With a market cap of $49.5 billion, Digital Realty Trust, Inc. (DLR) operates as a real estate investment trust (REIT). Based in Austin, Texas, the company owns, acquires, develops, and operates data centers. It delivers the full spectrum of data center, colocation, and interconnection solutions across 25+ countries on six continents.
Companies valued at $10 billion or more are generally classified as “large-cap” stocks and Digital Realty fits this criterion perfectly. Through its global data center platform, Platform DIGITAL, the company provides customers with a secure data meeting place and a proven Pervasive center architecture (PDx) solution methodology for powering innovation and efficiently managing Data Gravity challenges.
Further, the REIT dipped 25.7% from its 52-week high of $198.00. Over the past three months, DLR stock dropped 21.5%, lagging behind the Real Estate Select Sector SPDR Fund (XLRE), which declined 3.3% in the same period.
In the long term, DLR is down 17.1% on a YTD basis, underperforming XLRE’s 2.3% gain. In addition, shares of Digital Realty have risen over 1% over the last 52 weeks, while the XLRE has returned 4.1%.
DLR has been trading above its 50-day and 200-day moving averages since last year. But, the stock has fallen below its 50-day moving average since mid-December 2024 and its 200-day moving average since late February.
Shares of DLR fell marginally following its Q4 2024 earnings release on Feb. 13 as the company reported revenue of $1.4 billion, falling short of analyst expectations. While earnings surpassed forecasts, with FFO per share at $1.73, investors were cautious about higher costs from construction and sustainability initiatives. Additionally, management provided no upward revision to forward guidance, maintaining a Core FFO outlook of $7.05 - $7.15.
In comparison with its rival, Equinix, Inc. (EQIX) has lagged behind DLR, declining 6.4% over the past 52 weeks. But EQIX has fallen 11.3% on a YTD basis, outpacing DLR.
Despite DLR’s underperformance compared to its sector over the past year, analysts are moderately optimistic about the stock’s prospects. The stock has a consensus rating of “Moderate Buy” from the 27 analysts covering it, and as of writing, DLR is trading below the mean price target of $187.50.
