quality at 6.9, and Sentiment at 6.6; the weakest are Technical at 4.2, Growth at 4.2, and Value at 4.6. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of -0.32 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Strong Cash Conversion Quality
Trip ifFree cash flow falls below 100% of net income for 2 consecutive quarters.
- P2Restaurant Property Concentration Risk
Trip ifRestaurant property exposure falls below 60% of the total portfolio as the trust diversifies into other property types.
- P3Consistent Earnings Delivery
Trip ifEPS falls below consensus estimate for 2 consecutive quarters.
- P4Price At Resistance Target
Trip ifPrice pulls back to below $23.35, restoring upside to the $24.97 take-profit target of more than 6%.