Value
4.1/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 4.9 |
| EV/EBITDA | 1.0 |
| p ocf | 6.8 |
| Analyst target | 4.0 |
- ▸P/OCF: 15.8x (FFO proxy — REITs gated off P/E)
UDR · Why this verdict
Why UDR (UDR) 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 score5.2/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
UDR is a residential REIT with 205% free cash flow conversion relative to reported earnings, a Rule of 40 score of 61, and a Piotroski F-Score of 7, but consecutive earnings misses and a price that has already reached its analyst target eliminate the near-term entry case.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
UDR converts 205% of GAAP net income into free cash flow, with a Rule of 40 score of 61, indicating that reported earnings substantially understate the real cash generation of the apartment portfolio due to non-cash depreciation charges inherent to real estate accounting. Quality breakdown | Free cash flow conversion remains above 150% of net income over the next four quarters as the apartment portfolio generates consistent funds from operations growth. | →Stable |
| CounterHigh free cash flow conversion in REITs relative to GAAP earnings is mechanically expected due to depreciation treatment and does not necessarily indicate above-average operational quality compared to real estate peers. | ||
UDR missed earnings estimates in 2 of the last 4 quarters, including misses of -6.4% and -49.4% in the second half of 2025, indicating quarterly performance has been inconsistent and below the forward guidance implied by analyst models. Earnings | Earnings beat rate returns to 3 of 4 quarters and the average surprise is positive over the next 12 months. | ↓Deteriorating |
| CounterThe two most recent quarters of 2026 showed dramatic beats of +269.7% and +331.7%, suggesting the misses were temporary and that the company has significantly outperformed in the most recent period. | ||
UDR trades above its 200-day moving average in a golden cross breakout with RSI at 57 and MACD in bullish territory, reflecting a recovering technical setup after a period of price weakness in late 2025. Momentum breakdown | Price sustains the golden cross above the 200-day moving average and makes a new 52-week high within 12 months. | ↓Deteriorating |
| CounterOn-balance volume is falling despite the golden cross breakout, which is a divergence that historically signals distribution by institutional holders who are using the price recovery to exit positions. | ||
The stock has risen to essentially its analyst target of $38.93 from the current price of $38.90, producing a near-zero upside of 0.1% and a reward-to-risk ratio of 0.03 that makes any new entry effectively risk-free return neutral. Targets | Analyst consensus target rises above $44 following strong funds from operations results, restoring at least 12% upside from current levels. | →Stable |
| CounterREITs have historically been re-rated higher in declining interest rate environments, and any Federal Reserve pivot toward rate cuts could drive UDR's price-to-funds from operations multiple meaningfully above the current consensus target. | ||
UDR converts 205% of GAAP net income into free cash flow, with a Rule of 40 score of 61, indicating that reported earnings substantially understate the real cash generation of the apartment portfolio due to non-cash depreciation charges inherent to real estate accounting.
→StableQuality breakdown
- Expectation
- Free cash flow conversion remains above 150% of net income over the next four quarters as the apartment portfolio generates consistent funds from operations growth.
CounterHigh free cash flow conversion in REITs relative to GAAP earnings is mechanically expected due to depreciation treatment and does not necessarily indicate above-average operational quality compared to real estate peers.
UDR missed earnings estimates in 2 of the last 4 quarters, including misses of -6.4% and -49.4% in the second half of 2025, indicating quarterly performance has been inconsistent and below the forward guidance implied by analyst models.
↓DeterioratingEarnings
- Expectation
- Earnings beat rate returns to 3 of 4 quarters and the average surprise is positive over the next 12 months.
CounterThe two most recent quarters of 2026 showed dramatic beats of +269.7% and +331.7%, suggesting the misses were temporary and that the company has significantly outperformed in the most recent period.
UDR trades above its 200-day moving average in a golden cross breakout with RSI at 57 and MACD in bullish territory, reflecting a recovering technical setup after a period of price weakness in late 2025.
↓DeterioratingMomentum breakdown
- Expectation
- Price sustains the golden cross above the 200-day moving average and makes a new 52-week high within 12 months.
CounterOn-balance volume is falling despite the golden cross breakout, which is a divergence that historically signals distribution by institutional holders who are using the price recovery to exit positions.
The stock has risen to essentially its analyst target of $38.93 from the current price of $38.90, producing a near-zero upside of 0.1% and a reward-to-risk ratio of 0.03 that makes any new entry effectively risk-free return neutral.
→StableTargets
- Expectation
- Analyst consensus target rises above $44 following strong funds from operations results, restoring at least 12% upside from current levels.
CounterREITs have historically been re-rated higher in declining interest rate environments, and any Federal Reserve pivot toward rate cuts could drive UDR's price-to-funds from operations multiple meaningfully above the current consensus target.
Per-dimension breakdown
Quality
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 4.6 |
| ROA | 1.5 |
| Gross margin | 9.3 |
| Op margin | 8.1 |
| Net margin | 10.0 |
| Current ratio | 0.7 |
| FCF quality | 10.0 |
| Moat | 5.1 |
| Rule of 40 | 7.5 |
| Piotroski F | 6.7 |
- ▸Strong margins: 30%
- ▸Excellent cash conversion: 149% FCF/NI
- ▸No competitive moat
- ▸Rule of 40: 44 (pass)
Growth
6.2/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 2.5 |
| EPS growth | 10.0 |
- ▸Declining revenue: -0%
Momentum
2.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 7.6 |
| MACD | 1.5 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 0.0 |
- ▸Uptrend pullback (RSI 39) - buy opportunity
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 3.5 |
| Analyst rating | 7.5 |
| Price target | 6.6 |
Insider
3.6/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| holder change | 3.4 |
| notable moves | 3.0 |
- ▸Modest insider selling — $3,140,008 (0.022% of mkt cap)
Peer rank
4.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.0 |
| quality rank | 8.4 |
| growth rank | 1.3 |
- ▸Attractive P/E vs peers
- ▸Superior ROE vs peers
Technical
7.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 7.1 |
| support resistance | 7.1 |
| 52w position | 8.1 |
Risk (lower is worse)
6.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.3 |
| days to cover | 8.3 |
| volatility | 7.3 |
| put call | 5.9 |
| implied vol | 0.0 |
| max pain risk | 7.0 |
| beta | 8.9 |
| debt equity | 3.9 |
- ▸High IV: 82%
Catalyst
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.5 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 4.8 |
| news activity | 5.0 |
- ▸Strong earnings: 3B/1M
- ▸Dividend: 4.6%
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 (5)
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:73d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.8<4.5
- ASYMMETRY:-0.0=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.04
Upside
-0.2%
Downside
5.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 4.2 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Technical at 7.4) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:2.8<4.5, ASYMMETRY:-0.0=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.04 — supplementary context, not the trigger for this path.
The strongest dimensions are Technical at 7.4, Quality at 6.3, and Catalyst at 6.3; the weakest are Momentum at 2.8, Insider at 3.6, and Value at 4.1. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.04 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Elite Free Cash Conversion 205 Pct
Trip ifFree cash flow conversion falls below 100% of net income for 2 consecutive quarters, indicating the apartment portfolio's cash generation has deteriorated.
- P2Consecutive Earnings Misses
Trip ifAverage earnings surprise falls below -20% for 2 consecutive quarters, reverting to the pattern of large misses seen in the second half of 2025.
- P3Above 200 Day Golden Cross
Trip ifPrice falls below $37.38, the current stop-loss level, breaking the golden cross setup and indicating the technical recovery has failed.
- P4Target Reached Negative Asymmetry
Trip ifAnalyst consensus price target falls below $36, more than 7% below the current price of $38.90, indicating broad analyst expectation of a price decline ahead.