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Extra Space Storage Inc. (EXR) Intrinsic Value

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

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Extra Space Storage Inc. (EXR)

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Intrinsic Value (DCF)

Current$147.13
→
Intrinsic$168.35
+14%
$95.30$168.35$307.05
Market implies 18% growth for 5 years
EXR appears fairly valued — current price aligns with our DCF estimate.
At $147, the market prices in continued high-teens cash flow growth (18%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $95 → Bull $307. Current price implies expectations below the base case, but well above the bear case.
Discount ↓Growth →16%18%20%22%
8%$219$242$267$293
10%$135$151$168$186
12%$89$101$114$127
14%$60$70$80$90

Bull Case

  • Bull case ($307) offers 109% upside at 24% growth, 9% discount
  • 13% margin of safety vs. base case estimate
  • Market-implied growth (18%) ≤ historical CAGR (20%)

Bear Case

  • Bear case ($95) implies 35% downside at 16% growth, 12% discount
  • Using 20% growth — aggressive, watch for mean reversion
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5-Year FFO Projection

Year 1$1.97B
Year 2$2.37B
Year 3$2.85B
Year 4$3.43B
Year 5$4.13B
Terminal$60.75B

📐 Model Inputs

Growth Rate20.4%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base FFO$1.63BTTM 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 EXR stock undervalued or overvalued?
🟢 UNDERVALUED

EXR trades at $147.13 vs. our DCF-derived intrinsic value of $164.94, implying +22% upside. At a 10.0% WACC and 20.4% projected FCF growth, the market appears to be underpricing the present value of EXR's future cash flows. The bear case ($87.22) still suggests upside, providing margin of safety.

What is EXR's intrinsic value?

Using a 5-year DCF model: Base FCF of $1.63B, projected at 20.4% 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 $12.89B net debt and dividing by 0.21B shares: Bear $87.22 | Base $164.94 | Bull $279.40. Current price $147.13 implies +22% to base case.

How is EXR's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 20.4% 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 ($47.79B).

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.