ADC Stock Risk & Deep Value Analysis
Agree Realty Corp
DVR Score
out of 10
What You Need to Know About ADC Stock
We analyzed Agree Realty Corp using our deep value framework. Sign in to see our full verdict and DVR Score.
We ran ADC through our deep value framework — analyzing financial health, distress signals, competitive moat, and risk factors. Our risk assessment: Conservative. Here's what we found.
ADC Risk Analysis & Red Flags
What Could Go Wrong
The biggest risk for ADC is a sustained increase in interest rates, which would raise its cost of capital for acquisitions and reduce the attractiveness of REITs compared to bonds, potentially impacting property valuations and the stock's multiple. Additionally, a significant downturn in the broader retail sector or bankruptcies of its major tenants could negatively affect rental income.
Risk Matrix
Overall
Conservative
Financial
Low
Market
Medium
Competitive
Low
Execution
Low
Regulatory
Low
Red Flags
- ⚠
Significant share dilution from ATM offerings without proportional AFFO per share growth.
- ⚠
A sustained decline in cap rates on new acquisitions, indicating less accretive growth.
- ⚠
An unexpected increase in tenant defaults or a decline in occupancy rates from 99.7%.
Upcoming Risk Events
- 📅
Unfavorable shifts in interest rates, increasing cost of capital
- 📅
Major bankruptcies or store closures among key tenants
- 📅
General economic slowdown impacting consumer spending and retail performance
When to Reconsider
- 🚪
Exit if AFFO per share growth turns negative YoY for two consecutive quarters.
- 🚪
Sell if net debt/recurring EBITDA (pro forma) exceeds 6.0x.
- 🚪
Exit if the monthly dividend is cut or paused.
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Investment Thesis
Agree Realty Corp (ADC) represents a high-quality, stable income-generating investment within the REIT sector. Its disciplined strategy of acquiring and developing single-tenant net lease retail properties, primarily with investment-grade tenants, ensures predictable cash flows and a growing monthly dividend. The company's strong balance sheet and proven execution allow for continued accretive portfolio expansion, positioning it for long-term, consistent total returns, albeit not the explosive 10x growth targeted by this analysis.
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ADC Price Targets & Strategy
12-Month Target
$88.00
Bull Case
$95.00
Bear Case
$70.00
Valuation Basis
Based on 19.5x forward AFFO multiple applied to $4.55 (midpoint) est. FY26 AFFO per share = $88.73.
Entry Strategy
Consider dollar-cost averaging in the $72-$76 range, particularly if the stock approaches its recent lows or shows strong support around these levels.
Exit Strategy
Take profit at $90-$95. Set a stop loss at $70 to protect capital against unexpected market shifts or interest rate headwinds.
Portfolio Allocation
3-5% for a moderate risk tolerance, reflecting its stability as an income-generating asset rather than a speculative growth play.
Price Targets & Strategy
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Is ADC Financially Healthy?
Valuation
P/E Ratio
44.88
Forward P/E
10.28
EV/EBITDA
16.20
PEG Ratio
2.68
Price/Book
2.41
Price/Sales
10.80
Profitability
Gross Margin
88.03%
Operating Margin
47.38%
Net Margin
28.44%
Return on Equity
3.49%
Revenue Growth
16.42%
EPS
$1.84
Balance Sheet
Current Ratio
0.82
Quick Ratio
0.82
Debt/Equity
0.53
Total Debt
$2.41B
Cash & Equivalents
$126.94M
Cash Flow
Operating Cash Flow
$391.60M
Free Cash Flow
-$882.95M
EBITDA
$466.50M
Other
Beta (Volatility)
0.51
Dividend Yield
4.20%
Does ADC Have a Competitive Moat?
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🛡️ Narrow
Moat Trend
Stable
Moat Sources
2 Identified
ADC's moat stems from its efficient scale in acquiring and managing a large, diversified portfolio of properties, allowing it to access favorable debt financing and achieve operational efficiencies. Its cost advantage in capital raises and property sourcing contributes to its ability to make accretive investments. This moat is durable as long as the company maintains its disciplined acquisition strategy and access to capital.
Moat Erosion Risks
- •Increased competition for high-quality net lease assets, driving down cap rates.
- •Significant rises in interest rates that diminish the cost advantage of scale.
- •A prolonged downturn in the retail sector that impacts tenant creditworthiness and rental income.
ADC Competitive Moat Analysis
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ADC Market Intelligence
Sentiment & Insider Activity
Social Sentiment
Neutral. While dividend income is appreciated, the lack of explosive growth potential typically limits strong retail investor 'bullish' sentiment, especially for a 10x target.
Institutional Sentiment
Positive. Q1 earnings beat and reiterated guidance are viewed favorably, reflected in recent analyst price targets between $82 and $90. No analyst downgrades noted.
Insider Activity (Form 4)
No specific Form 4 filings reporting CEO/CFO or other significant insider buying/selling activity in the last 90 days (February 4–May 4, 2026).
Options Flow
Normal options activity. No significant unusual put or call volume reported indicating extreme institutional positioning.
Earnings Intelligence
Next Earnings
Estimated July 2026
Surprise Probability
Medium
Historical Earnings Pattern
Historically, ADC tends to react positively to earnings beats, especially with strong AFFO growth and continued dividend increases. Guidance updates often drive price movement more significantly than historical results.
Key Metrics to Watch
Competitive Position
Top Competitor
Realty Income Corp (O)
Market Share Trend
Gaining. ADC is actively growing its portfolio through accretive acquisitions and development, expanding its footprint across all 50 states, suggesting a gradual increase in market share within the fragmented net lease retail sector.
Valuation vs Peers
ADC often trades at a slight premium or in line with its direct peers like Realty Income or National Retail Properties (NNN) due to its strong balance sheet, high investment-grade tenant percentage, and consistent growth strategy. Its current AFFO multiple of ~16.7x (based on current price and midpoint FY26 guidance) is competitive.
Competitive Advantages
- •Diversified portfolio of predominantly investment-grade retail tenants, reducing credit risk.
- •Strong balance sheet and liquidity position, enabling accretive acquisitions.
- •Expertise in identifying and executing high-quality net lease property investments and developments.
Market Intelligence
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What Could Drive ADC Stock Higher?
Near-Term (0-6 months)
- •Q2 2026 Earnings report (expected July 2026)
- •Continued accretive property acquisitions at favorable cap rates
- •Dividend increases, reinforcing income stability
Medium-Term (6-18 months)
- •Further portfolio diversification and expansion across states
- •Completion of current development/DFP projects (total costs ~$112M)
- •Positive retail sector performance, boosting tenant health
Long-Term (18+ months)
- •Continued growth in investment-grade tenant base, enhancing portfolio quality
- •Further entrenchment as a leading diversified net lease REIT
- •Potential strategic M&A within the fragmented retail net lease space
Catalysts & Growth Drivers
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What's the Bull Case for ADC?
- ✓
Consistent growth in AFFO per share (mid-single digits or higher).
- ✓
Maintenance of a strong balance sheet (net debt/EBITDA below 5.5x).
- ✓
High occupancy rates and investment-grade tenant composition.
Bull Case Analysis
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How Agree Realty Corp Makes Money
Agree Realty Corp makes money by owning, acquiring, and developing retail properties across the United States, which it then leases to single tenants under long-term, 'net lease' agreements. In a net lease, the tenant is typically responsible for property taxes, insurance, and maintenance costs, minimizing landlord expenses. This model provides stable, predictable rental income for ADC, which it then distributes to shareholders as dividends, retaining a portion for further property investments.
Read Full Business Model BreakdownFAQ
What is the DVR Score for Agree Realty Corp (ADC)?
As of May 4, 2026, Agree Realty Corp has a DVR Score of 2.8 out of 10, placing it in the "Risk Trap" category. This score is generated by our AI-powered deep value analysis framework that evaluates growth potential, financial health, competitive moat, and risk factors.
What is the market capitalization of Agree Realty Corp?
Agree Realty Corp's market capitalization is approximately $9.2B..
What is the risk level for ADC stock?
Our analysis rates Agree Realty Corp's overall risk as Conservative. This assessment considers execution risk, market risk, financial risk, competitive risk, and regulatory risk. For a full breakdown, see the risk analysis section above.
What is the P/E ratio of ADC?
Agree Realty Corp currently has a price-to-earnings (P/E) ratio of 44.9. This is above the market average, suggesting the stock may be priced for high growth expectations.
Does Agree Realty Corp pay a dividend?
Yes, Agree Realty Corp pays a dividend with a current yield of approximately 4.20%.
Is Agree Realty Corp's revenue growing?
Agree Realty Corp has reported revenue growth of 16.4%. The company is showing strong top-line momentum.
Is ADC stock profitable?
Agree Realty Corp has a profit margin of 28.4%. This indicates strong profitability.
How often is the ADC DVR analysis updated?
Our AI-powered analysis of Agree Realty Corp is refreshed regularly to incorporate the latest financial data, market conditions, and news. The most recent update was on May 4, 2026.
Important Disclaimer – Not Financial Advice
Deep Value Reports is an independent research platform for educational and informational purposes only. We are not financial advisors, investment advisors, or licensed professionals. The analysis, scores, and information provided on this page for ADC (Agree Realty Corp) should not be construed as personalized investment advice, a recommendation to buy or sell any security, or an offer to provide investment advisory services.
All investments involve risk, including the potential loss of principal. Past performance does not guarantee future results. Always conduct your own research, consider your financial situation, and consult with a qualified financial advisor before making any investment decisions.