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American Homes 4 Rent (AMH) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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American Homes 4 Rent (AMH)

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Intrinsic Value (DCF)

Current$31.72
→
Intrinsic$71.97
+127%
$44.81$71.97$123.49
Market implies 9% growth for 5 years
DCF analysis suggests AMH could have 127% upside at 25% growth — verify assumptions match your view.
At $32, the market prices in 9% annual cash flow growth — a moderate expectation aligned with historical trends (25%).
Range: Bear $45 → Bull $123. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →21%23%25%27%
8%$92$100$109$119
10%$60$66$72$78
12%$43$47$52$56
14%$32$35$39$42

Bull Case

  • Bull case ($123) offers 289% upside at 30% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (9%) ≤ historical CAGR (25%)

Bear Case

  • Bear case ($45) with 20% growth, 12% discount rate
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year FFO Projection

Year 1$1.11B
Year 2$1.38B
Year 3$1.73B
Year 4$2.16B
Year 5$2.70B
Terminal$39.79B

📐 Model Inputs

Growth Rate25.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base FFO$886.04MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. Uses FFO per NAREIT standards. See FAQ below for full methodology.

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Frequently Asked Questions

Is AMH stock undervalued or overvalued?
🟢 UNDERVALUED

AMH trades at $31.72 vs. our DCF-derived intrinsic value of $57.37, implying +77% upside. At a 10.0% WACC and 25.0% projected FCF growth, the market appears to be underpricing the present value of AMH's future cash flows. The bear case ($33.11) still suggests upside, providing margin of safety.

What is AMH's intrinsic value?

Using a 5-year DCF model: Base FCF of $886M, projected at 25.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $4.83B net debt and dividing by 0.37B shares: Bear $33.11 | Base $57.37 | Bull $93.09. Current price $31.72 implies +77% to base case.

How is AMH's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 25.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($25.94B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.