$11.88
$39.66
bear $11.88
base $23.35
bull $39.66
margin of safety $12.00
market price* $68.41
St. Joe owns about 165,000 acres in Northwest Florida and earns money four ways: selling finished homesites to homebuilders in communities such as Watersound Origins and Latitude Margaritaville Watersound (about 2,190 of 3,700 planned homes sold); selling commercial and timberland parcels; operating hospitality assets (1,053 hotel rooms, the Watersound Club with 3,594 members, golf courses, beach clubs and marinas); and leasing commercial and apartment property ($63.6 million of leasing revenue in 2025). The Bay-Walton Sector Plan entitles the company to develop over 170,000 homes and 22 million square feet of commercial space, against homesite sales of 752 to 1,063 a year over 2022-2025 (911 in 2025), so land supply is not the constraint for decades. How we measure the cash the business produces: operating cash flow, less stock compensation, less swings in working capital (including the timing gap between money spent developing real estate for sale and the cost of the lots sold, which added about $20 million to 2025 cash flow), less our estimate of the spending needed just to keep existing hotels, clubs and buildings in service (about $22 million in 2025; the company does not disclose this, so we use actual equipment spending plus 5% of hospitality revenue and 12% of leasing revenue). The roughly $800 million of new hotels, golf, apartments and commercial buildings built in 2018-2025 is treated as growth spending, not upkeep; it peaked at $252 million in 2022 and was under $20 million in 2025. On that basis, cash earnings per share were $0.34-$0.68 in 2017-2020 (before the build-out matured), $1.54 in 2021, $1.10 in 2022, $1.14 in 2023, $1.64 in 2024 and $2.45 in 2025. 2025 includes a one-time cash distribution of about $19 million from the sale of the Watercrest senior-living property, which we exclude as non-recurring. Because lenders are paid first, we value the business before interest and then subtract what it owes. Cash from the business before interest (excluding the self-funding timber-note structure described below and the interest earned on excess cash, which we count as cash instead) was about $88 million in 2023, $121 million in 2024 and $142 million in 2025 excluding the one-time item. We start from about $118 million a year, the middle of 2023-2025. We did not use 2022 and earlier because that was either before the new assets opened or the peak build year. We did not raise the level for 2025's record residential profit ($81.5 million, versus $54.8 million in 2024) or for the first half of 2026 (net income $54.4 million versus $47.0 million, operating cash flow $86.2 million versus $60.1 million): the first quarter of 2026 was weaker than a year earlier, so one strong quarter does not yet show a new level. If the 2025 level proves to be the norm, our base value would be near $29 rather than $23. Growth reconciliation: this measure grew about 21% in 2025 (excluding the one-time item); we assume 0% growth from our starting level in year 1 and beyond. The new golf course (opened November 2024), the renovated Shark's Tooth clubhouse (reopened February 2025), membership additions (118 net in 2025) and lease escalators could add to earnings, but we credit none of it because further growth depends on pricing, mix and in-migration that are not locked in. What the company owes (June 30, 2026): debt of $374.8 million, almost all of it project-level loans secured by specific properties, including HUD-insured fixed-rate loans (3.0%-5.0%, maturing 2058-2064), a $39.9 million loan refinanced in September 2025 at 6.1% to 2035, and a $49.8 million Pier Park hotel loan due April 2027 (floating rate, swapped to 3.2% on most of it, guaranteed by the company and its partner, which we assume is refinanced at rates like the 6.1% obtained last year). Less $87 million of the $117 million of cash (we keep $30 million for operations), plus the minority partners' $8.5 million interest in consolidated ventures, plus $22.5 million, the present value of the tax bill due in 2029 on the 2014 timberland sale ($45.6 million deferred until the installment note matures, less the $20 million left after the separate timber-note structure repays its $180 million of notes; that structure's other assets and liabilities offset each other). Total claims ahead of shareholders: about $319 million, or $5.59 per share on 57.0 million shares. Bear case, $11.88 per share: the business is worth about $996 million ($17.47 per share), it owes about $319 million ($5.59 per share), leaving $11.88. The story is a Florida housing bust of the 2008-2011 kind, when statewide home construction fell by roughly 80 percent, arriving in year 2. Real estate sale profits (about $81 million a year recently) fall 80% and hospitality and leasing profit (about $102 million in 2025) falls 25% as members, visitors and tenants thin out; after tax that cuts business cash flow from $118 million to about $95 million in year 1 and about $50 million in years 2-4, still 2.3 times the roughly $22 million of annual cash interest. It recovers to $90 million by year 8, not back to today's level because insurance and property-tax costs, already flagged as pressures in the company's risk disclosures after the 2018 Hurricane Michael damage, stay higher. It holds to year 20, then fades to zero by year 30. Base case, $23.35 per share: the business is worth about $1,649 million ($28.94 per share), it owes about $319 million ($5.59), leaving $23.35. Cash flow of about $118 million a year is held flat for 25 years and then fades to zero over the following 15. What keeps it going: entitlements for 170,000 homes against roughly 900 homesites sold a year, a record of about 900 homesites a year through 2022-2025 with profit ranging from $48.7 million to $81.5 million, built hotels, clubs and buildings whose upkeep is already charged in our cash figure, and leases already signed. We credit no growth. Bull case, $39.66 per share: the business is worth about $2,579 million ($45.25 per share), it owes about $319 million ($5.59), leaving $39.66. Cash flow starts at the 2025 level of about $142 million and grows 3% a year for nine years to about $185 million (lease escalators, continued membership additions and homesite pricing like 2025's $137,000 average, versus $108,000 in 2024), holds there to year 30 and fades to zero by year 50. How we arrived at a margin-of-safety price of $12.00: we are only moderately sure of the earnings level, because homesite profit has swung by $33 million between years, hospitality margin moved from 19.8% in 2023 to 31.1% in 2025 as the new assets opened, and 2025 was a record. The worst plausible outcome is a Florida housing bust coinciding with a Gulf hurricane; the structure would survive it: debt is mostly project-level and non-recourse, the trough cash flow covers interest 2.3 times, there is $117 million of cash, and the only notable maturity before 2029 is the $49.8 million hotel loan. If we are wrong about homesite profit and hospitality margin so that cash flow is 20% below our starting level, the base value falls to about $17.50. The price assumes a holding period of about five years, during which the company pays a dividend ($0.58 per share in 2025) and repurchases stock ($40 million in 2025, $38 million in the first half of 2026). The $12.00 price is roughly what the bear case is worth, and if the base case plays out, value plus cash returned reaches about $31 per share in five years, which implies about 21% a year; that is the price at which the 20% target does not depend on the bull case. Estimates from earlier analyses were built on a different basis and are not comparable.