Now trading at a price of $136.95, Digital Realty Trust has moved 0.5% so far today.
As of April 2023, Digital Realty Trust shares had a 50-day average price of $124.51. Digital Realty brings companies and data together by delivering the full spectrum of data center, colocation, and interconnection solutions. PlatformDIGITAL, the company's global data center platform, provides customers with a secure data "meeting place" and a proven Pervasive Datacenter Architecture (PDx) solution methodology for powering innovation and efficiently managing Data Gravity challenges. Based in Austin, TX, the large-cap Real Estate company has 3,412 full time employees. Digital Realty Trust has returned a 3.6% dividend yield over the last 12 months, but this may not be sustainable seen that the company has a choppy cash flow record.
Increasing Revenues but Narrowing Margins:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (MM) | $3,046 | $3,209 | $3,904 | $4,428 | $4,692 | $5,130 |
| Operating Margins | 18.0% | 19.0% | 14.0% | 16.0% | 13.0% | 12.0% |
| Net Margins | 11.0% | 19.0% | 9.0% | 39.0% | 8.0% | 8.0% |
| Net Income (MM) | $341 | $599 | $367 | $1,747 | $385 | $435 |
| Net Interest Expense (MM) | $322 | $353 | $333 | $294 | $299 | $377 |
| Depreciation & Amort. (MM) | $1,187 | $1,164 | $1,366 | $1,487 | $1,578 | $1,673 |
| Earnings Per Share | $1.21 | $2.35 | $1.0 | $5.94 | $1.11 | $1.27 |
| Diluted Shares (MM) | 207 | 209 | 0 | 0 | 0 | 22 |
| Free Cash Flow (MM) | $60 | $77 | -$358 | -$819 | -$984 | -$1,255 |
| Capital Expenditures (MM) | $1,325 | $1,437 | $2,064 | $2,521 | $2,643 | $2,945 |
| Net Current Assets (MM) | -$12,130 | -$11,634 | -$16,457 | -$16,627 | -$20,292 | -$21,159 |
| Long Term Debt (MM) | $12,443 | $11,955 | $11,997 | $12,903 | $21,124 | $22,493 |
| Net Debt / EBITDA | 7.09 | 6.75 | 6.17 | 5.85 | 9.67 | 9.79 |
Digital Realty Trust has weak operating margins with a negative growth trend, an unconvincing cash flow history, and a highly leveraged balance sheet. On the other hand, the company benefits from growing revenues and increasing reinvestment in the business and positive EPS growth.
Digital Realty Trust's Valuation Is in Line With Its Sector Averages:
Digital Realty Trust has a trailing twelve month P/E ratio of 43.1, compared to an average of 24.81 for the Real Estate sector. Based on its EPS guidance of $1.19, the company has a forward P/E ratio of 104.6. The company doesn't issue forward earnings guidance, and the compound average growth rate of its last 6 years of reported EPS is 0.8%. On this basis, the company's PEG ratio is 53.2, which suggests that it is overpriced. The market is placing a fair value on Digital Realty Trust's equity, since its P/B ratio of 2.38 is comparable to its sector average of 2.24. The company's shares are currently trading -11.8% below their Graham number.
Digital Realty Trust Has an Average Rating of Buy:
The 19 analysts following Digital Realty Trust have set target prices ranging from $97.0 to $145.0 per share, for an average of $127.68 with a buy rating. As of April 2023, the company is trading -2.5% away from its average target price, indicating that there is an analyst consensus of little upside potential.
Digital Realty Trust has an average amount of shares sold short because 6.0% of the company's shares are sold short. Institutions own 103.7% of the company's shares, and the insider ownership rate stands at 0.16%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 16% stake in the company is worth $6,490,176,488.
