Get insights on thousands of stocks from the global community of over 7 million individual investors at Simply Wall St.
Terreno Realty (TRNO) has been drawing attention after a modest 1 day decline of about 1.5%, even as its shares show positive returns over the past month and past 3 months. Investors are weighing that short term pullback against longer term total returns.
See our latest analysis for Terreno Realty.
With the share price at $65.40, Terreno Realty’s recent 6.3% 30 day share price return and 10.8% year to date share price return contrast with a more modest 0.3% 1 year total shareholder return, hinting that momentum has picked up only in recent months as investors reassess its risk and income profile.
If this shift in sentiment has you thinking about where else capital might work hard, now could be a good time to broaden your search with our 18 top founder-led companies.
Terreno Realty’s recent share price gains, modest 1 year total return, and current discount to analyst targets all pull in different directions. Is the stock quietly undervalued here, or is the market already pricing in future growth?
With Terreno Realty closing at $65.40, the current P/E of 17x sits below both the broader US market on 19.4x and the peer average on 36.1x. This points to a more restrained pricing of its earnings than many investors might expect for this industrial REIT.
The P/E ratio simply tells you how much investors are paying today for each dollar of earnings. It is especially watched for income oriented, asset backed businesses like REITs. In Terreno Realty’s case, earnings have grown by 118.4% over the past year and by 26.3% per year over the past 5 years, and its recent profit margins of 84.2% are higher than last year’s 48%. These figures are influenced by a large one off gain of $238.1m in the last 12 months.
Relative to its space, Terreno Realty is described as trading at good value compared to peers and the industrial REITs industry. Its 17x P/E is below the global industrial REITs average of 17.9x and well below the 36.1x peer average. On top of that, our fair P/E estimate sits at 19x, a level the market could potentially move toward if sentiment on its earnings profile shifted.
Explore the SWS fair ratio for Terreno Realty
Result: Price-to-earnings of 17x (UNDERVALUED)
However, you still need to weigh risks such as the 38.6% annual net income contraction and the 8.4% intrinsic premium implied by our current fair value estimate.
Find out about the key risks to this Terreno Realty narrative.
