Is It Too Late To Consider St. Joe (JOE) After Its Strong 1 Year Run?

• If you are wondering whether St. Joe is still reasonably priced after its recent run, this article walks through what the current share price might be implying about value.
• The stock most recently closed at US$71.11, with returns of 0.9% over 7 days, 8.7% over 30 days, 18.9% year to date, 50.0% over 1 year, 65.4% over 3 years and 44.9% over 5 years. This raises fair questions about how the current valuation stacks up.
• Recent news flow around St. Joe has mainly focused on its position in real estate management and development and how investors are thinking about its assets and project pipeline. This backdrop helps frame whether the share price moves are being driven more by sentiment around its portfolio or by changing expectations around long term fundamentals.
• On our checks, St. Joe has a valuation score of 2 out of 6. This means it screens as undervalued on 2 of 6 tests. Next, we will look at how different valuation methods interpret that result and why there may be an even better way to think about value later in the article.

St. Joe scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: St. Joe Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model takes estimates of the cash a business may generate in the future and discounts those amounts back to today to arrive at an estimated present value per share.

For St. Joe, the model uses a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow is about $167.68 million. Simply Wall St then projects free cash flow out to 2035, with estimates such as $200.98 million in 2026 and $383.66 million in 2035, and discounts each of those future cash flows back to today using its chosen rate.

Bringing all those discounted cash flows together gives an estimated intrinsic value of about $87.35 per share. Compared with the recent share price of $71.11, this indicates the stock is 18.6% below that DCF estimate, which suggests St. Joe screens as undervalued on this model.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests St. Joe is undervalued by 18.6%. Track this in your watchlist or portfolio, or discover 56 more high quality undervalued stocks.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for St. Joe.

Approach 2: St. Joe Price vs Earnings

For a profitable company like St. Joe, the P/E ratio is a straightforward way to relate what you pay today to the earnings the business is generating. It gives you a quick sense of how many dollars of share price you are paying for each dollar of earnings.

What counts as a “normal” or “fair” P/E often reflects the market’s expectations for earnings growth and the risk investors see in those earnings. Higher expected growth or lower perceived risk can justify a higher P/E, while lower growth or higher risk usually point to a lower P/E.

St. Joe currently trades on a P/E of 39.25x. That sits above the Real Estate industry average P/E of 27.31x and below the peer group average of 45.18x. Simply Wall St also uses a proprietary “Fair Ratio” which estimates the P/E you might expect for St. Joe given factors like its earnings growth profile, industry, profit margins, market cap and risk characteristics. This Fair Ratio can be more informative than simple peer or industry comparisons because it adjusts for company specific fundamentals rather than assuming all businesses deserve similar multiples.

Since a specific Fair Ratio figure is not provided here, you should treat this P/E comparison as a high level cross check alongside the DCF work above rather than a definitive verdict on mispricing.

Result: ABOUT RIGHT

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 23 top founder-led companies.

Upgrade Your Decision Making: Choose your St. Joe Narrative

Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, which are simply your story about a company linked directly to your own numbers for fair value, future revenue, earnings and margins.

On Simply Wall St, Narratives live in the Community page and let you connect St. Joe’s business story to a financial forecast, then to your view of fair value, in a way that is easier to follow than raw models or ratios on their own.

You can then compare your Fair Value to today’s price to help decide whether you see St. Joe as closer to a buy, a hold, or a sell, and your Narrative will automatically refresh when new information such as news or earnings is pulled into the platform.

For example, one St. Joe Narrative in the Community might assume a lower fair value with cautious revenue and margin estimates, while another assumes a higher fair value with more optimistic forecasts, giving you a clear view of how different investors interpret the same facts.

Do you think there's more to the story for St. Joe? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com