INVH
Invitation Homes Inc.
$26.80
Real Estate Investment Trust
85%
P/FFO × Residential REIT Multiple
Strong
·
Conviction
Undervalued
Trading 57.5% below fair value
You pay
$26.80
Bear
$53.25
Fair
$63.01
Bull
$72.77
Bear
$53.25
+98.7%
$2.26 FFO × 21x
Fair
$63.01
+135.1%
$2.26 FFO × 25x
Bull
$72.77
+171.5%
$2.26 FFO × 29x
Adjust Assumptions
24.7x
$
Key Value Driver
FFO/share ($2.26) × residential P/FFO multiple
Implied Market Multiple
11.9x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (34 analysts)
$31.67
Divergence from AlphaVal
99%
Summary
At $2.26 FFO/share with a 25x residential REIT multiple, the base-case value is $63.01 per share. Dividend yield: 4.5%. DDM cross-check: $79.78.
Warnings
Standard profit figures are misleading for real estate companies — large non-cash accounting charges make profits look artificially low. Dividend yield and funds from operations are better measures.
Dividend-based valuation: $79.78 (27% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $31.67 (from 34 analysts). Our estimate is 99% above the consensus -- consider that gap carefully.
Key Risks
- P/E and EV/EBITDA are structurally wrong for REITs — use P/FFO and NAV
- Interest rate sensitivity: REIT multiples compress when rates rise
- FFO approximation (NI + D&A) may include gains on property sales — verify