Extra Space Storage Inc. EXR
Verdict: Hold. Fair value $151 against a price of $131 on 6 Jan 2026, 15% above the price.
In plain words
The case for: Narrow competitive moat provides durability. Industry tailwinds with growing market.
The case against: Macro headwinds could impact growth. Valuation multiple compression risk.
Main risks
- Stagnant Profitability Despite Growth: Net Income and estimated EBIT have remained flat for three years while revenue more than doubled, indicating a severe deterioration in profitability.
- Alarmingly Poor Capital Allocation (ROIIC): The 3-year Return on Incremental Invested Capital is calculated to be near zero (0.2%), suggesting that over $13B in new capital has generated virtually no additional operating profit. This is a severe red flag regarding capital allocation efficiency.
- Deteriorating Returns and High Leverage: ROE (6.1%) and ROIC (4.3%) are extremely low for a company of this scale. Growth has been funded with significant debt, leading to a high Debt/Equity ratio (0.93) and a very high estimated Debt/EBIT ratio (>11x), increasing financial risk.
- Overhang: The stock is experiencing an overhang due to recent underperformance relative to the real ...
- Long-term trend is bearish
- Market volatility