MAUI LAND & PINEAPPLE CO INC (MLP) stock intrinsic value fair value estimate & owner earnings analysis

Maui Land & Pineapple owns about 22,286 acres on Maui, most of it bought between 1911 and 1932 and carried at almost no cost on its books. It earns money in three ways: leasing commercial, industrial and agricultural land and selling water around the Kapalua Resort and West Maui (leasing revenue was $12.8 million in 2025, including $2.9 million of water sales); running the Kapalua Club amenities; and selling land. Out of that it pays headquarters costs of about $4.5 million a year and stock awards to management and directors of about $4 million a year since 2024, compared with under $1 million a year before 2023. What the record shows. We measure owner earnings as operating cash flow, less working-capital swings, stock compensation and the capital spending needed to keep the business as it is. On that basis MLP earned $29.5 million in 2016, a one-off year in which $35.6 million of land sales were used to cut debt from $40.6 million to $6.9 million. Since then results have swung between +$5.5 million (2017) and -$9.6 million (2025). The median for 2017-2025, a period covering pre-pandemic, pandemic and post-wildfire years and several land-sale cycles, is about -$1.0 million a year (-$0.05 a share). The last three years were the weakest at -$4.2 million, -$8.9 million and -$9.6 million, as stock compensation jumped, the company began paying for its own land development ($1.7 million in 2024 and $4.7 million in 2025), and land sales were thin. Before stock compensation and the now-ended pension contributions, and counting land sold through a joint venture, the 2017-2025 record averaged about +$1.9 million a year. Today's stock compensation alone is about twice that. Accounting judgements. Non-cash items such as the 2025 pension termination charge are added back, but the $1.3 million of cash actually paid into the plan in 2025 is counted as a cost. The plan has now been terminated, so no further contributions are assumed. A $5.0 million tax benefit booked in 2018 and reversed in 2019 is treated as non-cash in both years. The $3.4 million the State of Hawaii paid in 2025 for the Honokeana Homes temporary housing project reimbursed costs at no profit, and it is assumed to stop because the project is on hold at the State's direction. For 2024, the company's own cash-flow reconciliation lines add up to $0.5 million less than its reported operating cash flow; we used the reported total. Base case (-$3.54 a share). Leasing, water and amenities earn about $4.0 million a year before overhead ($4.6 million in 2024, $3.8 million in 2025). No growth is credited because no lease escalation or new tenant is evidenced. Costs are headquarters at $4.5 million, stock compensation at $4.0 million (the first half of 2026 ran at $3.9 million a year), equipment and water-system spending at $1.5 million, and entitlement and development work at $1.5 million. Land sales continue at the 2017-2025 average of about $4.0 million a year, with 85% kept after selling costs. On top of that comes the signed $10.0 million sale of a 6.5-acre Kapalua parcel to Harvest Church, expected to close in 2027. That gives about +$2.2 million in the year the church sale closes and about -$4.2 million a year after that. For comparison, owner earnings in 2025 were -$9.6 million, 8% worse than in 2024. Our first year is better than that only because of the signed church sale, the end of pension payments, and our decision to leave out growth development spending, whose payoff we also do not credit. Discounted at 6%, the business is worth about -$64 million. It owes about $8.7 million: a First Hawaiian Bank revolving line with $8.5 million drawn at June 30, 2026, plus a small equipment loan. Against that it has about $2.3 million of spare cash, so net debt is about $6.4 million. That leaves about -$70 million, or -$3.54 a share. The negative figure does not come from debt, which is small; it comes from a business that, as it is run today, spends more each year than its leases and its actual pace of land sales bring in. Bear case (-$7.15 a share). The last two years repeat. Core income slips to $3.5 million as wildfire-hit tourism keeps percentage rents low. Headquarters costs are $4.7 million, stock compensation $4.8 million (the 2024-2025 average) and equipment spending $2.0 million. Development spending stays at $3.0 million a year for four more years with nothing sold beyond the usual pace. The Harvest Church sale fails its closing conditions, and land sales run at the 2017-2025 median of $1.6 million a year. The business is worth about -$136 million; less $6.4 million of net debt, that is about -$142 million. In this case the yearly shortfall of roughly $8-10 million would use up the remaining $16.5 million of the $25 million credit line, which matures on December 31, 2030, in under two years, forcing faster land sales or the issue of new shares. Bull case ($0.08 a share). Core income holds at the 2024 level of $4.6 million, headquarters costs are $4.3 million and stock compensation eases to $3.5 million. The church sale closes and land sales run at $5.5 million a year, between the 2017-2025 pace and the higher 2016-2025 pace that includes the large 2016 sale. The company is designing a subdivision of the 325-acre Hali'imaile Ranch itself; here its roughly 24 farm lots sell over about 2029-2034 at around $1.5 million each, after $3.0 million a year of development for three years. That price comes from the two nearby Hali'imaile ranch lots its joint venture sold for $1.8 million in December 2024 and $2.4 million in February 2025. The business is worth about +$8 million; less $6.4 million of net debt, that is about +$1.7 million. What would make this wrong. None of these cases values land beyond what the company has actually shown it can sell. MLP still holds entitled resort land at Kapalua Makai and Central (82 acres, being marketed, with entitlements for up to 769 homes and 545 hotel units), the Kapalua Mauka lands (922 acres, entitled for up to 639 homesites), and thousands of agricultural acres. If that land sells much faster than the 2017-2025 pace, or overhead and stock awards fall back toward pre-2023 levels, the value would be far higher. The share price very likely reflects expectations of that kind, but the record does not yet support them. Our estimate is lower than in the previous analysis. The main reason is that three years of higher stock compensation and development spending now define the cost base. This is partly offset by the signed Harvest Church sale and the end of pension payments.