A Look At Invitation Homes (INVH) Valuation As Investors Reassess Single Family Rental Stocks

Why Invitation Homes is on investors’ radar today

Invitation Homes (INVH) is back in focus as investors reassess single family rental stocks, with the share price at US$27.72 and recent returns mixed over the past year and past 3 months.

See our latest analysis for Invitation Homes.

The recent 1 month share price return of 2.14% contrasts with a 1 year total shareholder return decline of 7.65%. This suggests interest has been uneven as investors reassess risk and income prospects in single family rentals.

If Invitation Homes has you looking more closely at residential exposure, it can be useful to widen the lens and see how fast growing stocks with high insider ownership compare on momentum and ownership strength.

With Invitation Homes trading at US$27.72 and screening on some tools as at a discount to certain estimates of worth, the key question is whether the current price still underestimates its rental platform or if the market already reflects future growth.

Most Popular Narrative: 19.6% Undervalued

With Invitation Homes at US$27.72 and the most followed fair value estimate around US$34.48, the valuation gap rests on detailed growth and margin assumptions.

The analysts have a consensus price target of $36.886 for Invitation Homes based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $41.0, and the most bearish reporting a price target of just $32.0.

Read the complete narrative.

Curious what is sitting behind that mid US$30s fair value band? Revenue expansion, margin shifts and a higher future earnings multiple all play a part. Want to see how those moving pieces work together in one model?

Result: Fair Value of $34.48 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, softer rent trends in certain markets, along with higher property tax and insurance costs, could pressure margins and challenge the mid US$30s fair value narrative.

Find out about the key risks to this Invitation Homes narrative.

Build Your Own Invitation Homes Narrative

If you look at the numbers and come to a different view, or simply prefer to test your own inputs and assumptions, you can build a custom Invitation Homes story in just a few minutes, starting with Do it your way.

A great starting point for your Invitation Homes research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

Looking for more investment ideas?

If Invitation Homes has sharpened your focus on where your money works hardest, do not stop here, the next idea you shortlist could be the one you remember.

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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.

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