Stock of the Day

January 20, 2020

Digital Realty Trust (DLR)

$165.26
-$6.74 (-3.9%)
Market Cap: $57.05B

About Digital Realty Trust

Digital Realty Trust, Inc. operates as a real estate investment trust, which engages in the provision of data center, colocation and interconnection solutions. It serves the following industries: artificial intelligence (AI), networks, cloud, digital media, mobile, financial services, healthcare, and gaming. The company was founded on March 9, 2004, and is headquartered in Dallas, TX.

Digital Realty Trust Bull Case

Here are some ways that investors could benefit from investing in Digital Realty Trust, Inc.:

  • Digital Realty Trust, Inc. reported impressive earnings per share (EPS) of $1.73, significantly surpassing analysts' expectations of $0.27, indicating strong financial performance and potential for growth.
  • The company has a substantial market capitalization of $54.42 billion, which reflects its stability and ability to attract institutional investors, with 99.71% of the stock owned by such entities.
  • Recent analyst upgrades have increased price targets for Digital Realty Trust, Inc., with some analysts setting targets as high as $208, suggesting a positive outlook for the stock's future performance.
  • The current stock price is $164.06, which may present a buying opportunity for investors looking to enter at a lower price point compared to recent highs.
  • Digital Realty Trust, Inc. operates in the growing data center and colocation market, which is expected to expand as demand for cloud services and data storage continues to rise.

Digital Realty Trust Bear Case

Investors should be bearish about investing in Digital Realty Trust, Inc. for these reasons:

  • The company has a high price-to-earnings (P/E) ratio of 137.86, which may indicate that the stock is overvalued compared to its earnings, potentially leading to a price correction.
  • Digital Realty Trust, Inc. has a relatively low return on equity (ROE) of 2.24%, suggesting that the company may not be efficiently generating profits from its equity investments.
  • Despite recent positive earnings, the company's net margin stands at only 8.04%, which could raise concerns about profitability and cost management.
  • The stock has experienced volatility, with a beta of 0.63, indicating that it may not respond strongly to market movements, which could limit potential gains for investors seeking high returns.
  • Insider selling activity, such as the CFO selling shares valued at over $471,000, may signal a lack of confidence in the company's short-term prospects.

Recent News