Does The Hype Around National Storage Affiliates Trust's (NYSE:NSA) Growth Justify Its March Share Price?

National Storage Affiliates Trust (NYSE:NSA) is considered a high growth stock. However its last closing price of $25.13 left investors wondering whether this growth has already been factored into the share price. Let’s look into this by assessing NSA's expected growth over the next few years. View our latest analysis for National Storage Affiliates Trust

How is NSA going to perform in the future?

National Storage Affiliates Trust is poised for extremely high earnings growth in the near future. The consensus forecast from 5 analysts is extremely bullish with earnings per share estimated to rise from today's level of $0.014 to $0.31 over the next three years. This results in an annual growth rate of 36.68%, on average, which illustrates a highly optimistic outlook in the near term.

Is NSA available at a good price after accounting for its growth?

National Storage Affiliates Trust is available at price-to-earnings ratio of 1763.63x, showing us it is overvalued based on current earnings compared to the reits industry average of 20.35x , and overvalued compared to the US market average ratio of 18.54x .

After looking at NSA's value based on current earnings, we can see it seems overvalued relative to other companies in the industry. However, since National Storage Affiliates Trust is a high-growth stock, we must also account for its earnings growth by using calculation called the PEG ratio. A PE ratio of 1763.63x and expected year-on-year earnings growth of 36.68% give National Storage Affiliates Trust an eye-watering PEG ratio of 48.08x. This means that, when we account for National Storage Affiliates Trust's growth, the stock can be viewed as highly overvalued , based on its fundamentals.

What this means for you:

NSA's current overvaluation could signal a potential selling opportunity to reduce your exposure to the stock, or it you're a potential investor, now may not be the right time to buy. However, basing your investment decision off one metric alone is certainly not sufficient. There are many things I have not taken into account in this article and the PEG ratio is very one-dimensional. If you have not done so already, I urge you to complete your research by taking a look at the following:

1. Financial Health: Is NSA’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
2. Past Track Record: Has NSA been consistently performing well irrespective of the ups and downs in the market? Go into more detail in the past performance analysis and take a look at the free visual representations of NSA's historicals for more clarity.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.