DLR Fair Value Estimate
$73.2763.5% overvalued
Blended fair value estimate based on DCF, Graham Number, and earnings-based models.
Digital Realty Trust Inc
Exchange: NYSESector: Real EstateIndustry: REIT - Specialty
Digital Realty brings companies and data together by delivering the full spectrum of data center, colocation, and interconnection solutions. PlatformDIGITAL®, the company's global data center platform, provides customers with a secure data meeting place and a proven Pervasive Datacenter Architecture (PDx®) solution methodology for powering innovation, from cloud and digital transformation to emerging technologies like artificial intelligence (AI), and efficiently managing Data Gravity challenges. Digital Realty gives its customers access to the connected data communities that matter to them with a global data center footprint of 300+ facilities in 50+ metros across 25+ countries on six continents.
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A large-cap company with a $69.0B market cap.
Current Price
$200.70
-0.12%GoodMoat Value
$73.27
63.5% overvaluedProfile
Valuation (TTM)
Market Cap$68.96B
P/E51.57
EV$76.82B
P/B3.01
Shares Out343.62M
P/Sales10.88
Revenue$6.34B
EV/EBITDA22.47
Digital Realty Trust Inc (DLR) Valuation
GoodMoat Analysis
Digital Realty Trust appears deeply overvalued from a value investing perspective, trading at a significant premium to its estimated intrinsic value. The current price of $176.43 is 141% above the GoodMoat Target of $73.27, indicating a negative margin of safety. Key valuation multiples are also high relative to its growth and profitability profile.
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Based on the GoodMoat Investment Framework's valuation assessment, Digital Realty Trust's current price of $176.43 is profoundly unfavourable. The GoodMoat Target, which serves as a fair value estimate, is $73.27. This implies the stock is trading at a 141% premium, resulting in a deeply negative margin of safety. According to the framework's bands, any margin of safety below 10% is considered 'Unfavourable,' and this situation is far more extreme. The stock's P/E ratio of 47.8x is exceptionally high, especially for a REIT with an 11.1% revenue growth rate and a 5.7% Return on Equity. This multiple suggests the market is pricing in near-perfect future execution. Furthermore, the Free Cash Flow Yield of 1.4% is low, indicating the price offers minimal compensation in the form of cash generation relative to the investment. While the dividend yield of 2.85% provides some income, it does not offset the extreme valuation premium. For a value investor seeking a margin of safety, the stock fails the critical valuation gate, as the price far exceeds any reasonable estimate of intrinsic value based on the provided data and target. Analysis based on data as of 2024-05-15.
DLR Valuation Metrics
FCF$850.58M
FCF Growth Rate49.26%
EPS Growth (CAGR)14.53%
WACC10.00%
Fair Value Models
Graham Number, PEG-based, and Earnings-based models
View Fair Value →DLR Valuation & Fair Value Analysis
Digital Realty Trust Inc (DLR) valuation analysis using multiple fair value methodologies. GoodMoat calculates a blended fair value target using discounted cash flow (DCF) analysis, the Graham Number, and earnings-based valuation models.
The GoodMoat Fair Value target for Digital Realty Trust Inc is $73.27. The current stock price is $200.70, suggesting the stock is 173.9% overvalued.
The price-to-earnings (P/E) ratio is 51.57. Price-to-book ratio is 3.01. Price-to-sales ratio is 10.88. Enterprise value to EBITDA is 22.47. PEG ratio is 0.81.
GoodMoat's valuation models include the Graham Number (based on EPS and book value), an earnings-based model (discounted future EPS), and a PEG-adjusted valuation. The three models are averaged to produce a blended fair value estimate. Use these tools alongside the DCF calculator and reverse DCF to form a comprehensive view of Digital Realty Trust Inc's intrinsic value.