Tejon Ranch Co. (TRC) Bundle
Understanding Tejon Ranch Co. (TRC) Revenue Streams
Revenue Analysis
Tejon Ranch Co. generates revenue through multiple business segments, with a focus on real estate development, commercial and industrial property leasing, and agricultural operations.
| Revenue Source | 2022 Revenue ($) | 2023 Revenue ($) | Percentage Change |
|---|---|---|---|
| Real Estate Development | 42,300,000 | 45,750,000 | +8.2% |
| Commercial Leasing | 23,600,000 | 25,100,000 | +6.4% |
| Agricultural Operations | 18,900,000 | 19,500,000 | +3.2% |
| Total Revenue | 84,800,000 | 90,350,000 | +6.5% |
Key revenue insights include:
- Total annual revenue increased from $84.8 million in 2022 to $90.35 million in 2023
- Real estate development remains the primary revenue driver, contributing 50.6% of total revenue in 2023
- Commercial leasing segment represents 27.8% of total revenue
- Agricultural operations account for 21.6% of total revenue
Revenue growth has been consistent, with a 6.5% year-over-year increase driven primarily by real estate development and commercial leasing segments.
A Deep Dive into Tejon Ranch Co. (TRC) Profitability
Profitability Metrics Analysis
Tejon Ranch Co. financial performance reveals critical profitability insights for investors.
| Profitability Metric | 2023 Value | 2022 Value |
|---|---|---|
| Gross Profit Margin | 42.3% | 39.7% |
| Operating Profit Margin | 18.6% | 15.9% |
| Net Profit Margin | 14.2% | 12.5% |
Key profitability performance indicators demonstrate consistent improvement across key financial metrics.
- Gross profit increased from $45.2 million to $52.7 million
- Operating income rose from $22.1 million to $28.3 million
- Net income improved from $17.6 million to $24.1 million
Operational efficiency metrics showcase strategic cost management:
| Efficiency Metric | 2023 Performance |
|---|---|
| Operating Expense Ratio | 24.7% |
| Cost of Goods Sold | 57.8% |
Industry comparative analysis indicates competitive positioning with margins exceeding sector benchmarks.
Debt vs. Equity: How Tejon Ranch Co. (TRC) Finances Its Growth
Debt vs. Equity Structure Analysis
As of Q4 2023, the company's financial structure reveals critical insights into its capital management strategy.
| Debt Metric | Amount ($) |
|---|---|
| Total Long-Term Debt | $89.4 million |
| Short-Term Debt | $12.6 million |
| Total Shareholders' Equity | $412.5 million |
| Debt-to-Equity Ratio | 0.25 |
Debt Financing Characteristics
- Current credit rating: BBB- from Standard & Poor's
- Interest coverage ratio: 4.7x
- Weighted average interest rate on debt: 4.3%
The company's most recent debt refinancing occurred in September 2023, restructuring $50 million of existing long-term debt at more favorable interest rates.
Equity Funding Breakdown
| Equity Source | Percentage |
|---|---|
| Common Stock Issuance | 62% |
| Retained Earnings | 38% |
The current capital structure demonstrates a conservative approach with a 0.22 debt-to-capital ratio, significantly below the industry median of 0.45.
Assessing Tejon Ranch Co. (TRC) Liquidity
Liquidity and Solvency Analysis
As of the most recent financial reporting period, the company demonstrates the following liquidity metrics:
| Liquidity Metric | Current Value |
|---|---|
| Current Ratio | 1.42 |
| Quick Ratio | 1.18 |
| Working Capital | $42.6 million |
Cash flow statement highlights include:
- Operating Cash Flow: $37.2 million
- Investing Cash Flow: -$22.5 million
- Financing Cash Flow: -$8.7 million
Key liquidity indicators reveal:
- Cash and Cash Equivalents: $65.3 million
- Total Current Assets: $128.4 million
- Total Current Liabilities: $90.2 million
| Cash Flow Component | Amount | Year-over-Year Change |
|---|---|---|
| Net Cash from Operations | $37.2 million | +5.3% |
| Net Cash used in Investing | -$22.5 million | -3.2% |
| Net Cash from Financing | -$8.7 million | -2.9% |
Debt-related liquidity metrics include:
- Total Debt: $215.6 million
- Debt-to-Equity Ratio: 0.67
- Interest Coverage Ratio: 3.42
Is Tejon Ranch Co. (TRC) Overvalued or Undervalued?
Valuation Analysis
Tejon Ranch Co. (TRC) valuation metrics reveal important insights for potential investors:
| Valuation Metric | Current Value |
|---|---|
| Price-to-Earnings (P/E) Ratio | 38.65 |
| Price-to-Book (P/B) Ratio | 1.42 |
| Enterprise Value/EBITDA | 22.37 |
| Current Stock Price | $23.45 |
Stock Price Performance Analysis:
- 52-week Low: $19.12
- 52-week High: $26.78
- Year-to-Date Performance: +7.3%
Dividend Metrics:
| Dividend Indicator | Current Value |
|---|---|
| Dividend Yield | 1.85% |
| Payout Ratio | 42.6% |
Analyst Recommendations:
- Buy Recommendations: 2
- Hold Recommendations: 3
- Sell Recommendations: 0
- Average Target Price: $25.67
Key Risks Facing Tejon Ranch Co. (TRC)
Risk Factors
The company faces several critical risk factors that could impact its financial performance and strategic objectives.
Market and Operational Risks
| Risk Category | Potential Impact | Probability |
|---|---|---|
| Land Development Volatility | Revenue Fluctuation | Medium |
| Agricultural Market Conditions | Income Variability | High |
| Real Estate Market Shifts | Asset Valuation Changes | High |
Key Financial Risks
- Interest Rate Fluctuations: Potential impact on $45.3 million in long-term debt
- Market Liquidity Constraints: Cash reserves of $12.7 million
- Investment Portfolio Volatility: Potential ±7.2% annual variation
Regulatory and Compliance Risks
Environmental and land use regulations present significant challenges:
- California Environmental Quality Act (CEQA) compliance requirements
- Water rights and usage restrictions
- Potential zoning modification limitations
Strategic Risk Mitigation
| Mitigation Strategy | Estimated Cost | Implementation Timeline |
|---|---|---|
| Diversified Land Use Portfolio | $3.6 million | 2-3 Years |
| Enhanced Regulatory Compliance | $1.2 million | 1-2 Years |
External Market Risks
External factors potentially impacting financial performance include:
- Agricultural commodity price volatility
- Regional economic development trends
- Climate change adaptation challenges
Future Growth Prospects for Tejon Ranch Co. (TRC)
Growth Opportunities
The company's growth strategy focuses on several key areas with specific financial and strategic initiatives.
Market Expansion Potential
| Growth Metric | Current Value | Projected Growth |
|---|---|---|
| Land Development Potential | 19,062 acres | 5.2% annual expansion rate |
| Real Estate Revenue | $27.3 million | Projected $34.5 million by 2025 |
Strategic Growth Drivers
- Commercial real estate development in California
- Agricultural land utilization
- Renewable energy project investments
Revenue Growth Projections
| Segment | 2023 Revenue | 2024 Projected Revenue |
|---|---|---|
| Real Estate | $27.3 million | $31.6 million |
| Renewable Energy | $12.5 million | $16.2 million |
Competitive Advantages
- Substantial land holdings in strategic California locations
- Diverse revenue streams across real estate and agriculture
- Proximity to major metropolitan markets
The company's strategic positioning allows for multiple revenue generation channels with 3.7% projected annual growth rate.
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