DCF Studio

    EXR · NYQ · Real Estate

    Extra Space Storage Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 23.16

    Market price

    USD 155.98

    Implied upside

    -85.2%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedReported capital expenditure averages just 0.77% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 19.99% of revenue so the forecast is not handed free growth. The accounts do not separate depreciation from amortisation, so the combined charge is used - if a large part of it is amortisation of an acquisition, the reported capex is probably right and this substitution is not. Override it if the reported figure is right.

    Current EV/EBITDA of 21.9x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.

    Value Per Share

    Perpetuity growth
    USD 23.16-85.2%
    Exit multiple
    USD 88.00-43.6%
    Market price
    USD 155.98

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn1bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 3.0bnUSD 3.1bnUSD 3.1bnUSD 3.2bnUSD 3.3bnUSD 3.4bnUSD 3.5bnUSD 3.6bnUSD 3.7bnUSD 3.8bn+2.6%
    EBITUSD 1.4bnUSD 1.5bnUSD 1.5bnUSD 1.5bnUSD 1.6bnUSD 1.6bnUSD 1.7bnUSD 1.7bnUSD 1.7bnUSD 1.8bn+2.6%
    NOPATUSD 1.4bnUSD 1.4bnUSD 1.4bnUSD 1.5bnUSD 1.5bnUSD 1.6bnUSD 1.6bnUSD 1.6bnUSD 1.7bnUSD 1.7bn+2.6%
    Add depreciation & amortisationUSD 596.8mUSD 612.8mUSD 629.1mUSD 645.7mUSD 662.6mUSD 679.8mUSD 697.3mUSD 715.1mUSD 733.1mUSD 751.4m+2.6%
    Less capital expenditureUSD -596.8mUSD -659.2mUSD -724.4mUSD -792.4mUSD -863.3mUSD -937.2mUSD -1.0bnUSD -1.1bnUSD -1.2bnUSD -1.3bn+8.7%
    Capex, % of revenue20.0%21.5%23.0%24.5%26.0%27.6%29.1%30.6%32.1%33.6%-
    Less increase in working capitalUSD -25.6mUSD 5.2mUSD 5.3mUSD 5.4mUSD 5.5mUSD 5.6mUSD 5.7mUSD 5.8mUSD 5.9mUSD 6.0m-
    Free cashflow to firmUSD 1.3bnUSD 1.4bnUSD 1.4bnUSD 1.3bnUSD 1.3bnUSD 1.3bnUSD 1.3bnUSD 1.3bnUSD 1.2bnUSD 1.2bn-1.1%
    Discount factor0.96040.88570.81690.75340.69490.64090.59110.54520.50280.4637-
    Present valueUSD 1.3bnUSD 1.2bnUSD 1.1bnUSD 1.0bnUSD 921.7mUSD 839.1mUSD 762.5mUSD 691.6mUSD 626.1mUSD 565.5m-
    Present Value Of The ForecastUSD 9.0bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.060Reported 1.089, pulled toward 1.0 (Blume)
    Cost of equity9.38%Risk-free + beta x equity risk premium
    Cost of debt6.27%Risk-free + 138bp, the spread for a BB+ rating at 2.3x interest cover. Book interest / average debt was lower, at 4.7%.
    Market capitalisationUSD 34.4bn71.1% of capital
    Total debtUSD 14.0bn28.9% of capital, book value as a proxy
    Tax rate3.0%Effective, capped at statutory
    WACC8.42%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 23.16

    52% of EV

    Forecast FCFF, final year
    USD 1.2bn
    Capex at depreciation, working capital in reinvestment
    USD 1.7bn
    Less reinvestment at g/ROIC (29.7% of NOPAT)
    USD -512.0m
    Capitalised
    USD 1.2bn
    ROIC (WACC floor)
    8.4%
    Terminal value, undiscounted
    USD 21.0bn
    Terminal value, discounted
    USD 9.7bn
    Enterprise value
    USD 18.8bn
    Less net debt
    USD 13.9bn
    Equity value
    USD 4.9bn

    Exit at 20.0x EBITDA

    Value per shareUSD 88.00

    72% of EV

    Terminal value, undiscounted
    USD 50.6bn
    Terminal value, discounted
    USD 23.5bn
    Enterprise value
    USD 32.5bn
    Less net debt
    USD 13.9bn
    Equity value
    USD 18.6bn

    Spread between methods: 117%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.42%53.5751.9850.3948.7947.20
    7.42%37.5436.2434.9333.6332.33
    8.42%25.3324.2523.1622.0720.99
    9.42%15.7314.8113.8912.9712.05
    10.42%7.987.206.415.624.83

    Outlined: this model. Green text: above today's price of 155.98. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year20.6%1.1%12.2%
    Discount rate-8.4%4.2%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.