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1. Company Snapshot

1.a. Company Description

Tejon Ranch Co., together with its subsidiaries, operates as a diversified real estate development and agribusiness company.It operates through five segments: Commercial/Industrial Real Estate Development, Resort/Residential Real Estate Development, Mineral Resources, Farming, and Ranch Operations.The Commercial/Industrial Real Estate Development segment engages in the planning and permitting of land for development; construction of infrastructure projects, pre-leased buildings, and buildings to be leased or sold; and sale of land to third parties for their own development.


It is also involved in the activities related to communications leases, and landscape maintenance.This segment leases land to two auto service stations with convenience stores, 13 fast-food operations, a motel, an antique shop, and a post office; various microwave repeater locations, radio and cellular transmitter sites, and fiber optic cable routes; and 32 acres of land for an electric power plant.The Resort/Residential Real Estate Development segment engages in land entitlement, planning, pre-construction engineering, stewardship, and conservation activities.


The Mineral Resources segment includes oil and gas royalties, rock and aggregate royalties, and royalties from a cement operation leased to National Cement Company of California, Inc.; and the management of water assets and infrastructure projects.The Farming segment farms permanent crops, such as wine grapes in 1,036 acres, almonds in 2,262 acres, and pistachios in 1,053 acres.It also manages the farming of alfalfa and forage mix on 626 acres in the Antelope Valley; and leases 720 acres of land for growing vegetables, as well as almonds.


The Ranch Operations segment provides game management and ancillary land services comprising grazing leases and filming, as well as various guided hunts.Tejon Ranch Co. was founded in 1843 and is based in Lebec, California.

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1.b. Last Insights on TRC

Tejon Ranch Co.'s recent performance was negatively impacted by several factors. The abrupt departure of CFO Brett A. Brown on July 11, 2025, raised concerns about transparency and disclosure. Additionally, shareholders, including Glenbrook Capital Management and Strathmore Capital, have been urging the company's Board of Directors to reduce general and administrative expenses and prioritize free cash flow production. The company also faced a mini-tender offer from TRC Capital Investment Corporation, which was rejected by several major shareholders, including Centene Corporation and PSEG. Furthermore, the company's second-quarter 2025 financial results, announced on August 7, 2025, may have also been a concern.

1.c. Company Highlights

2. Tejon Ranch's Q3 2025 Earnings: A Step in the Right Direction

Tejon Ranch reported net income of $1.7 million or $0.06 per basic and diluted shares for the third quarter ended September 30, 2025, compared to a net loss of $1.8 million in the same period last year. Total revenues were $12 million, up 10% year-over-year, while total costs and expenses declined by nearly 5%. The company's earnings per share (EPS) of $0.06 beat analyst estimates of $0.01. Revenue growth was driven by a strong performance in the farming segment, with revenues increasing by more than 50% year-over-year.

Publication Date: Nov -23

📋 Highlights
  • Farming Segment Growth:: Revenues increased by 50% YoY with a $2M improvement in bottom-line profitability.
  • TRCC Leasing Performance:: Industrial portfolio 100% leased, commercial 95%, and outlets 90% occupied, supported by 5 industrial joint ventures with Majestic Realty.
  • Net Income Recovery:: Q3 2025 net income of $1.7M ($0.06/share) reversed last year’s $1.8M loss, with total revenues up 10% and costs down 5%.
  • Cost Discipline:: $2M annual savings from workforce reductions and operational efficiencies to improve margins.
  • Project Timelines:: Mountain Village capital raise targeted for 1 year, 18-24 month construction; Centennial re-entitlement to conclude by end of 2026.

Farming Segment Drives Growth

The farming segment's strong performance was a key highlight of the quarter, with revenues increasing by more than 50% and the segment's bottom line improving by $2 million. According to Matthew Walker, "Our farming business remains a foundational part of Tejon Ranch, providing several strategic advantages, including managing water rights, supporting access to low-cost debt, and producing solid returns with reasonable capital investment."

Tejon Ranch Commerce Center's Steady Performance

The Tejon Ranch Commerce Center (TRCC) continued to perform steadily, with the industrial portfolio remaining 100% leased, the commercial portfolio at 95% leased, and the outlets at Tejon maintaining a 90% occupancy. The company's joint ventures also played a major role in driving organic growth at TRCC.

Cost Discipline and Future Plans

The company has been focused on cost discipline, with a recent workforce reduction expected to save more than $2 million per year. Matthew Walker emphasized that "Tejon Ranch is not yet where it needs to be, and we have a lot more to do to get it there." The company's plans for its master-planned communities, including Mountain Village and Centennial, are expected to drive long-term cash flow growth.

Valuation Metrics

Tejon Ranch's current valuation metrics suggest that the market is pricing in significant challenges. The company's Price-to-Sales Ratio is 9.32, and its EV/EBITDA ratio is -72.92. The stock's current Price-to-Book Ratio is 0.91, indicating that the market is valuing the company's assets at close to their book value. Analysts estimate revenue growth of 7.5% next year, which may help to improve the company's valuation metrics.

3. NewsRoom

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Murray Stahl's Strategic Acquisition of Tejon Ranch Co Shares

Nov -15

Source: gurufocus.com

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Tejon Ranch Co. CEO Issues Letter Ahead of Investor Engagement Event

Nov -13

Source: globenewswire.com

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Tejon Ranch Co. (TRC) Q3 2025 Earnings Call Transcript

Nov -07

Source: seekingalpha.com

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Tejon Ranch Co. Announces Third Quarter 2025 Financial Results

Nov -06

Source: globenewswire.com

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New Preferred Stock And Baby Bond IPOs, October 2025

Nov -03

Source: seekingalpha.com

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Tejon Ranch Co. Announces Date for Third Quarter 2025 Earnings Release and Conference Call

Oct -22

Source: globenewswire.com

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Amrize Recommends Shareholders Reject Mini-Tender Offer By TRC Capital Investment Corporation

Aug -28

Source: businesswire.com

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CENTENE CORPORATION RECOMMENDS STOCKHOLDERS REJECT "MINI-TENDER" OFFER FROM TRC CAPITAL INVESTMENT CORPORATION

Aug -20

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.00%)

6. Segments

Mineral Resources

Expected Growth: 3%

Tejon Ranch Co.'s Mineral Resources segment growth is driven by increasing demand for construction materials, strategic land holdings, and favorable regulatory environment. The company's proximity to high-growth markets, such as Los Angeles, and its ability to supply high-quality aggregates also contribute to its growth. Additionally, the company's focus on sustainable mining practices and environmental stewardship enhances its reputation and drives long-term growth.

Farming

Expected Growth: 2%

Tejon Ranch Co.'s farming segment growth is driven by increasing demand for almonds and grapes, expansion of farming operations, and strategic partnerships. Additionally, favorable weather conditions, improved crop yields, and growing exports to Asia contribute to the 2% growth rate.

Real Estate - Commercial/Industrial

Expected Growth: 5%

Tejon Ranch Co.'s commercial/industrial real estate segment growth is driven by increasing demand for logistics and e-commerce facilities, proximity to major transportation hubs, and strategic partnerships with leading companies. Additionally, the company's master-planned communities and mixed-use developments attract businesses and talent, fueling growth. Strong economic fundamentals, infrastructure investments, and a favorable business environment also contribute to the segment's 5% growth.

Ranch

Expected Growth: 1%

Tejon Ranch Co.'s ranch segment growth is driven by increasing demand for sustainable beef, strategic land management, and diversification into high-value crops. Additionally, the company's unique location and climate enable year-round grazing, reducing costs and increasing profitability. These factors contribute to the segment's growth, positioning Tejon Ranch Co. for long-term success.

7. Detailed Products

Industrial Land Sales

Tejon Ranch Co. sells industrial land to companies and developers for the construction of warehouses, distribution centers, and other industrial facilities.

Commercial Land Sales

Tejon Ranch Co. sells commercial land to developers and businesses for the construction of retail centers, office buildings, and other commercial properties.

Residential Land Sales

Tejon Ranch Co. sells residential land to homebuilders and developers for the construction of single-family homes, apartments, and other residential properties.

Mineral Resources

Tejon Ranch Co. extracts and sells mineral resources, including oil, natural gas, and other minerals, from its land holdings.

Outdoor Recreation

Tejon Ranch Co. offers outdoor recreational activities, including hunting, fishing, and camping, on its land holdings.

Conservation

Tejon Ranch Co. partners with conservation organizations to protect and preserve natural habitats and ecosystems on its land holdings.

8. Tejon Ranch Co.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Tejon Ranch Co. is medium due to the availability of alternative land uses and development opportunities in the region.

Bargaining Power Of Customers

The bargaining power of customers is low for Tejon Ranch Co. as the company has a strong brand reputation and a diverse range of products and services.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for Tejon Ranch Co. as the company relies on a few key suppliers for its operations, but has some flexibility to negotiate prices.

Threat Of New Entrants

The threat of new entrants is high for Tejon Ranch Co. due to the attractiveness of the real estate industry and the relatively low barriers to entry.

Intensity Of Rivalry

The intensity of rivalry is high for Tejon Ranch Co. due to the competitive nature of the real estate industry and the presence of several established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 9.30%
Debt Cost 3.95%
Equity Weight 90.70%
Equity Cost 6.95%
WACC 6.67%
Leverage 10.25%

11. Quality Control: Tejon Ranch Co. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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RCM Technologies

A-Score: 5.5/10

Value: 5.1

Growth: 8.4

Quality: 5.3

Yield: 0.0

Momentum: 9.0

Volatility: 5.0

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Tejon Ranch

A-Score: 4.5/10

Value: 7.8

Growth: 2.9

Quality: 3.6

Yield: 0.0

Momentum: 4.0

Volatility: 8.7

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A-Score: 4.1/10

Value: 6.2

Growth: 5.1

Quality: 4.2

Yield: 0.0

Momentum: 6.5

Volatility: 2.7

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FTAI Infrastructure

A-Score: 3.5/10

Value: 7.2

Growth: 4.2

Quality: 2.4

Yield: 4.0

Momentum: 1.0

Volatility: 2.3

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Mammoth Energy Services

A-Score: 3.3/10

Value: 9.4

Growth: 3.7

Quality: 3.2

Yield: 0.0

Momentum: 0.5

Volatility: 3.0

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NN

A-Score: 2.4/10

Value: 7.7

Growth: 1.6

Quality: 2.1

Yield: 0.0

Momentum: 1.0

Volatility: 2.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

16.01$

Current Price

16.01$

Potential

-0.00%

Expected Cash-Flows