SMA
Smartstop Self Storage REIT Inc
$30.98
Real Estate Investment Trust
85%
P/FFO × Specialty REIT Multiple
Moderate
·
Conviction
Undervalued
Trading 30.4% below fair value
You pay
$30.98
Bear
$36.36
Fair
$44.50
Bull
$52.64
Bear
$36.36
+17.4%
$1.80 FFO × 29x
Fair
$44.50
+43.6%
$1.80 FFO × 35x
Bull
$52.64
+69.9%
$1.80 FFO × 42x
Key Value Driver
FFO/share ($1.80) × specialty P/FFO multiple
Implied Market Multiple
17.2x
Summary
Our base-case estimate uses P/FFO × Specialty REIT Multiple. We then blend that result with the average analyst price target of $34.00 from 9 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $44.50 per share.
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.
The 1.7% yield is low for a real estate company — investors are paying up because they expect above-average growth.
Dividend-based valuation: $9.80 (79% below our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $34.00 (from 9 analysts). Our estimate is 39% 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