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Why Is Digital Realty (DLR) Up 4% Since the Last Earnings Report?
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A month has gone by since the last earnings report for Digital Realty Trust, Inc. (DLR - Free Report) . Shares have added nearly 4% in the past month, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Digital Realty Q1 FFO Beats Estimates, Revenues Up Y/Y
Digital Realty Trust’s first-quarter 2017 FFO per share of $1.50 came 7.9% higher than the year-ago tally of $1.39. Further, core FFO per share of $1.52 exceeded the year-ago quarter tally of $1.42 by 7.0%. The Zacks Consensus Estimate for the quarter was pegged at $1.47. Results were driven by growth in revenues.
The company reported revenues of $550.6 million for the first quarter, reflecting a 9.2% increase year over year. The revenue figure also marginally surpassed the Zacks Consensus Estimate of $550.4 million.
Quarter in Detail
During the first quarter, the company signed total bookings which represented $50 million of annualized GAAP rental revenue, including a $9 million contribution from interconnection. Notably, the weighted-average lag between leases signed during first-quarter 2017 and the contractual commencement date was three months.
Moreover, the company signed renewal leases denoting $46 million of annualized GAAP rental revenue. Rental rates on renewal leases signed during the reported quarter rolled up 3.1% on a cash basis and expanded 4.5% on a GAAP basis.
Notably, during the quarter, the company acquired a seven-acre land parcel next to its existing development project in Osaka, Japan, for $13.6 million. The location is expected to support the development of 25 megawatts of critical power.
Balance Sheet
Digital Realty exited the first quarter with cash, cash equivalents of around $15.0 million, up from $10.5 million at year-end 2016.
Further, as of Mar 31, 2017, the company had around $6.2 billion of total debt outstanding, substantially all of which was unsecured. Also, as of the same date, the company’s net debt-to-adjusted EBITDA was 4.9x, while fixed charge coverage was 4.2x.
Outlook
Digital Realty raised its 2017 core FFO per share outlook to $5.95–$6.10 from the prior guided range of $5.90–$6.10. This is backed by revenue expectations of $2.2–$2.3 billion, year-end portfolio occupancy growth of +/- 50 bps and "same-capital" cash NOI growth of 2.0–3.0%.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter. While looking back an additional 30 days, we can see even more upward momentum. There have been three moves up in the last two months.
At this time, Digital Realty's stock has an average Growth Score of 'C', however its Momentum lagging a bit with a 'D'. However, the stock was allocated a grade of 'F' on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is solely suitable for growth investors.
Outlook
While estimates have been broadly trending upward for the stock, the magnitude of these revisions has been net zero. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Why Is Digital Realty (DLR) Up 4% Since the Last Earnings Report?
A month has gone by since the last earnings report for Digital Realty Trust, Inc. (DLR - Free Report) . Shares have added nearly 4% in the past month, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Digital Realty Q1 FFO Beats Estimates, Revenues Up Y/Y
Digital Realty Trust’s first-quarter 2017 FFO per share of $1.50 came 7.9% higher than the year-ago tally of $1.39. Further, core FFO per share of $1.52 exceeded the year-ago quarter tally of $1.42 by 7.0%. The Zacks Consensus Estimate for the quarter was pegged at $1.47. Results were driven by growth in revenues.
The company reported revenues of $550.6 million for the first quarter, reflecting a 9.2% increase year over year. The revenue figure also marginally surpassed the Zacks Consensus Estimate of $550.4 million.
Quarter in Detail
During the first quarter, the company signed total bookings which represented $50 million of annualized GAAP rental revenue, including a $9 million contribution from interconnection. Notably, the weighted-average lag between leases signed during first-quarter 2017 and the contractual commencement date was three months.
Moreover, the company signed renewal leases denoting $46 million of annualized GAAP rental revenue. Rental rates on renewal leases signed during the reported quarter rolled up 3.1% on a cash basis and expanded 4.5% on a GAAP basis.
Notably, during the quarter, the company acquired a seven-acre land parcel next to its existing development project in Osaka, Japan, for $13.6 million. The location is expected to support the development of 25 megawatts of critical power.
Balance Sheet
Digital Realty exited the first quarter with cash, cash equivalents of around $15.0 million, up from $10.5 million at year-end 2016.
Further, as of Mar 31, 2017, the company had around $6.2 billion of total debt outstanding, substantially all of which was unsecured. Also, as of the same date, the company’s net debt-to-adjusted EBITDA was 4.9x, while fixed charge coverage was 4.2x.
Outlook
Digital Realty raised its 2017 core FFO per share outlook to $5.95–$6.10 from the prior guided range of $5.90–$6.10. This is backed by revenue expectations of $2.2–$2.3 billion, year-end portfolio occupancy growth of +/- 50 bps and "same-capital" cash NOI growth of 2.0–3.0%.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed an upward trend in fresh estimates. There has been one revision higher for the current quarter. While looking back an additional 30 days, we can see even more upward momentum. There have been three moves up in the last two months.
Digital Realty Trust, Inc. Price and Consensus
Digital Realty Trust, Inc. Price and Consensus | Digital Realty Trust, Inc. Quote
VGM Scores
At this time, Digital Realty's stock has an average Growth Score of 'C', however its Momentum lagging a bit with a 'D'. However, the stock was allocated a grade of 'F' on the value side, putting it in the lowest quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is solely suitable for growth investors.
Outlook
While estimates have been broadly trending upward for the stock, the magnitude of these revisions has been net zero. Notably, the stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.