Gladstone Commercial Corporation Real Estate Investment Trust (GOOD)

FairStock Score: 35/100 — MIXED

Key Financials

Strengths

• Generates $71 million in annual free cash flow (11.6% yield on market cap)
• Strong Piotroski F-Score of 7/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• Revenue growth of 16.3% demonstrates strong top-line momentum
• Attractive 9.6% dividend yield providing steady income returns

Concerns

• Trades significantly above Graham Number ($3) with negative 277% margin of safety—limited downside protection
• High leverage at 2.49x debt-to-equity increases financial risk and interest expense burden
• Altman Z-Score of -0.4 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

Gladstone Commercial Corporation Real Estate Investment Trust is a micro-cap real estate company valued at $610 million. The business generates $161 million in annual revenue with a 1.4% net margin and $71 million in free cash flow. From a quality standpoint, Gladstone shows solid Piotroski F-Score of 7/9 and distressed Altman Z-Score of -0.4 warrants caution. On valuation, the stock is commanding a steep 89.5x multiple, with trades far above its Graham Number ($3) with no margin of safety. Growth dynamics show revenue growing at 16.3% and profit growth of -25.1%. The 9.6% dividend yield adds an income component for patient holders. Our composite FairStock Score of 35/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Gladstone's 16% revenue growth trajectory could accelerate as it captures additional market share in the real estate sector. With $71 million in annual free cash flow (11.6% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 90x 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