SmartStop Self Storage REIT (SMA): Assessing Valuation After Recent 3-Month Share Price Weakness

SmartStop Self Storage REIT (SMA) has been drifting lately, with the stock roughly flat over the past month but down about 15% in the past 3 months, inviting a closer look.

See our latest analysis for SmartStop Self Storage REIT.

Zooming out, SmartStop’s 90 day share price return of negative 14.9 percent contrasts with a milder year to date share price decline. This hints that selling pressure has eased and momentum may be stabilising around the recent 31.51 dollars level.

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With shares trading well below analyst targets yet the business still delivering double digit revenue growth, the key question now is simple: is SmartStop undervalued or is the market already pricing in its future expansion?

Price to Sales of 6.9x: Is it justified?

SmartStop Self Storage REIT is trading on a price to sales ratio of 6.9 times, which screens as reasonable against peers despite recent share price weakness.

The price to sales multiple compares the company’s market value with its annual revenue, a common yardstick for REITs where accounting earnings can be noisy or negative. For SmartStop, this lens helps investors focus on top line scale and growth, rather than current losses that may be influenced by depreciation and financing structure.

On a relative basis, SmartStop’s 6.9 times price to sales stands in line with the US specialized REITs industry average of 6.9 times and slightly below the 7 times peer average. This suggests the market is not paying a visible premium for its revenue base. However, when set against the SWS fair price to sales estimate of 4.7 times, the current multiple looks elevated. This implies valuation could compress toward that lower level if expectations moderate or growth underwhelms.

Explore the SWS fair ratio for SmartStop Self Storage REIT

Result: Price-to-Sales of 6.9x (OVERVALUED)

However, downside risks remain, including potential multiple compression if revenue growth slows, or if persistent net losses erode confidence in SmartStop’s expansion strategy.

Find out about the key risks to this SmartStop Self Storage REIT narrative.

Another View: DCF Points the Other Way

Our DCF model paints a very different picture, suggesting SmartStop’s fair value is around 51.32 dollars, roughly 39 percent above the current 31.51 dollars share price. If cash flows are right, that indicates a margin of safety. The key question is whether the forecasts are too optimistic.

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 SmartStop Self Storage REIT 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 916 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 SmartStop Self Storage REIT Narrative

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

A great starting point for your SmartStop Self Storage REIT research is our analysis highlighting 4 key rewards and 1 important warning sign 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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