Douglas Emmett Inc. Common Stock (DEI)

FairStock Score: 26/100 — RISKY

Key Financials

Strengths

• Generates $493 million in annual free cash flow (28.1% yield on market cap)
• Attractive 7.2% dividend yield providing steady income returns

Concerns

• Trades significantly above Graham Number ($5) with negative 119% margin of safety—limited downside protection
• Currently unprofitable—sustained losses could lead to dilutive capital raises or balance sheet deterioration
• Altman Z-Score of 0.0 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Douglas Emmett Inc. Common Stock is a micro-cap real estate company valued at $1.8 billion. Revenue stands at $1.0 billion, though the company is currently unprofitable. From a quality standpoint, Douglas shows distressed Altman Z-Score of 0.0 warrants caution and negative ROE indicating losses. On valuation, the stock is commanding a steep 117.0x multiple, with trades far above its Graham Number ($5) with no margin of safety. Growth dynamics show revenue growing at 1.8% and profit growth of -670.7%. The 7.2% dividend yield adds an income component for patient holders. Our composite FairStock Score of 26/100 reflects below-average fundamentals overall. Without profitability, this remains speculative—suitable only for those with high risk tolerance and a long time horizon.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $493 million in annual free cash flow (28.1% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 117x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer