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Sun Communities, Inc. (SUI) Intrinsic Value

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

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Sun Communities, Inc. (SUI)

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Intrinsic Value (DCF)

Current$127.40
→
Intrinsic$124.25
-2%
$66.35$124.25$234.16
Market implies 21% growth for 5 years
SUI appears fairly valued — current price aligns with our DCF estimate.
At $127, the market prices in continued strong cash flow growth (21%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $66 → Bull $234. Current price implies expectations near the base case.
Discount ↓Growth →17%19%21%23%
8%$164$183$202$223
10%$98$111$124$139
12%$62$71$81$92
14%$39$46$54$62

Bull Case

  • Bull case ($234) offers 84% upside at 25% growth, 9% discount

Bear Case

  • Bear case ($66) implies 48% downside at 17% growth, 12% discount
  • Using 21% growth — aggressive, watch for mean reversion
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5-Year FFO Projection

Year 1$928.73M
Year 2$1.12B
Year 3$1.35B
Year 4$1.63B
Year 5$1.97B
Terminal$28.97B

📐 Model Inputs

Growth Rate20.7%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base FFO$769.70MTTM 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 SUI stock undervalued or overvalued?
🟡 FAIRLY VALUED

SUI trades at $127.40, within 10% of our $119.71 intrinsic value estimate. At 10.0% WACC and 20.7% FCF growth, the market is pricing in assumptions roughly aligned with the 5-year historical CAGR. The valuation range spans $58.76 (bear) to $209.48 (bull).

What is SUI's intrinsic value?

Using a 5-year DCF model: Base FCF of $770M, projected at 20.7% 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 $7.31B net debt and dividing by 0.13B shares: Bear $58.76 | Base $119.71 | Bull $209.48. Current price $127.40 implies -3% to base case.

How is SUI's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 20.7% 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 ($22.53B).

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.