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Invitation Homes Inc. (INVH) Intrinsic Value

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

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Invitation Homes Inc. (INVH)

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Intrinsic Value (DCF)

Current$27.06
→
Intrinsic$47.83
+77%
$28.41$47.83$84.70
Market implies 11% growth for 5 years
DCF analysis suggests INVH could have 77% upside at 22% growth — verify assumptions match your view.
At $27, the market prices in 11% annual cash flow growth — a moderate expectation aligned with historical trends (22%).
Range: Bear $28 → Bull $85. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →18%20%22%24%
8%$61$68$74$81
10%$39$43$48$53
12%$27$30$33$37
14%$19$22$24$27

Bull Case

  • Bull case ($85) offers 213% upside at 27% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (11%) ≤ historical CAGR (22%)

Bear Case

  • Bear case ($28) with 18% growth, 12% discount rate
  • Using 22% growth — aggressive, watch for mean reversion
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5-Year FFO Projection

Year 1$1.43B
Year 2$1.75B
Year 3$2.14B
Year 4$2.62B
Year 5$3.20B
Terminal$47.11B

📐 Model Inputs

Growth Rate22.3%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base FFO$1.17BTTM 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 INVH stock undervalued or overvalued?
🟢 UNDERVALUED

INVH trades at $27.06 vs. our DCF-derived intrinsic value of $42.65, implying +52% upside. At a 10.0% WACC and 22.3% projected FCF growth, the market appears to be underpricing the present value of INVH's future cash flows. The bear case ($23.47) still suggests upside, providing margin of safety.

What is INVH's intrinsic value?

Using a 5-year DCF model: Base FCF of $1.17B, projected at 22.3% 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 $8.03B net debt and dividing by 0.61B shares: Bear $23.47 | Base $42.65 | Bull $70.89. Current price $27.06 implies +52% to base case.

How is INVH's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 22.3% 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 ($34.20B).

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.