Tanger Inc. (SKT): A Bear Case Theory

We came across a bearish thesis on Tanger Inc. (SKT) on Twitter by blondesnmoney. In this article, we will summarize the bears’ thesis on SKT. Tanger Inc. (SKT)'s share was trading at $29.93 as of May 1^st. SKT’s trailing and forward P/E were 35.21 and 32.15 respectively according to Yahoo Finance.

Tanger Inc. (SKT) currently trades at a premium valuation compared to its outlet and mall REIT peers, with a multiple of around 14x funds from operations (FFO), despite having once been considered a laggard in the sector. This high valuation is largely attributed to its low leverage, which stands in stark contrast to peers like Simon and Macerich that carry substantial parent-level debt. However, while the conservative balance sheet is a clear strength, Tanger’s portfolio is seen as relatively undistinguished—superior to lower-tier operators like CBL, but far from the high-end quality of Simon. The disconnect lies in the valuation differential, with CBL now trading at under 4x FFO, suggesting an extreme spread that may not be sustainable, particularly if the broader mall sector faces renewed pressure. In such a scenario, even well-capitalized players like Tanger would likely experience material downside, calling into question the justification for its elevated multiple. While Tanger benefits from investor preference for low-risk profiles, its underlying asset quality and sector exposure suggest it may be overvalued relative to more distressed but potentially mispriced peers.

Tanger Inc. (SKT) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 20 hedge fund portfolios held SKT at the end of the fourth quarter which was 23 in the previous quarter. While we acknowledge the risk and potential of SKT as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than SKT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.