QTS Realty Trust (QTS:NYS) Fundamental Valuation Report

QTS Realty Trust (QTS:NYS) Fundamental Valuation Report

Fundamental Valuation Report

QTS Realty Trust(QTS:NYS)

Real Estate:REIT – Industrial

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

Close Price/Date
$63.11 (USD) 03/30/2021

Weighted Valuation
$70.01 (USD)

Overall Rating
Undervalued by 10.9%

Valuation Models Adjusted Book Value: $68.76 (USD)
(in order of importance) Comparables: $77.41 (USD)
Multiples: $69.32 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Undervalued on an Asset Valuation
According to Analyst consensus at $74.00 this stock is Undervalued

Company Overview (QTS:NYS USD)

Price 63.11
Range 62.93 – 63.75
52 week 57.12 – 72.56
Open 63.01
Vol / Avg. 344073/586560
Mkt cap 4.1B
P/E 603.70
Div/yield 1.88/0.03
EPS -0.47
Shares 64.99M
Beta 0.52

Company Description

QTS Realty Trust Inc is a real estate investment trust involved in the ownership and management of data centers located throughout the United States. The company provides data center solutions and cloud-managed services to customers through its facilities. QTS’ Customer Data Center and Colocation Services business lines, cumulatively, contribute the majority of its total revenue. In each of these, QTS provides its tenants with the services and rental space necessary to house, power, and cool their networking equipment and computer systems. Most of the company’s real estate portfolio is located in the Richmond, Dallas-Fort Worth, and Northeastern Georgia regions in terms of total square footage and rental revenue. Companies in the technology industry represent QTS’ largest source of income.

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 QTS:NYS

Using a discounted cash flow model we generated an intrinsic value of ($19.40) (USD) for QTS:NYS

Comparables Model

Using similar companies and price based ratios we generated a valuation of $77.41 (USD) for QTS:NYS. We also generated a valuation of $64.56 (USD) using other metrics and comparables.
The comparable companies were Industrial Logistics (ILPT:NAS), Terreno Realty (TRNO:NYS), Innovative Industrial (IIPR:NYS), National Storage (NSA:NYS) and Stag Industrial (STAG:NYS).

Company QTS:NYS End Date Value
Earnings/Share ($0.47) (USD)
Book Value/Share $16.45 (USD)
Sales/Share $8.88 (USD)
Cash Flow/Share $4.94 (USD)
EBITDA/Share $3.80 (USD)
Price Based on Comps Adjustment Factor (%)
$0.00 (USD) 0.0
$41.97 (USD) 45.0
$130.93 (USD) -35.4
$82.30 (USD) -15.8
$90.69 (USD) 14.7
QTS:NYS Ratios Used Average Values ILPT:NAS TRNO:NYS IIPR:NYS NSA:NYS STAG:NYS
0.00 PE Ratio 45.03 18.85 50.49 54.05 76.06 25.70
3.84 PB Ratio 2.55 1.55 2.54 2.80 3.83 2.04
7.10 PS Ratio 14.74 6.07 21.36 29.57 6.21 10.47
12.79 PCF Ratio 22.72 13.50 39.51 31.19 12.17 17.22
26.11 EV to EBITDA 23.84 11.86 30.96 42.45 19.23 14.72

Multiples

Using a multiples approach we generated a valuation of  $69.32 (USD) for QTS:NYS

Company QTS:NYS End Date Value
Earnings/Share ($0.47) (USD)
Book Value/Share $16.45 (USD)
Sales/Share $8.88 (USD)
Cash Flow/Share $4.94 (USD)
EBITDA/Share $4.05 (USD)
Price Based on Comps Adjustment Factor
$0.00 (USD) 0
$49.31 (USD) 0
$58.61 (USD) 0
$76.31 (USD) 0
$93.04 (USD) 0
Ratios Ratio Average
PE Ratio 116.10
PB Ratio 3.00
PS Ratio 6.60
PCF Ratio 15.46
EV to EBITDA 23.00

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  QTS:NYS for the last 8 years was  3.01

We ran the Adjusted Book Value for  QTS:NYS and generated a book value of  $22.86 (USD)
By multiplying these we get an adjusted valuation of  $68.76 (USD)

Analyst Data

In the Stockcalc database there are 2 analysts that provide a valuation for QTS:NYS. The 2 analysts have a concensus valuation for QTS:NYS for 2021 of $74.00 (USD).

QTS:NYS QTS Realty Trust

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
1 1 0 4.0000 Outperform 2021-3-29

Current Price: 63.11 USD

Analyst Consensus
USD Millions 2021 2022 2023
Mean EPS 2.70 2.91 3.18
# EPS Analysts 1 1 1
Mean Revenue 607.00 677.00
# Revenue Analysts 1 1
Mean Target Price 74.00
Mean Cash Flow 3.55 4.20 4.45
Mean EBITDA 335.60 374.30 416.60
Mean Net Income 207.70 237.20 274.40
Mean Debt Outstanding 1,867.40 2,076.50 2,301.10
Mean Tax Rate
Mean Growth Rate
Mean Capital Expenditure 749.10 637.70 703.20

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.

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