A Look at Digital Realty Trust (DLR) Valuation Following Raised 2025 Guidance and Strong Q3 Results

Digital Realty Trust (DLR) released its third quarter numbers, showing year-over-year growth across sales, revenue, and net income. Alongside the results, the company raised its 2025 guidance and pointed to sustained operational strength.

See our latest analysis for Digital Realty Trust.

Following its latest upbeat earnings and raised 2025 outlook, Digital Realty Trust’s share price has slipped around 3% over the past month, but this comes after a strong stretch. Its three-year total shareholder return still sits at an impressive 96%. Recent signals suggest that despite a short-term cooldown, momentum and market optimism remain anchored by robust performance and rising forecasts.

If you’re curious about other dynamic companies with growth stories, this is a great moment to expand your search and discover fast growing stocks with high insider ownership

With analyst targets above current levels and Digital Realty Trust’s outlook growing stronger, the big question for investors is whether today’s price reflects all that momentum, or if there could be more upside ahead.

Most Popular Narrative: 13.8% Undervalued

Digital Realty Trust’s narrative fair value stands well above its recent close, which highlights expectations of upside based on catalysts beyond past performance.

The successful formation of Digital Realty's first U.S. hyperscale fund is expected to fuel future growth with up to $10 billion in investments. This may lead to enhanced revenue and returns through fees, reflecting its significant potential impact on long-term earnings sustainability.

Read the complete narrative.

Curious which strategic moves and financial projections support this ambitious fair value? The underlying calculation draws on sector-shifting deal flow and bold profit margin forecasts. Wondering what powers this valuation? Explore the full narrative to uncover the bullish assumptions driving Digital Realty Trust’s target price.

Result: Fair Value of $197.70 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks remain, as rapid U.S. market expansion and interest rate fluctuations could pressure profitability and challenge the bullish case for continued outperformance.

Find out about the key risks to this Digital Realty Trust narrative.

Another View: Is the Market Missing Something?

Looking at Digital Realty Trust’s valuation, the usual market metric, price-to-earnings ratio, shows the stock trading at 43.1x earnings. That is not only higher than its peers at 36.6x, but also much richer than the industry average of 26x. Even compared to the fair ratio of 28.3x, the current price looks expensive. Does this premium signal confidence, or is there risk the market’s optimism could fade?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Digital Realty Trust Narrative

If you have your own perspective or want to dive deeper into the numbers, it is easy to construct your own view in just a few minutes. Do it your way

A great starting point for your Digital Realty Trust research is our analysis highlighting 4 key rewards and 3 important warning signs that could impact your investment decision.

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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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