- Buys
- 1 of 4
- Three are needed, so it stays out of the basket. Investor C did not vote.
- Capital expenditure in 2025
- $108.1M
- The 10-K total. The capex line most screens read showed $4.06M.
- Cash yield after operating-property capex
- 4.3%
- 2025 operating cash flow less $23.8M, on a $3.89B market cap. The 10-year Treasury yields 5.10%.
- Largest holder
- 31.7%
- Schedule 13D/A, June 23, 2026. It can sway any merger or sale.
Quality, long holding periodsAn irreplaceable coastal land bank, priced with no room for a storm or for reinvestment.
Deep value, margin of safetyLand value is not filed, and on normalised earnings the price has no cushion.
Macro and reflexivityIts model and its fallback both timed out. No vote was cast.
GrowthA forty-year entitlement runway turning into lots and recurring hotel income.
Session of October 18, 2026. Investor C did not answer, so three seats voted. This is the committee's first review of St. Joe.
Bottom line
St. Joe owns 165,000 acres of Northwest Florida, and nobody on the committee disputes that the land is scarce. The argument is about cash. The 38.7% free cash flow margin that screens print rests on a capex line of $4.06M. The 10-K puts 2025 capital expenditures at $108.1M. Most of that is residential development already inside operating cash flow, but $23.8M went on hotels, commercial buildings and equipment and appears only under investing.
Take that out and 2025 free cash flow is about $166.9M, which yields less than a 10-year Treasury. The company compounded free cash flow at 14.8% a year from 2021 to 2025, so the growth the price needs is not absurd. It does need 2025 to be a floor rather than a good year, and that is where Investor B and Investor D part.
The first test is the 10-Q for the September quarter, due by November 9, 2026, the first filing after Hurricane Isaias came ashore on this coast.
The business in 60 seconds
St. Joe develops its own acreage in Bay and Walton counties, about 90% of it within fifteen miles of the Gulf (10-K, filed February 25, 2026). Part sits inside a Sector Plan that originally entitled more than 170,000 homes, 22 million square feet of commercial space and 3,000 hotel rooms. Land is carried at historical cost, so book equity says nothing about what the acreage would fetch.
Hospitality, with 1,053 hotel rooms plus clubs and restaurants, was 51% of segment revenue in the June quarter. Residential sells finished homesites to a concentrated group of homebuilders. One joint venture, the Latitude Margaritaville Watersound community of about 3,700 homes, supplied more than 20% of pre-tax income in each of the last three years (10-K).
An investment adviser and its flagship fund report 31.7% of the shares (Schedule 13D/A, filed June 23, 2026). The 10-K says that holder may be deemed an affiliate and can influence any vote on a merger or sale of substantially all assets. The chief executive is also chairman.
| Fiscal year | Revenue | Operating margin | Free cash flow | Diluted shares |
|---|---|---|---|---|
| 2021 | $267.0M | 35.4% | $107.5M | 58.9M |
| 2022 | $252.3M | 24.4% | $40.9M | 58.7M |
| 2023 | $389.3M | 23.3% | $97.7M | 58.3M |
| 2024 | $402.7M | 23.7% | $100.2M | 58.3M |
| 2025 | $513.2M | 28.5% | $186.6M | 58.0M |
Annual 10-K figures, SEC EDGAR. Free cash flow is operating cash flow less the narrow capex line, the basis the Valuation section adjusts.
What changed
- Hurricane Isaias, October 10, 2026. The storm made landfall on the Panhandle (CNBC, October 10). By October 12 the company said its hotels, restaurants and commercial properties had reopened (reported by Seeking Alpha). It gave no damage estimate and has filed no 8-K since July 29.
- A stronger June quarter. Revenue rose to $158.83M from $129.08M and operating income to $54.77M from $36.96M (10-Q, filed July 29, 2026). Residential revenue grew 38.7%.
- The largest holder trimmed. The 10-K put its stake near 33.8% at December 31, 2025, before a Form 144 notice of proposed sale on May 7, 2026 and the 31.7% amendment in June.
- Builders are under pressure. Lennar, the kind of buyer that takes St. Joe homesites, reported net income down 52.0% for the quarter to August 31, though its East region grew 4.4% (10-Q, filed October 2, 2026).
The bull case on St. Joe
- The asset cannot be copied. Entitled coastal acreage on this scale does not come to market.
- The backlog nearly doubled. 1,992 homesites under contract at the end of 2025, worth about $143.5M, against 1,074 a year earlier, while national builders cut back.
- Recurring income now leads. Hospitality is half of segment revenue and grew 14.6% in the first half, smoothing lumpy lot sales.
- Capital goes back to holders. Dividends rose every year, to $33.6M in 2025.
Even if annual lot absorption doubles from current levels, the company possesses more than forty years of permitted residential inventory.
Investor D, Buy, on the runway
That is a real moat, and the kind that tends to last.
Investor A, Watch, on the land itself
The bear case on St. Joe
- The screen yield is flattered. It leaves out $23.8M of 2025 spending on operating property, plus $7.8M put into joint ventures.
- Earnings have one good year in them. Net income sat between $70.9M and $77.7M from 2022 to 2024 before $115.6M in 2025. Investor B's five-year average of $82.6M puts the market cap at 47.1 times it.
- Contract value per homesite fell. The backlog implies about $72,000 a homesite at the end of 2025 against about $95,000 a year earlier, on the analyst's arithmetic.
- Everything sits on one coast. The company self-insures some risks and names higher insurance costs for buyers as a headwind in Item 1A.
My judgment: the relevant distinction is between valuable land and distributable cash.
Investor B, Avoid
The bull case rests on a free cash flow figure that likely omits the very spending that produces the growth.
Investor A, Watch, naming its weakest link
Where the committee splits
One Buy, one Watch, one Avoid: each voting seat landed somewhere different. All three named Gulf storms and coastal insurance among the environments that matter, so the hurricane is not what divides them.
Is the 38.7% free cash flow margin real?
| Position | Seats | The figure it rests on |
|---|---|---|
| Overstated | A, B | Capex $4.06M against D&A of $47.5M (sheet) |
| Real, capital light | D | Trailing capex $4.51M on $547.84M of revenue (sheet) |
The seats saw only the sheet's capex line. The $108.1M and $23.8M figures come from the 10-K MD&A, read after the vote.
What settles it. Capex for operating property in the September 10-Q, due by November 9, 2026. A nine-month figure above $17.9M, three quarters of the 2025 level, says last year was not a one-off.
From the chair, to Investor D. Your Buy assumes capex near $4.51M. With $108.1M spent in 2025, what does your $235M base case become if development spending grows with revenue?
Is 2025 a new base or a peak?
| Position | Seats | The figure it rests on |
|---|---|---|
| A peak | B | Net income $70.9M to $77.7M in 2022 to 2024 (sheet) |
| A new base | D | 1,992 homesites under contract against 1,074 (10-K) |
| Between | A | Growth of 8% to 14.8% a year, its own range |
What settles it. Homesites under contract at December 31, 2026, in the 2026 10-K. Investor D's thesis breaks below 1,200, Investor A's below 1,074.
From the chair, to Investor B. Which filed figure, short of an appraisal, would show the earnings base has moved beyond your five-year average, and would 2,000 homesites under contract be it?
From the chair, to Investor A. Does your entry yield apply to operating cash flow less operating-property capex, about $167M for 2025, or to the sheet's $186.6M?
| Investor | Verdict | What breaks its thesis |
|---|---|---|
| A | Watch 6 | Isaias impairment or uninsured losses above $50M in the September 10-Q, or homesites under contract below 1,074, moves it to Avoid. Critical environment: coastal storms and insurance. |
| B | Avoid 8 | Cash below 1.0x principal due within a year, in the September 10-Q. Critical environment: housing demand with affordable financing, which could move it toward Watch. |
| C | No response | No vote and no stated breakers. |
| D | Buy 7 | Homesites under contract below 1,200, or trailing operating cash flow below $120M through 2027. Insurance costs that trigger builder cancellations move it to Avoid. |
Valuation
What the price requires. This is our arithmetic, and the seats did not see it. We discount at the 10-year yield plus 4.5 points, 9.6%, with 3% growth after year ten. On the sheet's trailing free cash flow of $212.29M the market cap needs 3.0% to 7.2% a year across discount rates of 8.6% to 10.6%. That base omits operating-property capex, so we rerun it on 2025 operating cash flow less the $23.8M, or $166.9M. There the price needs 6.1% a year at 8.6%, 8.4% at 9.6% and 10.5% at 10.6%, putting year-three free cash flow at $199M to $225M. The rest of this section uses the adjusted band. Counting $253.01M of net debt, the adjusted figure is 4.0% of enterprise value. Our review of FUN made a similar adjustment.
Hatched rows show the adjusted hurdle at each discount rate; the others show each seat's probability-weighted figure. On the unadjusted base the band is $232M to $261M and all three seats sit below it.
| Investor | Bear | Base | Bull | Weighted, year 3 | Against the price |
|---|---|---|---|---|---|
| A | 25%, about $100M | 50%, $205M to $240M | 25%, $300M to $340M | $216M | inside the band |
| B | 30%, $44M | 50%, $107M | 20%, $162M | $99M | below the band |
| C | no response | ||||
| D | 25%, $85M | 50%, $235M | 25%, $340M | $224M | inside the band |
Ranges as the seat gave them; the weighted column takes their midpoint. Investor B's figures are 2028 owner earnings with all depreciation charged as maintenance, a stricter base. The company gives no numeric guidance.
Two seats sit inside the band and one far below it. Investor D's weighted figure barely clears the lowest hurdle, so its Buy leans on the bull case. Investor A sits inside the band and still holds at Watch, and says why: "Where I stop is price, and the quality of the cash flow figure."
| Investor | Entry discipline |
|---|---|
| A | A free cash flow yield of 7.5% or more, about 13x, on a figure that shows real estate spending |
| B | 8.4x verified normalised earnings or less |
| C | No response |
| D | A free cash flow yield above 6.5%, or under 15x free cash flow |
Comparables
| Company | Market cap | Growth last FY | Operating margin | P/E | FCF yield |
|---|---|---|---|---|---|
| St. Joe (JOE) | $3.9B | 27.4% | 28.5% | 31.7x | 5.5% |
| Forestar (FOR) | $1.3B | 5.8% | n/a | 7.7x | 21.6% |
| Howard Hughes (HHH) | $4.1B | -15.8% | 22.5% | 14.0x | n/a |
| Lennar (LEN) | $18.3B | -3.5% | n/a | 14.0x | 4.4% |
Each company's SEC filings and current share price, computed the same way for every row. FCF yield uses each filer's own capex line, so St. Joe's row is unadjusted.
St. Joe alone grew last year, and trades at more than twice any peer's earnings multiple. Howard Hughes, the closest owner of master-planned land with hotels attached, saw revenue fall. Five Point is left out because two share classes leave its market cap undefined.
Key risks
Ranked by the desk. Raised by names who put the risk on record.
| Risk | Why it matters | Raised by | First signal |
|---|---|---|---|
| High. Storm damage on one coast | Partial self-insurance and no Isaias estimate | 10-K Item 1A; Analyst; Investors A, B, D | Casualty losses in the September 10-Q |
| High. Insurance cost for buyers | The critical environment for two seats | 10-K Item 1A; Investors A, D | Homesites under contract at year end |
| Medium-high. Builder concentration in a slowdown | A few builders buy most homesites | 10-K Item 1A; Analyst; Investor B | Homesites under contract below 1,200 |
| Medium. Free cash flow overstated | Operating-property capex sits outside the screen figure | Desk arithmetic; Analyst; Investor A | Operating-property capex in the September 10-Q |
| Medium. One joint venture | Over a fifth of pre-tax income from one project | 10-K; Analyst; Investors A, D | Its share below 10% in the 2026 10-K |
| Medium. Controlling holder | It can sway a sale and filed to sell in May | 10-K; Analyst | Further 13D amendments |
| Medium. Land prices may not hold across the acreage | Recent sales may not represent wetland acres | forum (unverified); Investor B | Per-acre sale disclosures |
| Low. Refinancing | $60.65M due within a year against $117.31M of cash | Investor B; Analyst | Cash below 1.0x near-term principal |
What to watch
| Date | Event | What it decides |
|---|---|---|
| November 9, 2026 | 10-Q for the September quarter, SEC deadline | Isaias losses against Investor A's $50M; cash against near-term principal; operating-property capex |
| March 1, 2027 | 10-K for 2026, SEC deadline | Homesites under contract against 1,074 and 1,200; the joint venture's share of pre-tax income |
| Ongoing | Schedule 13D amendments, SEC EDGAR | Whether the controlling stake keeps shrinking |
Owning it onchain
Neither xStocks nor Backpack lists a tokenized version of St. Joe, in a snapshot dated October 15, 2026.
Data
| Item | Figure | Source |
|---|---|---|
| Market cap | $3.89B | $68.41 close, October 16, 2026 (Yahoo Finance), times 56,930,451 shares (SEC EDGAR cover, July 27, 2026) |
| 2025 operating cash flow | $190.70M | 10-K, SEC EDGAR |
| Net debt, cash only | $253.01M | 10-Q, June 30, 2026; investments not counted |
Method. Four investors with different philosophies, each on a different AI model, read one identical fact sheet and voted independently. A name needs three Buys to enter a basket. How the committee works.
As of October 18, 2026, BagsCapital manages no outside capital and holds no position in St. Joe. Nothing here is investment advice.