NNN REIT Valuation in Focus After Recent Share Price Climb in 2025

Thinking about what’s next for NNN REIT stock? Whether you’re considering a new position or holding on to shares you already own, now is an interesting moment to check in. While NNN REIT hasn’t exactly set the world on fire in the past year, dropping 6.2%, its three- and five-year returns paint a much brighter picture, up 29.5% and 53.3%, respectively. Even this year, momentum has shifted more positive, posting a 7.0% gain year-to-date and a steady 2.1% bump over just the last week. Investors seem to be adjusting their views as market sentiment toward real estate investment trusts evolves, especially with broader interest rate and inflation conversations swirling in the background.

What is especially compelling right now is how the numbers stack up. NNN REIT earns a valuation score of 5 out of 6 based on widely used undervaluation checks. That means, across virtually every major metric, the company looks underpriced compared to its potential. This is a fact that is difficult to ignore if you are searching for value amid volatility.

Before making any moves, let’s walk through the valuation frameworks that provide those numbers and see where NNN REIT really stands. Even more importantly, we will explore one often-overlooked way to judge whether a stock like this is truly undervalued, so stick around for that insight at the end.

Why NNN REIT is lagging behind its peers

Approach 1: NNN REIT Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) approach estimates NNN REIT’s value by projecting its future cash flows and then discounting those back to today’s value to account for risk and the time value of money. For NNN REIT, the model is based on cash flows from adjusted funds from operations, a popular metric for real estate companies.

Currently, NNN REIT generates $616.6 million in free cash flow. Over the next several years, this figure is expected to steadily increase, with analysts forecasting $758 million in annual free cash flow by the end of 2028. Beyond analyst estimates, further projections calculated by Simply Wall St extend through 2035 and suggest ongoing, measured growth in free cash flow each year.

Using these estimates, the DCF model arrives at an intrinsic value of $75.16 per share. Compared to the company’s current share price, this calculation implies the stock is trading at a 42.9% discount to its estimated fair value, indicating substantial undervaluation.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for NNN REIT.

Our Discounted Cash Flow (DCF) analysis suggests NNN REIT is undervalued by 42.9%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: NNN REIT Price vs Earnings

The Price-to-Earnings (PE) ratio is widely regarded as a reliable valuation tool for profitable companies like NNN REIT because it gives investors a direct sense of how much they are paying for each dollar of reported earnings. A sensible PE ratio is influenced by factors such as an organization’s expected growth rate and risk profile. Companies with stronger anticipated growth or lower risks typically command higher PE ratios. Those with more uncertainty or slower growth see lower ratios.

Currently, NNN REIT trades at a PE of 20.7x. For context, this is below the industry average PE of 25.9x for Retail REITs and is also lower than the 30.5x peer group benchmark. This spread suggests the market is valuing NNN REIT’s earnings more conservatively than its peers and the general industry, despite a history of steady earnings and stability.

Simply Wall St’s proprietary “Fair Ratio” model takes a more personalized approach by factoring in not just earnings growth and profit margins but also sector trends, company size, and risk factors. This Fair Ratio for NNN REIT stands at 32x. Because it is tailored to the company’s unique situation, it can provide a more complete picture than simple peer or industry comparisons.

Looking at the numbers, with NNN REIT’s actual PE ratio of 20.7x and a Fair Ratio nearly 32x, there is a substantial gap. This means the stock appears to be significantly undervalued when all relevant factors are considered together.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your NNN REIT Narrative

Earlier we mentioned that there's an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is simply the story you see unfolding for a company, your perspective on how its future will play out, reflected in your own assumptions about revenue, margins, and a fair value target. Narratives link this story directly to a forecast and fair value, showing you not just what the numbers are, but why they matter.

This is an easy, accessible tool you can use on Simply Wall St’s Community page, trusted by millions of investors. Narratives help you decide if it’s time to buy, sell, or hold, by comparing your fair value to the current price, and they update automatically as new news or results come in. You always have the latest context for your decision.

For example, one NNN REIT Bull might project Sun Belt growth and necessity-based tenant demand will secure enduring stability, leading to a fair value of $44.54. Another Narrative might highlight rising acquisition competition and tenant risks, estimating a fair value as low as $40.43. This empowers you to see exactly where your views stand, side by side with others in the market.

Do you think there's more to the story for NNN REIT? Create your own Narrative to let the Community know!

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com