Digital Realty Trust, Inc. (DLR)
Valuation Overview•Is Digital Realty Trust, Inc. Overvalued or Undervalued?
Market price has outpaced base-case intrinsic cash flows, pricing in significant future growth optimism.
Moderate quality score of 55/100, reflecting stable operating margins and manageable leverage.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
Verdict: Average quality business weighed down by significant profitability concerns.
Wall Street is broadly bullish, projecting solid upside. This is paired with healthy capital returns, anchored by a strong, well-covered dividend yield.
DLR struggles with subpar profitability and pressured margins. However, the balance sheet carries elevated leverage, requiring careful monitoring of debt servicing capabilities.
The company demonstrates solid revenue growth (9.2% 3Y CAGR) paired with highly explosive earnings growth (47.7% EPS 3Y CAGR). Operating efficiency remains adequate with margins around 13.7%.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $1.7B | +10.0% | +9.2% | +9.4% | +13.2% | |
| EBITDA | $798.4M | — | +5.6% | — | — | |
| Net Income | $98.6M | +117.2% | +51.3% | — | +20.4% | |
| EPS (Diluted) | $0.25 | +122.4% | +47.7% | +29.1% | +8.7% | |
| Free Cash Flow | $719.0M | +523.0% | — | — | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 40.0% | 54.2% | 55.9% | 59.5% |
| Operating Margin | 13.7% | 9.6% | 11.4% | 15.0% |
| Net Margin | 21.1% | 16.5% | 19.2% | 16.4% |
| FCF Margin | 3.8% | -1.8% | -9.0% | -5.7% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $0.44 | $0.46 | +4.2% | ||
| Q1'26 | $0.29 | $0.24 | -16.5% | ||
| Q4'25 | $1.78 | $1.89 | +6.2% | ||
| Q3'25 | $1.74 | $1.87 | +7.5% | ||
| Q2'25 | $1.73 | $0.27 | -84.4% | ||
| Q1'25 | $0.27 | $0.51 | +88.9% | ||
| Q4'24 | $1.67 | $1.67 | +0.0% | ||
| Q3'24 | $1.63 | $1.65 | +1.2% |
Total return is +9.3% (1Y), lagging the benchmark by -15.7%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +22.9% | +13.6% | — |
| 1Y | +9.3% | -15.7% | +2.8% |
| 3YCAGR | +24.6% | +4.8% | +14.0% |
| 5YCAGR | +6.6% | -6.3% | +15.7% |
| 10YCAGR | +8.6% | -5.1% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Digital Realty Trust, Inc. (DLR) valuation, health, and returns.
Digital Realty Trust, Inc. is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Fair versus peers compared to industry peers. overvalued (implying -32.0% downside from DCF intrinsic value of $127.97)
Digital Realty Trust, Inc. has multiple valuation anchors: DCF Intrinsic Value: $127.97 | Peer Relative Fair Value: $197.97 | Wall Street Analyst Target: $208.92 (implying +11.0% upside). A convergence of these signals offers higher conviction.
Digital Realty Trust, Inc. displays fair financial health with a composite quality score of 55/100, supported by a Piotroski F-Score of 7/9, Return on Invested Capital (ROIC) of 1.2%.
Digital Realty Trust, Inc. pays a 2.6% dividend yield, covered by a 132% payout ratio with 0 years of growth, supplemented by a 0.0% buyback yield.
Digital Realty Trust, Inc.'s current growth trajectory is Stable. The company achieved +10.0% 1Y revenue growth and +122.4% 1Y EPS growth, compared to its 3Y revenue CAGR of +9.2%.
Wall Street consensus is Buy based on 48 analysts, beating EPS expectations in 58% of recent quarters with a 1-quarter streak. The consensus price target represents a +11.0% change from current levels.
Investment risks for Digital Realty Trust, Inc. include: -17.8% 1-year max drawdown, stretched payout ratio. Volatility risk is characterized by a beta of 0.83x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.