A Look At St. Joe (JOE) Valuation As It Expands Watersound Sales Centers And Integrated Services

Event overview and why it matters for St. Joe

St. Joe (JOE) has broken ground on a third sales center for its Watersound Real Estate brokerage at Watersound West Bay Center, expanding its presence in high-traffic Gulf Coast communities.

The new location is planned to sit alongside Watersound Title Agency and Watersound Insurance Agency, reflecting the company’s push toward integrated, asset-light services that can support recurring revenue tied to its residential communities.

See our latest analysis for St. Joe.

St. Joe’s latest sales center move comes after a period of solid gains, with a 30 day share price return of 8.5% and year to date share price return of 15.9%, while the 1 year total shareholder return of 53.7% points to momentum that has extended beyond the recent quarter.

If this real estate expansion has you thinking about longer term themes, it could be a good moment to scan 22 top founder-led companies as potential new ideas beyond St. Joe.

With St. Joe trading at $69.33 and an indicated intrinsic discount of about 20% alongside a 1 year total return of 53.7%, you have to ask: is there still an opening here, or is the market already baking in future growth?

Preferred P/E of 38.3x: Is it justified?

St. Joe is currently trading on a P/E of 38.3x, which sits above the wider US Real Estate industry but below the peer group average. This suggests the market appears to be paying up for earnings while still sitting under some closer peers.

The P/E ratio compares the share price with earnings per share, so a higher multiple usually reflects investors being willing to pay more for each dollar of current profit. For a real estate development and operating company like St. Joe, that can reflect how investors view the quality and consistency of its earnings across residential, hospitality and commercial activities.

Here, a 38.3x P/E sits above the US Real Estate industry average of 34.2x, which points to a richer valuation than the broader sector. Yet it is below the peer average of 45.1x, suggesting the market is not assigning it the highest premium within its closer comparison group. That balance sits alongside its classification as trading at 19.7% below the SWS DCF model estimate of future cash flow value of $86.38. This frames the current P/E as relatively full compared to the sector, but not out of step with peers when you include the DCF view.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-Earnings of 38.3x (ABOUT RIGHT)

However, you still have to weigh concentration in a single Gulf Coast region and exposure to real estate sentiment, both of which could challenge today’s valuation story.

Find out about the key risks to this St. Joe narrative.

Another view on value: DCF vs earnings multiple

The P/E suggests St. Joe is on the expensive side relative to the broader US real estate group, yet our DCF model points to the shares trading about 20% below an $86.38 fair value estimate. When price and cash flow signal different things, which one would you lean on?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out St. Joe for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 56 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

All of this paints a mixed but interesting picture. If it feels time sensitive, review the underlying data yourself and weigh 2 key rewards and 1 important warning sign carefully before deciding what it means for you.

Looking for more investment ideas?

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• Target potential mispriced opportunities by scanning our 56 high quality undervalued stocks that pair solid fundamentals with discounted share prices.
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• Prioritise resilience by reviewing 80 resilient stocks with low risk scores that score well on risk metrics and balance sheet quality.

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.

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