LND

We rate BrasilAgro - Brazilian Agricultural Real Estate Co (LND) as a Reduce with a composite score of 48.6/100 at a current price of $4.10. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.

The rating is primarily driven by strength in stability (73th percentile) and momentum (48th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (28th percentile) and value (42th percentile) tempers our overall conviction. We assign a No Moat rating (28/100), Low uncertainty, and Exemplary capital allocation.

Key items to watch: quarterly earnings execution and sector-level competitive dynamics. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

BrasilAgro - Brazilian Agricultural Real Estate Co holds a mid-tier position (#11 of 17) within the Agriculture, Forestry, And Fishing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 48.6/100 places it at rank #2231 in our full 7,333-stock universe. At $378M in market capitalization, BrasilAgro - Brazilian Agricultural Real Estate Co is a small-cap player in the Agriculture, Forestry, And Fishing space, which limits certain scale advantages but may allow for more agile strategic execution.

Revenue is growing at 14%, though momentum at the 48th percentile suggests the market has not yet fully recognized this trajectory. This potential disconnect between fundamental improvement and market recognition could represent an opportunity for patient investors if the growth trend persists.

The margin cascade tells an important story: gross margins of 29% (+10.4pp vs sector) narrow to operating margins of -17% (-19.4pp vs sector) and net margins of 11.7%, yielding a gross-to-net conversion rate of 41%. This efficient conversion suggests well-controlled operating costs and limited margin leakage between the gross and net levels.

At a current price of $4.10, BrasilAgro - Brazilian Agricultural Real Estate Co is trading near fair value based on current fundamentals. Our value factor score of 42/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at EV/EBITDA of 3.5x (discounted to peers), P/B of 0.5x, P/S of 0.5x. We evaluate these multiples in the context of both absolute levels and sector-relative positioning to form our valuation view.

We assign a Low uncertainty rating to BrasilAgro - Brazilian Agricultural Real Estate Co. The company exhibits strong financial stability with a beta of 0.31, conservative leverage (20% D/E), and a stability factor in the 73th percentile. The predictable nature of the business model and solid financial position reduce the range of potential outcomes, giving us confidence in our fair value estimate.

Specific risk factors that inform our assessment include: low beta of 0.31 — while defensive, this may indicate limited upside participation in bull markets. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 73th percentile and quality factor at the 43th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: conservative leverage (20% D/E) limits balance sheet risk; above-average stability (73th percentile) suggests predictable business dynamics; a 7.29% dividend yield anchors total return. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate BrasilAgro - Brazilian Agricultural Real Estate Co's capital allocation as Exemplary. Management demonstrates a strong track record of balancing reinvestment with shareholder returns, evidenced by disciplined leverage (20% D/E), a 7.29% dividend yield. Exemplary allocators typically generate returns on equity above 20% while maintaining debt-to-equity below 50% — BrasilAgro - Brazilian Agricultural Real Estate Co approaches this high bar.

The balance sheet remains conservatively managed, providing financial flexibility for opportunistic investments while maintaining a margin of safety for shareholders. The company returns capital via a 7.29% dividend yield, and the combination of 14.4% return on assets and controlled leverage suggests management is deploying capital at rates well above the cost of capital — the hallmark of exemplary stewardship.

In summary, BrasilAgro - Brazilian Agricultural Real Estate Co receives a Reduce rating with a composite score of 48.6/100 (rank #2231 of 7,333). Our quantitative framework assigns a No Moat (28/100, trend: stable), Low uncertainty, and Exemplary capital allocation. The average factor score across quality, value, momentum, stability, and investment is 47/100.

Our analysis does not support a constructive view on BrasilAgro - Brazilian Agricultural Real Estate Co at this time. The combination of limited competitive advantages, low uncertainty, and exemplary capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.