DLR
Digital Realty Trust, Inc.$176.19
Buy
Target $261.01
Report: Mar 13, 2026Real Estate • REIT - Office • Asset-Based OperatorSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$176.19+48.1%
Rec: BuyConviction: High
Entry Target
$176.19
(0% above current)
Fair Value
$261.01
(48% above current)
Stop Loss
$21.92
(88% below current)
Position Size
Full
Time Horizon
Strategic
Key Metrics
Live Snapshot
Market Data
52 Week High$184.79
52 Week Low$129.95
Avg. 3 Month Volume2.03M
Efficiency
LTM Gross Margin59.0%
LTM EBITDA Margin60.1%
LTM EBIT Margin29.1%
LTM Operating Margin10.8%
LTM ROA2.6%
LTM ROE5.6%
LTM ROIC3.4%
LTM ROCE3.7%
Capital Structure
Market Cap (MM)$61.9B
Enterprise Value (MM)$78.1B
Shares Outstanding343.53M
Total Debt (MM)$19.66B
Cash & Equivalents (MM)$3.45B
LTM Net Debt (MM)$16.20B
LTM Net Debt/EBITDA4.4x
Growth
TTM Rev. Growth10.0%
Last 3-Yr Rev. CAGR9.2%
Last 3-Yr EBITDA CAGR17.1%
Last 3-Yr EPS CAGR47.0%
Valuation
Street Target Price$190.27
LTM EV/Revenue12.8x
LTM EV/Gross Profit21.7x
LTM EV/EBIT43.9x
LTM EV/EBITDA21.3x
LTM P/E48.8x
LTM EV/FCF91.9x
LTM P/FCF72.8x
LTM P/TB1.6x
LTM P/B2.7x
Dividend Yield2.7%
Payout Ratio130.1%
Executive SummarySituation: Current price is $176.19 versus fair value $261.01 (48.1% expected return), and valuation confidence is stable. Debate: Bull case depends on Backlog Conversion and Capacity Delivery Digital Realty entered 2026 with a record backlog of nearly 1.4B. Bear case centers on Power Grid Constraints Persistent delays in power availability in primary markets like Northern Virginia and Europe could prevent the company from delivering its 769 MW construction pipeline on schedule, leading to revenue misses. Conclusion: Recommendation is Buy with Full sizing and Strategic horizon.
Bull Case
AI-driven demand is creating a multi-year tailwind, reflected in a record 1.4B backlog and 17.7% incremental ROIC on new investments. The company's access to 15B in private capital dry powder allows it to scale without further straining the balance sheet.
Bear Case
High capital intensity is outpacing revenue growth, leading to persistent dilution and a low overall ROIC of 2.5%, which is currently below the 9.5% WACC. Power grid constraints in key markets like Northern Virginia could delay capacity delivery and cap growth.
Key Catalysts
Mid-Term (6-18 months)Impact: Critical
Backlog Conversion and Capacity Delivery Digital Realty entered 2026 with a record backlog of nearly 1.4B. As the 769 MW currently under con...
Near-Term (0-6 months)Impact: High
Private Capital Deployment The company has 15B in private capital dry powder through its hyperscale fund and JVs. Utilizing this capital to...
Long-Term (18+ months)Impact: Moderate
Digital Realty is at a critical juncture as it begins to harvest the massive investments made in AI-ready infrastructure, with 2026 guidance...
Primary Risks
Concern: Medium
Power Grid Constraints Persistent delays in power availability in primary markets like Northern Virginia and Europe could prevent the compan...
Concern: Medium
Capital Intensity and Dilution If the company cannot successfully transition to its private-capital funding model, it may be forced to conti...
Concern: Medium
The stewardship verdict is strong, supported by a board with deep REIT expertise. Chairman Mary Hogan Preusse previously managed a 13B REIT...
Recent Activity
2024-10-25SEC Filing (8-K)
+9.62%Digital Realty reports Q3 2024 financial results with record leasing activity and raised 2024 outlook
2024-02-16SEC Filing (8-K)
-8.34%Digital Realty reports Q4 2023 results and introduces 2024 financial outlook
2023-07-28SEC Filing (8-K)
+6.63%Digital Realty Trust reported Q2 2023 financial results with net income of $0.37 per share and updated 2023 Core FFO outlook to $6.55-$6.65.
2022-12-14SEC Filing (8-K)
-5.81%Digital Realty appoints Andy Power as CEO, replacing Bill Stein effective immediately
2022-09-13Market Movement
-5.19%Market/Sector Move -5.19%
Valuation Table
7.9/10Decision Grade