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Apple Hospitality REIT, Inc. (APLE) Intrinsic Value

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

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Apple Hospitality REIT, Inc. (APLE)

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Intrinsic Value (DCF)

Current$12.43
→
Intrinsic$23.94
+93%
$14.32$23.94$42.22
Market implies 1% growth for 5 years
DCF analysis suggests APLE could have 93% upside at 8% growth — verify assumptions match your view.
At $12, the market prices in only 1% growth — below historical 8%, suggesting low expectations.
Range: Bear $14 → Bull $42. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →4%6%8%10%
8%$30$33$36$40
10%$19$22$24$27
12%$13$15$17$19
14%$10$11$13$14

Bull Case

  • Bull case ($42) offers 240% upside at 10% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (1%) ≤ historical CAGR (8%)

Bear Case

  • Bear case ($14) with 6% growth, 12% discount rate
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5-Year FFO Projection

Year 1$437.04M
Year 2$472.00M
Year 3$509.76M
Year 4$550.54M
Year 5$594.59M
Terminal$8.75B

📐 Model Inputs

Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base FFO$404.67MTTM 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 APLE stock undervalued or overvalued?
🟢 UNDERVALUED

APLE trades at $12.43 vs. our DCF-derived intrinsic value of $23.94, implying +95% upside. At a 10.0% WACC and 8.0% projected FCF growth, the market appears to be underpricing the present value of APLE's future cash flows. The bear case ($15.54) still suggests upside, providing margin of safety.

What is APLE's intrinsic value?

Using a 5-year DCF model: Base FCF of $405M, projected at 8.0% 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 $1.57B net debt and dividing by 0.24B shares: Bear $15.54 | Base $23.94 | Bull $35.16. Current price $12.43 implies +95% to base case.

How is APLE's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 8.0% 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 ($7.35B).

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: 18.2x.