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Digital Realty Trust Inc DLR

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Stock XNYS Rating as of
$144.18 +2.33 (1.64%)
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As of Cboe BZX Real-Time Price Open
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Company Report

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Digital Realty Earnings: Long-Term Trajectory Is Steady Despite Signs of Huge Demand

Matthew Dolgin

Digital Realty posted eye-popping booking and re-leasing spreads during the first quarter, but the heightened levels don’t reflect new norms or change our outlook. Management said that customers’ artificial intelligence needs are behind this quarter’s strength, and we continue to believe the AI phenomenon puts Digital Realty in a great position. However, we are always cautious not to get too high or low in response to notoriously choppy booking results, and even if there were continual demand for much higher bookings, Digital Realty wouldn’t have the capacity to meet it. Our forecast already reflects the very good position we believe Digital Realty is in, and we’re maintaining our $135 fair value estimate.

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Price vs Fair Value

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DLR is trading at a 569% premium.
Price
$141.86
Fair Value
$691.00
Uncertainty
High
1-Star Price
$182.52
5-Star Price
$74.00
Economic Moat
Jntgbfz
Capital Allocation
Mhgfxqljr

Bulls Say, Bears Say

Bulls

Digital Realty's shift toward connection and co-location exposes it to the most attractive parts of the data center business and the growth tailwinds of cloud providers and data connectivity.

Bears

Equinix's foray into hyperscale eliminates Digital Realty's distinction as the biggest data center provider offering a full suite of services, from single cabinets to full, hyperscale data centers.

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Trading Information

Previous Close Price
$141.85
Day Range
$142.46–145.23
52-Week Range
$86.38–154.11
Bid/Ask
$144.15 / $144.21
Market Cap
$46.78 Bil
Volume/Avg
1.2 Mil / 2.3 Mil

Key Statistics

Price/Earnings (Normalized)
199.63
Price/Sales
8.20
Dividend Yield (Trailing)
3.41%
Dividend Yield (Forward)
3.41%
Total Yield
3.44%

Company Profile

Digital Realty owns and operates over 300 data centers worldwide. It has nearly 40 million rentable square feet across five continents. Digital's offerings range from retail co-location, where an enterprise may rent a single cabinet and rely on Digital to provide all the accommodations, to "cold shells," where hyperscale cloud service providers can simply rent much, or all, of a barren, power-connected building. In recent years, Digital Realty has de-emphasized cold shells and now primarily provides higher-level service to tenants, which outsource their related IT needs to Digital. The company operates as a real estate investment trust.
Sector
Real Estate
Industry
REIT - Specialty
Stock Style Box
Mid Core
Total Number of Employees
3,664
Website
https://www.digitalrealty.com

Competitors

Valuation

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Metric
DLR
EQIX
AJBU
Price/Earnings (Normalized)
 199.6377.3419.63
Price/Book Value
 2.446.091.28
Price/Sales
 8.208.9710.52
Price/Cash Flow
 21.9522.3816.66
Price/Earnings
DLR
EQIX
AJBU

Financial Strength

Metric
DLR
EQIX
AJBU
Quick Ratio
 0.660.901.39
Current Ratio
 0.771.101.41
Interest Coverage
 3.343.422.95
Quick Ratio
DLR
EQIX
AJBU

Profitability

Metric
DLR
EQIX
AJBU
Return on Assets (Normalized)
 3.41%4.09%2.76%
Return on Equity (Normalized)
 8.31%10.73%4.72%
Return on Invested Capital (Normalized)
 4.81%5.34%4.12%
Return on Assets
DLR
EQIX
AJBU
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