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    Digital Realty Trust (DLR) Stock Still Looks Undervalued Despite Its 64% Run

    Simply Wall St·10/02/2026 19:19:14
    語音播報

    Digital Realty Trust has delivered a strong multi year share price run, which raises a straightforward question for investors who care about fundamentals. Is the current US$176.49 price tag aligned with the cash flows the data center landlord is expected to generate over time?

    • The stock has gained 64.1% over the past 3 years. That puts real pressure on the question of whether those returns are backed by the underlying cash flow stream.
    • The planned Los Angeles cable landing station that aims to link subsea and terrestrial networks from 2028 may support future connectivity driven demand, but it can also influence the timing and scale of cash outlays before additional rental income shows up.
    • If you'd rather focus on earnings, this one's for you. See why Digital Realty Trust's 86.3x P/E tells a different valuation story.

    For investors, the debate is whether Digital Realty Trust's current share price is justified by its cash flows when viewed through an intrinsic value lens based on Discounted Cash Flow.

    If you want a wider set of ideas built around similar cash flow questions, a focused stock screen is a useful next step. You can start with 90 AI infrastructure stocks.

    Is Digital Realty Trust a Bargain on Cash Flow?

    The Discounted Cash Flow (DCF) model here uses Digital Realty Trust's adjusted funds from operations as a proxy for free cash flow to equity. On that basis, the latest twelve month free cash flow sits at about $2.27b, with analyst and model projections pointing to growing cash flows over the coming decade rather than a shrinking stream.

    Those higher projected cash flows, once discounted back, support an estimated intrinsic value that the DCF suggests is substantially above the current US$176.49 share price. The planned Los Angeles cable landing station, which is still several years from expected operation, helps explain why the market may be cautious even though the model leans on rising cash generation and not just near term rental income. Find out what Digital Realty Trust could be worth using our Discounted Cash Flow (DCF) estimate.

    The Digital Realty Trust Narrative: What Would Justify Today's Price?

    Narratives for Digital Realty Trust pick up where a single DCF output leaves off by explaining which paths for revenue growth, margins and earnings would need to occur for the stock to be worth materially more or materially less than today. Instead of one valuation line, you see the underlying story that number rests on, so you can track how Digital Realty Trust's actual progress aligns over time, and these are available on Simply Wall St's Community page.

    One of the top community narratives on Digital Realty Trust: 21% undervalued

    "Digital Realty's record signed but not yet commenced lease backlog of about US$1.9b, plus a further US$410m of hyperscale leases signed in July, points to a large pipeline of contracted revenue..."

    Discover why this Narrative puts Digital Realty Trust at 21% undervalued.

    Digital Realty Trust's valuation still leaves one crucial issue unresolved

    Price and cash flows tell only part of the story for Digital Realty Trust, because the research checks also highlight specific concerns that informed investors usually weigh before committing fresh capital. Take a closer look at 2 warning signs (1 major) before settling on a valuation.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.