Investors, Stay Informed – Key Updates on Digital Realty Trust

Digital Realty Trust shares fell by -1.3% during the day's morning session, and are now trading at a price of $141.66. Is it time to buy the dip? To better answer that question, it's essential to check if the market is valuing the company's shares fairly in terms of its earnings and equity levels.

Digital Realty Trust's Valuation Is in Line With Its Sector Averages:

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. The company belongs to the Real Estate sector, which has an average price to earnings (P/E) ratio of 25.55 and an average price to book (P/B) ratio of 2.1. In contrast, Digital Realty Trust has a trailing 12 month P/E ratio of 39.1 and a P/B ratio of 2.42.

When we divide Digital Realty Trust's P/E ratio by its expected EPS growth rate of the next five years, we obtain its PEG ratio of -7.27. Since it's negative, the company has negative growth expectations, and most investors will probably avoid the stock unless it has an exceptionally low P/E and P/B ratio.

Increasing Revenues but Narrowing Margins:

2018 2019 2020 2021 2022 2023
Revenue (M) $3,046 $3,209 $3,904 $4,428 $4,692 $5,477
Operating Margins 18% 19% 14% 16% 13% 10%
Net Margins 11% 18% 9% 39% 8% 17%
Net Income (M) $331 $580 $356 $1,709 $378 $949
Net Interest Expense (M) $322 $353 $333 $294 $299 $438
Depreciation & Amort. (M) $1,187 $1,164 $1,366 $1,487 $1,578 $1,695
Diluted Shares (M) 207 209 263 283 298 309
Earnings Per Share $1.21 $2.35 $1.0 $5.94 $1.11 $3.0
EPS Growth n/a 94.21% -57.45% 494.0% -81.31% 170.27%
Free Cash Flow (M) $60 $77 -$358 -$819 -$984 -$1,891
CAPEX (M) $1,325 $1,437 $2,064 $2,521 $2,643 $3,526
The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.