Digital Realty (DLR) AI Stock Analysis

• Market Cap: $58.48B
• Dividend Yield: 2.85%
• Average Volume (3M): 1.60M
• Price to Earnings (P/E): 44.9
• Beta (1Y): 0.77
• Revenue Growth: 5.64%
• EPS Growth: 12.49%
• Country: US
• Employees: 3,936
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Office
• EPS (TTM): 2.94
• Shares Outstanding: 341,050,450
• 10 Day Avg. Volume: 1,645,937
• 30 Day Avg. Volume: 1,603,211
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.35
• Enterprise Value/Revenue: 13.72
• Enterprise Value/Gross Profit: 24.87
• Enterprise Value/Ebitda: 21.49
• 1Y Price Target: $196.00
• Price Target Upside: 14.31% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16

• Rating: 72 Outperform
• Price Target: $193.00 ▲(12.56% Upside)

Digital Realty's strong financial performance and positive earnings call are the most significant factors contributing to the score. The company's robust cash flow and increased guidance signal a promising outlook. However, the high P/E ratio and technical indicators suggest caution due to potential overvaluation and short-term bearish momentum.

Positive Factors

Revenue Growth

Consistent revenue growth reflects strong demand for data center solutions, supporting long-term stability and expansion in the digital infrastructure market.

Cash Flow Generation

Strong cash flow generation enhances financial flexibility, enabling reinvestment in growth opportunities and providing a buffer against economic uncertainties.

Strategic Partnerships

Partnerships with leading cloud providers drive demand for data center services, strengthening market position and ensuring steady revenue streams.

Negative Factors

Refinancing Challenges

Refinancing challenges may increase interest expenses, impacting profitability and cash flow management, potentially straining financial resources.

Geographical Disparity in AI Demand

Uneven AI demand growth across regions could limit global expansion opportunities, affecting revenue diversification and market penetration strategies.

Potential Lower Re-Leasing Spreads

Decreasing re-leasing spreads could reduce future rental income, impacting revenue growth and profitability, especially in competitive markets.

Digital Realty Business Overview & Revenue Model

Company Description

Digital Realty supports the world's leading enterprises and service providers by delivering the full spectrum of data center, colocation and interconnection solutions. PlatformDIGITALR, the company's global data center platform, provides customers a trusted foundation and proven Pervasive Datacenter Architecture PDxTM solution methodology for scaling digital business and efficiently managing data gravity challenges. Digital Realty's global data center footprint gives customers access to the connected communities that matter to them with more than 284 facilities in 48 metros across 23 countries on six continents.

How the Company Makes Money

Digital Realty generates revenue primarily through leasing data center space to customers, which includes colocation and interconnection services. The company operates on a long-term lease model, typically securing multi-year contracts with its clients, which provides stable and predictable cash flows. Key revenue streams include monthly rental income from colocation services, as well as fees for interconnection services that allow clients to connect their infrastructure with other networks and service providers. Significant partnerships with major cloud service providers and telecommunications companies also contribute to its earnings, as these relationships drive demand for Digital Realty's data center solutions. Additionally, the company benefits from a growing market for data storage and processing, driven by increasing data consumption and digital transformation trends across various sectors.

Digital Realty Financial Statement Overview

Summary

Digital Realty demonstrates strong financial health with consistent revenue growth, robust profitability, and effective cash flow management. The balance sheet is stable, though there is potential to enhance equity returns.

Income Statement

Digital Realty shows a steady revenue growth rate of 2.42% TTM, with a strong net profit margin of 23.98% and an EBIT margin of 16.09%. However, the gross profit margin has decreased from previous years, indicating potential cost pressures. Overall, the company demonstrates solid profitability and growth in the TTM period.

Balance Sheet

The company maintains a moderate debt-to-equity ratio of 0.86, reflecting a balanced approach to leverage. Return on equity is modest at 6.37%, suggesting efficient use of equity capital. The equity ratio stands at 47.05%, indicating a stable capital structure. While the balance sheet is stable, there is room for improvement in equity returns.

Cash Flow

Digital Realty exhibits a significant free cash flow growth rate of 43.78% TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio of 0.67 and a free cash flow to net income ratio of 1.0 highlight efficient cash flow management. The cash flow position is robust, supporting future growth and stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.77B	5.55B	5.48B	4.69B	4.43B	3.90B
Gross Profit	3.18B	3.04B	2.88B	2.67B	2.65B	2.39B
EBITDA	3.68B	2.87B	3.16B	2.29B	3.60B	2.10B
Net Income	1.38B	602.49M	948.84M	377.68M	1.71B	356.40M
Balance Sheet
Total Assets	48.71B	45.28B	44.11B	41.48B	36.37B	36.08B
Cash, Cash Equivalents and Short-Term Investments	3.55B	3.87B	1.63B	141.77M	142.70M	108.50M
Total Debt	19.75B	18.01B	18.97B	18.07B	14.96B	14.77B
Total Liabilities	23.85B	22.11B	23.12B	21.86B	17.85B	17.59B
Stockholders Equity	22.91B	21.34B	19.12B	17.58B	18.00B	17.72B
Cash Flow
Free Cash Flow	2.38B	2.26B	1.63B	-983.71M	-818.54M	-472.14M
Operating Cash Flow	2.38B	2.26B	1.63B	1.66B	1.70B	1.71B
Investing Cash Flow	-2.37B	-1.91B	-1.12B	-4.70B	-1.06B	-2.60B
Financing Cash Flow	1.55B	2.06B	963.47M	2.97B	-590.63M	935.69M

Digital Realty Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 171.46
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DLR, the sentiment is Positive. The current price of 171.46 is above the 20-day moving average (MA) of 169.04, above the 50-day MA of 169.83, and above the 200-day MA of 164.72, indicating a bullish trend. The MACD of 1.39 indicates Negative momentum. The RSI at 53.37 is Neutral, neither overbought nor oversold. The STOCH value of 29.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DLR.

Digital Realty Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DLR	72 Outperform	$58.48B	44.91	6.37%	2.85%	5.64%	12.49%
KRC	69 Neutral	$5.09B	23.15	4.08%	5.06%	2.26%	10.15%
CUZ	68 Neutral	$4.76B	76.79	0.82%	4.51%	13.07%	-4.94%
VNO	65 Neutral	$8.41B	9.97	14.36%	1.84%	1.38%	4370.96%
BXP	62 Neutral	$13.02B	3,778.79	0.26%	5.24%	3.24%	-97.73%
ARE	60 Neutral	$14.50B	-634.75	-0.07%	6.27%	3.12%	-116.29%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%

Digital Realty Corporate Events

Digital Realty Approves 2025 Carried Interest Plan

On August 27, 2025, Digital Realty Trust, Inc. approved the Digital Realty 2025 Carried Interest Plan to incentivize and retain key employees through carried interest and appreciation interest awards. This plan aims to recognize the success of strategic capital ventures and involves granting awards to executives, including the CEO and CFO, with specific carried interest percentages. The plan’s implementation highlights Digital Realty’s commitment to aligning employee incentives with the company’s strategic goals, potentially impacting its market positioning by fostering employee engagement and investment success.

The most recent analyst rating on (DLR) stock is a Buy with a $185.00 price target. To see the full list of analyst forecasts on Digital Realty stock, see the DLR Stock Forecast page.