Last Update 10 Mar 26

DBRG: SoftBank Agreement And Underperform Downgrade Will Shape Balanced Outlook

Analysts have reduced their price target on DigitalBridge Group to $16.00, reflecting updated assumptions around discount rates, revenue growth, profit margins, and a lower future P/E multiple after recent research that included a downgrade to Underperform.

Analyst Commentary

Bullish Takeaways

Bullish analysts still see appeal in DigitalBridge Group as a specialized way to get exposure to digital infrastructure, which they view as an area with ongoing structural demand that can support long term capital deployment.
Some highlight that a lower assumed future P/E multiple and higher discount rates are already reflected in the updated US$16.00 target. They see this as incorporating a more conservative stance on execution and growth.
Supportive views focus on management’s ability to source and manage digital assets, with the argument that solid execution on capital allocation could eventually close part of the gap between the current share price and revised valuation work.
Bullish analysts also point to the company’s focused business model. They argue that less diversification can help investors more directly link operating progress to potential changes in earnings power and valuation over time.

Bearish Takeaways

Bearish analysts frame the downgrade to Underperform as a signal that, at current levels, the balance of risk and reward looks less attractive given updated views on discount rates, revenue growth, and profit margins.
There is concern that relying on a lower future P/E multiple reflects reduced confidence that the market will be willing to pay a premium valuation without clearer visibility on consistent execution.
Some are cautious that any slowdown or variability in fundraising and deployment for digital infrastructure could leave earnings and fee growth below what previous targets had implied.
Bearish analysts also question whether DigitalBridge Group can deliver on margin and return objectives quickly enough to justify a higher multiple. This is why they prefer to stay cautious even after the target cut to US$16.00.

What’s in the News

SoftBank Group is reported to be in advanced talks to acquire DigitalBridge, with a potential agreement flagged as soon as Monday, although terms were not disclosed at that stage (Bloomberg).
According to subsequent deal details, SoftBank Group entered into a definitive agreement on December 29, 2025 to acquire DigitalBridge for approximately US$3b, valuing the common stock at US$16.00 per share in cash.
DigitalBridge’s Board, following a unanimous recommendation from a special committee of independent directors, unanimously approved the SoftBank transaction. DigitalBridge is expected to continue operating as a separately managed platform led by CEO Marc Ganzi after closing.
The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close in the second half of 2026, with termination fees of US$96m payable by DigitalBridge and US$154m payable by SoftBank if the deal falls through.
DigitalBridge reported about US$108b in assets under management at the end of September, with a portfolio that includes AIMS, AtlasEdge, DataBank, Switch, Vantage Data Centers, and Yondr Group. Its shares moved 45% after early December news of the SoftBank talks, implying a market value of around US$2.5b and an enterprise value of about US$3.8b at that time.

Valuation Changes

Fair Value: $16.00 per share is unchanged, with the revised work still anchoring on this level as the central estimate.
Discount Rate: The discount rate has edged lower from 8.08% to about 8.02%, indicating a slightly different view of required return.
Revenue Growth: Assumed long term revenue growth has been raised from roughly 74.6% to about 80.4%, pointing to a higher expected growth profile in the model.
Net Profit Margin: Assumed net profit margin has moved up from about 42.2% to roughly 49.8%, implying a stronger earnings mix in the updated assumptions.
Future P/E: The future P/E multiple has been reduced from about 18.2x to roughly 15.0x, reflecting a more conservative stance on the valuation investors might be willing to pay.

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Key Takeaways

Surging demand for data centers and power, especially from AI and cloud trends, underpins strong, recurring revenue growth and long-term expansion opportunities.
Strategic asset diversification, global expansion, and a pure-play focus in digital infrastructure strengthen margins, earnings predictability, and value creation for shareholders.
Competitive pressures, technology risks, challenging funding conditions, and evolving regulations threaten revenue growth, earnings stability, and international expansion prospects.

Catalysts

About DigitalBridge Group

A private equity firm.What are the underlying business or industry changes driving this perspective?

The explosion in AI workloads and hyperscale/cloud CapEx is driving unprecedented demand for data centers and power, fueling a substantial multi-year leasing and development pipeline for DigitalBridge; this supports long-term revenue, FEEUM, and EBITDA growth as the company monetizes these trends through new asset deployment and leasing.
Institutional investor appetite for real assets and digital infrastructure remains robust, reflected in strong fundraising momentum, an expanding private wealth platform, and higher-fee co-investment activity; this accelerates growth in recurring management fee revenue, margin expansion (FRE margin), and overall earnings predictability.
DigitalBridge's strategic focus on building and securing large-scale power capacity (via Takanock and its 21GW power bank) directly addresses the sector's greatest bottleneck, positioning the company to unlock faster build-outs, serve new AI/data center workloads, and capture high-return projects-positively impacting both revenue and operating margins.
Ongoing global geographic expansion (e.g., Yondr acquisition with major projects in North America, Europe, and Asia) and launch of new digital infrastructure platforms diversify the asset base and provide access to higher-growth markets, increasing top-line growth and supporting higher future carried interest and principal investment income.
The company's shift from diversified REIT to pure-play digital infrastructure asset manager, combined with its ability to rapidly scale new funds/strategies and partner with institutional co-investors, enhances operating leverage, raises margins, and builds embedded, long-term value for shareholders through future performance fees and realized carry.

DigitalBridge Group Earnings and Revenue Growth

DigitalBridge Group Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming DigitalBridge Group's revenue will grow by 41.7% annually over the next 3 years.
Analysts assume that profit margins will increase from 1.0% today to 40.0% in 3 years time.
Analysts expect earnings to reach $197.3 million (and earnings per share of $1.4) by about September 2028, up from $1.7 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $477.6 million in earnings, and the most bearish expecting $24.5 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 23.0x on those 2028 earnings, down from 1231.3x today. This future PE is lower than the current PE for the US Capital Markets industry at 26.7x.
Analysts expect the number of shares outstanding to grow by 4.56% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.45%, as per the Simply Wall St company report.

DigitalBridge Group Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Increasing competition from large infrastructure funds, alternative asset managers, and public REITs could compress fees and acquisition yields, ultimately putting pressure on net margins and growth in fee-related earnings (FRE) despite recent fundraising success.
The company's aggressive data center and power buildout exposes it to risks of technological obsolescence (e.g., emerging edge/AI architectures) and tenant churn, which could introduce volatility in occupancy and cash flows, jeopardizing revenue stability and predictability of future earnings.
Prolonged high interest rates or tightening credit markets may raise funding costs and reduce capital inflows into alternative assets, impacting DigitalBridge's ability to deploy capital, achieve return targets, and sustain revenue/AUM growth.
Geopolitical or regulatory headwinds-including investment scrutiny, evolving data privacy laws, and environmental regulations-could hinder international expansion plans, increase compliance costs, and limit growth in key markets, all of which may pressure both revenue and margins.
The private market's carried interest realization is lumpy and dependent on timely exits and high asset valuations; macroeconomic uncertainty or muted asset markets could delay realizations and depress carried interest income, creating less predictable earnings and potential disappointment for shareholders.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $16.5 for DigitalBridge Group based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $20.0, and the most bearish reporting a price target of just $11.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $493.7 million, earnings will come to $197.3 million, and it would be trading on a PE ratio of 23.0x, assuming you use a discount rate of 8.4%.
Given the current share price of $11.23, the analyst price target of $16.5 is 31.9% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

AI Demand And Global Expansion Will Transform Digital Infrastructure