Independence Realty Trust (IRT): Revisiting Valuation After a Recent Share Price Rebound

Independence Realty Trust (IRT) has quietly outperformed many peers over the past month, even as its year to date and 1 year returns remain negative, making the recent move worth a closer look.

See our latest analysis for Independence Realty Trust.

That recent 8 percent or so 1 month share price return to around 17.20 dollars stands out against a weaker year to date share price performance. This suggests sentiment may be turning after a tougher stretch despite a solid five year total shareholder return.

If IRT’s improving momentum has you watching the wider real estate space, it might also be worth exploring fast growing stocks with high insider ownership as a way to uncover other potential outperformers.

With the shares still trading at a meaningful discount to analyst targets despite healthy revenue and earnings growth, the key question now is whether Independence Realty Trust is a bargain or if the market already sees future upside priced in.

Most Popular Narrative Narrative: 18.2% Undervalued

With the narrative fair value sitting well above Independence Realty Trust’s last close, the gap between modeled potential and market pricing becomes hard to ignore.

Analysts expect the number of shares outstanding to grow by 3.87% per year for the next 3 years.

Read the complete narrative.

Curious how steady rent growth, margin expansion, and rising earnings per share still point to upside despite dilution and rich valuation multiples? The full narrative explains the calculations supporting that view.

Result: Fair Value of $21.04 (UNDERVALUED)

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

However, persistent Sun Belt oversupply and aggressive leasing concessions could cap rent growth, pressure occupancy, and challenge the upbeat earnings assumptions that underpin that valuation.

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

Another Way to Look at Value

While our fair value estimate suggests Independence Realty Trust is 40.3 percent undervalued, its current price to sales ratio of 6.2 times tells a more cautious story. It sits above both the industry average of 4.9 times and a fair ratio of 4.4 times.

That premium implies the market already prices in stronger growth and execution than the regression based fair ratio suggests. This raises the risk that any earnings wobble or Sun Belt slowdown could hit the share price harder than expected. How comfortable are you with paying up for that narrative?

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

Build Your Own Independence Realty Trust Narrative

If you see the story differently or would rather dive into the numbers yourself, you can build a complete view in just a few minutes: Do it your way.

A great starting point for your Independence 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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