Is Fermi’s Steep 2025 Share Price Slide Creating a Long Term Opportunity for Investors

• If you are wondering whether Fermi is a bargain or a value trap after its recent slide, you are not alone. This article will unpack what the current share price is really offering investors.
• The stock has been hit hard lately, falling about 33.4% over the last week and 53.6% over the last month, leaving it down roughly 69.0% year to date and firmly on value hunters’ radars.
• Recent moves have been driven by shifting sentiment around the real estate backdrop and tighter financing conditions, which have made investors more cautious about smaller, growth oriented property names like Fermi. At the same time, sector wide volatility and a rotation away from riskier assets have amplified every headline, making price swings more dramatic than underlying fundamentals might suggest.
• Right now, Fermi scores just 1 out of 6 on our valuation checks, indicating that only one of our standard metrics currently flags it as undervalued. However, headline scores never tell the full story. Next, we will walk through the different valuation approaches we use and then explore a more complete way to think about what Fermi might be worth.

Fermi scores just 1/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Fermi Dividend Discount Model (DDM) Analysis

The Dividend Discount Model estimates what a stock should be worth today by projecting all future dividends and discounting them back to a present value. It is especially useful for income focused investors who care about the reliability and growth of payouts over time.

For Fermi, the model starts with an annual dividend per share of $0.27 and assumes that dividends grow at about 3.3% a year, in line with the risk free rate rather than aggressive company specific growth. There is no explicit return on equity or payout ratio input, so the focus is squarely on whether Fermi can at least sustain and slowly grow its current dividend stream.

Under these assumptions, the DDM arrives at an intrinsic value of roughly $5.66 per share. Compared with the current market price, this implies the stock is about 78.4% overvalued. This suggests investors are paying far more than the model indicates the existing dividend profile justifies.

Result: OVERVALUED

Our Dividend Discount Model (DDM) analysis suggests Fermi may be overvalued by 78.4%. Discover 907 undervalued stocks or create your own screener to find better value opportunities.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Fermi.

Approach 2: Fermi Price vs Book

For real estate investment trusts like Fermi, the price to book (P/B) ratio is a natural valuation tool because the business is asset heavy and book value gives a reasonable starting point for what the underlying property portfolio is worth. In broad terms, faster growing, less risky REITs can justify paying a higher multiple of book value, while slower growth or higher risk names should trade closer to, or even below, book.

Fermi’s current P/B is not available, but we can still frame expectations using benchmarks. The broader Specialized REITs industry trades at about 1.64x book value, while Fermi’s more direct peers are on a richer 3.31x on average, which implies that investors are usually willing to pay a premium for the group’s growth and asset quality. Simply Wall St’s proprietary Fair Ratio goes a step further by estimating what P/B a company should trade on after accounting for its specific growth outlook, risk profile, profitability, industry and size, rather than just copying whatever peers trade at.

Because Fermi’s current P/B cannot be reliably compared with this Fair Ratio yet, we cannot draw a firm conclusion from this method alone, and the multiple based view remains inconclusive for now.

Result: ABOUT RIGHT

PB ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1448 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Fermi Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, a simple framework that lets you attach a clear story to your numbers by explaining why you think Fermi’s revenue, earnings and margins will evolve in a certain way and what that implies for fair value. A Narrative connects three pieces together: the business story you believe, the financial forecast that flows from that story, and the fair value estimate that those forecasts support. On Simply Wall St’s Community page, used by millions of investors, Narratives are easy to create and compare. This helps you quickly see whether your fair value is above or below today’s share price so you can decide whether Fermi looks like a buy, a hold, or a sell. Because Narratives update dynamically when new news, earnings, or guidance is released, your view of Fermi can adapt in real time rather than staying locked to an outdated model. For example, one investor might see Fermi’s fair value far below the current price due to weak growth assumptions, while another might set a much higher fair value based on a faster recovery and improving margins.

Do you think there's more to the story for Fermi? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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