Digital Realty (DLR) AI Stock Analysis

• Market Cap: $58.76B
• Dividend Yield: 2.8%
• Average Volume (3M): 1.63M
• Price to Earnings (P/E): 162.2
• Beta (1Y): 0.86
• Revenue Growth: 2.96%
• EPS Growth: -68.06%
• Country: US
• Employees: 3,936
• Sector: Real Estate
• Sector Strength: 66
• Industry: REIT - Office
• EPS (TTM): 0.27
• Shares Outstanding: 336,791,500
• 10 Day Avg. Volume: 1,656,137
• 30 Day Avg. Volume: 1,633,428
• PEG Ratio: -0.95
• Price to Book (P/B): 1.63
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -29.19
• Enterprise Value/Market Cap: 0.79
• Enterprise Value/Revenue: 2.11
• Enterprise Value/Gross Profit: 17.44
• Enterprise Value/Ebitda: 4.53
• 1Y Price Target: $189.06
• Price Target Upside: 7.38% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 18

• Rating: 76 Outperform
• Price Target: $189.00 ▲(7.35%Upside)

Digital Realty's stock score reflects its strong financial performance, positive earnings call, and technical momentum. The company shows robust revenue growth and operational efficiency, with a solid outlook from recent leasing and strategic initiatives. However, high valuation metrics and market volatility present potential risks.

Positive Factors

AI and Sector Demand

The AI explosion and demand windfall, along with pricing power remaining firm, have allowed Digital Realty Trust to capitalize on overall sector demand.

Customer Ecosystem

Digital Realty boasts one of the most interconnected ecosystems, serving over 5,000 customers and facilitating more than 200,000 total interconnections within its facilities.

Financial Performance

Strong 1Q25 results and 2025 guidance increased with results beating both BofA and Street estimates on Core FFO/sh and adj. EBITDA.

Negative Factors

Customer In-sourcing

Hyperscale cloud providers – the largest existing tenants of data centres – may opt to move all or significant data centre servers in-house.

Foreign Exchange Risk

There is a foreign exchange rate risk as around 45% of Digital Realty's revenue is contributed by markets outside of the domestic market.

Digital Realty Business Overview & Revenue Model

Company Description

Digital Realty supports the world's leading enterprises and service providers by delivering the full spectrum of data center, colocation and interconnection solutions. PlatformDIGITALR, the company's global data center platform, provides customers a trusted foundation and proven Pervasive Datacenter Architecture PDxTM solution methodology for scaling digital business and efficiently managing data gravity challenges. Digital Realty's global data center footprint gives customers access to the connected communities that matter to them with more than 284 facilities in 48 metros across 23 countries on six continents.

How the Company Makes Money

Digital Realty makes money primarily through leasing data center space and providing related services to customers. Their revenue model is based on long-term contracts with customers who pay for space, power, and cooling within Digital Realty's facilities. Additionally, the company generates income from interconnection services, which allow customers to connect their infrastructure to cloud providers and other network resources. They also benefit from partnerships with technology companies and service providers, enhancing their offerings through collaborative solutions. The company's earnings are influenced by factors such as the growing demand for cloud services, digital transformation across industries, and the increasing need for data storage and processing capabilities.

Digital Realty Financial Statement Overview

Summary

Digital Realty demonstrates steady revenue growth and strong operational margins, crucial for sustaining its business model in the REIT sector. While profitability ratios have shown some decline, the company's balance sheet remains stable with moderate leverage. The cash flow statement indicates strong cash generation capabilities, essential for ongoing operations and investments.

Income Statement

Digital Realty has shown consistent revenue growth with a 2.35% increase from the previous year to the TTM period. The gross profit margin for TTM is robust at 47.49%, but the net profit margin has decreased to 2.69%, indicating rising costs or other expenses affecting net income. EBIT and EBITDA margins are strong at 12.66% and 47.91% respectively, reflecting operational efficiency.

Balance Sheet

The debt-to-equity ratio is 0.86, suggesting a balanced use of debt and equity, which is typical for REITs. The equity ratio of 47.23% indicates a solid capital structure. However, the return on equity has declined to 0.71% in TTM, reflecting lower profitability on shareholder investments.

Cash Flow

Operating cash flow has increased slightly over the period, supporting a strong operating cash flow to net income ratio of 15.21, indicating efficient cash generation relative to net income. The free cash flow has decreased, but the company maintains a positive free cash flow to net income ratio of 10.89, showing adequate cash generation.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
5.63B	5.55B	5.48B	4.69B	4.43B	3.90B
	Gross Profit
2.67B	3.04B	2.88B	2.69B	2.67B	2.40B
	EBIT
712.62M	471.86M	524.46M	589.97M	694.01M	557.53M
	EBITDA
2.70B	1.87B	3.16B	2.24B	2.25B	2.04B
	Net Income Common Stockholders
151.72M	602.49M	948.84M	377.68M	1.71B	356.40M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.32B	3.87B	1.63B	141.77M	142.70M	108.50M
	Total Assets
45.08B	45.28B	44.11B	41.48B	36.37B	36.08B
	Total Debt
18.30B	18.01B	18.97B	18.07B	14.96B	14.77B
	Net Debt
15.98B	14.14B	17.34B	17.93B	14.82B	14.66B
	Total Liabilities
21.90B	22.11B	23.12B	21.86B	17.85B	17.59B
	Stockholders Equity
21.30B	21.34B	19.12B	17.58B	18.00B	17.72B
Cash Flow		Free Cash Flow
1.65B	2.26B	1.63B	-983.71M	-818.54M	-472.14M
	Operating Cash Flow
2.31B	2.26B	1.63B	1.66B	1.70B	1.71B
	Investing Cash Flow
-2.82B	-1.91B	-1.12B	-4.70B	-1.06B	-2.60B
	Financing Cash Flow
1.86B	2.06B	963.47M	2.97B	-590.63M	935.69M

Digital Realty Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 176.06
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DLR, the sentiment is Positive. The current price of 176.06 is above the 20-day moving average (MA) of 171.96, above the 50-day MA of 161.57, and above the 200-day MA of 163.83, indicating a bullish trend. The MACD of 3.68 indicates Positive momentum. The RSI at 68.43 is Neutral, neither overbought nor oversold. The STOCH value of 53.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DLR.

Digital Realty Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EQIX	78 Outperform	$86.88B	92.28	7.08%	2.10%	6.36%	-3.54%
DLR	76 Outperform	$58.76B	162.19	2.14%	2.80%	2.96%	-68.06%
SBAC	69 Neutral	$24.73B	30.46	-14.67%	1.95%	-0.29%	47.83%
IRM	69 Neutral	$29.97B	247.60	-35.81%	3.09%	11.04%	-37.29%
DBRG	67 Neutral	$1.91B	32.25	10.58%	0.39%	-56.43%	-82.25%
Sector *	61 Neutral	$2.84B	10.78	0.41%	6.09%	6.01%	-21.16%
CCI	51 Neutral	$42.84B	33.81	-198.54%	4.32%	-12.57%	-375.80%

Digital Realty Corporate Events

Digital Realty’s Subsidiary Offers Euro-Denominated Notes

On June 17, 2025, Digital Dutch Finco B.V., a subsidiary of Digital Realty, initiated an offering of Euro-denominated Guaranteed Notes, which are senior unsecured obligations guaranteed by Digital Realty Trust, Inc. and its operating partnership. The proceeds from this offering are intended for various corporate purposes, including repaying borrowings, acquiring properties, and funding development opportunities, aligning with Digital Realty’s strategy to maintain its REIT status and enhance its operational capabilities.

The most recent analyst rating on (DLR) stock is a Buy with a $205.00 price target. To see the full list of analyst forecasts on Digital Realty stock, see the DLR Stock Forecast page.

Digital Realty Holds Annual Stockholders Meeting

On June 6, 2025, Digital Realty Trust, Inc. held its Annual Meeting of Stockholders where several proposals were voted on. The stockholders elected directors to serve until the 2026 meeting, ratified KPMG LLP as the accounting firm for 2025, approved executive compensation on an advisory basis, and approved an amended employee stock purchase plan. A stockholder proposal regarding the human right to water was not approved.

The most recent analyst rating on (DLR) stock is a Buy with a $205.00 price target. To see the full list of analyst forecasts on Digital Realty stock, see the DLR Stock Forecast page.

Digital Realty Releases Q1 2025 Financial Results

On April 24, 2025, Digital Realty announced its financial results for the quarter ending March 31, 2025, through a press release and supplemental information available on its website. This announcement provides insights into the company’s financial performance and strategic positioning in the data center industry, which is crucial for stakeholders to assess the company’s operational health and future growth prospects.