Is StorageVault Canada (TSX:SVI) Overvalued After Its Recent Share Price Rebound?

StorageVault Canada (TSX:SVI) has quietly outperformed the market this year, and with shares up around 23% year to date, investors are starting to revisit its long term self storage growth story.

See our latest analysis for StorageVault Canada.

At a share price of CA$4.86, StorageVault’s 1 day share price return of 1.25 percent and year to date share price return of 22.73 percent suggest momentum is cautiously rebuilding, even though the 3 year total shareholder return remains in negative territory.

If StorageVault’s steady climb has you thinking about what else could surprise to the upside, it might be worth exploring fast growing stocks with high insider ownership as your next hunting ground.

With shares rebounding, modest revenue growth, and analysts still seeing upside to the current price, the key question now is whether StorageVault remains undervalued or if the market is already pricing in its future growth.

Price to Sales of 5.4x: Is it justified?

Based on a price to sales ratio of 5.4 times and a last close of CA$4.86, StorageVault currently screens as expensive versus both peers and its implied fair level.

The price to sales multiple compares the company’s market value with the revenue it generates, which suits StorageVault given its steady, asset heavy self storage business and still developing profitability profile.

Against similar real estate names, StorageVault trades at 5.4 times sales versus a peer average of 5.1 times and a lower Canadian real estate industry average of 2.7 times. Our estimated fair price to sales ratio of 3.8 times suggests the current premium could compress if growth or margins fall short of expectations.

Explore the SWS fair ratio for StorageVault Canada

Result: Price to Sales of 5.4x (OVERVALUED)

However, investors should note that slower revenue growth and persistent net losses could trigger multiple compression if sentiment toward self storage moderates.

Find out about the key risks to this StorageVault Canada narrative.

Another View Using the SWS DCF Model

Our DCF model also points to caution, with StorageVault trading above an estimated fair value of CA$3.41. With the market already paying up on sales and cash flow assumptions looking full, investors have to ask: what happens if growth or rates move in an unfavorable direction?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out StorageVault Canada for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 912 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own StorageVault Canada Narrative

If you see the story differently or want to dig into the numbers yourself, you can build a personalized thesis in just a few minutes: Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding StorageVault Canada.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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