Investors Real Estate (IRET:NYS) Fundamental Valuation Report


Fundamental Valuation Report

Investors Real Estate(IRET:NYS)

Real Estate:REIT-Residential

This Report was generated using the valuation tools available on StockCalc.com. For a free 30 day trial click here.

Close Price/Date
$53.78 (USD) 08/01/2019

Weighted Valuation
$70.00 (USD)

Overall Rating
Undervalued by 30.2%

Valuation Models Analyst Consensus: $70.00 (USD)
(in order of importance)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Overvalued on a Comparable Valuation
Asset: Undervalued on an Asset Valuation

Company Overview (IRET:NYS USD)

Price 53.78
Range 52.79 – 54.10
52 week 46.50 – 59.80
Open 52.79
Vol / Avg. 110485/116727
Mkt cap 643.8M
P/E 0.00
Div/yield 2.80/0.05
EPS 8.70
Shares 11.97M
Beta 0.77

Company Description

Investors Real Estate Trust is a real estate investment trust (REIT). It is focused on the ownership, management, acquisition, development, and redevelopment of apartment communities. The company operates in a single reporting segment that is a Multifamily segment.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for IRET:NYS

Using a discounted cash flow model we generated an intrinsic value of ($210.92) (USD) for IRET:NYS

Comparables Model

Using similar companies and price based ratios we generated a valuation of $30.84 (USD) for IRET:NYS. We also generated a valuation of $29.82 (USD) using other metrics and comparables.
The comparable companies were Preferred Apartment (APTS:NYS), ARMOUR Residential REIT (ARR:NYS), Independence Realty Trust (IRT:NYS) and New York Mortgage Trust (NYMT:NAS).

Company IRET:NYS End Date Value
Earnings/Share $8.90 (USD)
Book Value/Share $40.68 (USD)
Sales/Share $13.36 (USD)
Cash Flow/Share $3.56 (USD)
EBITDA/Share $6.64 (USD)
Price Based on Comps Adjustment Factor (%)
$0.00 (USD) 0.0
$34.78 (USD) -41.8
$47.14 (USD) -35.2
$7.05 (USD) -11.0
$81.60 (USD) -32.9
IRET:NYS Ratios Used Average Values APTS:NYS ARR:NYS IRT:NYS NYMT:NAS
0.00 PE Ratio 19.52 0.00 5.39 45.90 7.27
1.21 PB Ratio 0.85 0.38 0.72 1.30 1.02
3.67 PS Ratio 3.53 1.47 3.18 4.30 5.17
13.80 PCF Ratio 16.79 4.29 14.43 11.88 36.55
14.47 EV to EBITDA 12.28 12.25 5.96 18.63 0.00

Multiples

Using a multiples approach we generated a valuation of  $176.64 (USD) for IRET:NYS

Company IRET:NYS End Date Value
Earnings/Share $8.90 (USD)
Book Value/Share $40.68 (USD)
Sales/Share $13.36 (USD)
Cash Flow/Share $3.56 (USD)
EBITDA/Share $6.64 (USD)
Price Based on Comps Adjustment Factor
$606.54 (USD) 0
$69.03 (USD) 0
$51.44 (USD) 0
$40.25 (USD) 0
$115.95 (USD) 0
Ratios Ratio Average
PE Ratio 68.15
PB Ratio 1.70
PS Ratio 3.85
PCF Ratio 11.32
EV to EBITDA 17.45

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  IRET:NYS for the last 10 years was  1.70

We ran the Adjusted Book Value for  IRET:NYS and generated a book value of  $49.07 (USD)
By multiplying these we get an adjusted valuation of  $83.50 (USD)

Analyst Data

In the Stockcalc database there are 1 analysts that provide a valuation for IRET:NYS. The 1 analysts have a concensus valuation for IRET:NYS for 2020 of $70.00 (USD).

IRET:NYS Investors Real Estate

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
1 1 0 4.0000 Outperform 2019-1-7

Current Price: 53.78 USD

Analyst Consensus
USD Millions 2019
Mean EPS 0.21
# EPS Analysts 1
Mean Revenue 186.10
# Revenue Analysts 2
Mean Target Price
Mean Cash Flow 3.82
Mean EBITDA 93.50
Mean Net Income 2.80
Mean Debt Outstanding
Mean Tax Rate
Mean Growth Rate
Mean Capital Expenditure 3,318.00

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

Notice to User


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