As of June 18, 2025, Bluerock Residential Growth REIT Inc's estimated intrinsic value ranges from $16.15 to $46.50 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $46.50 | +74.8% |
| Discounted Cash Flow (5Y) | $31.50 | +18.4% |
| Dividend Discount Model (Multi-Stage) | $41.20 | +54.9% |
| Dividend Discount Model (Stable) | $16.15 | -39.3% |
| Earnings Power Value | $32.62 | +22.6% |
Is Bluerock Residential Growth REIT Inc (BRG) undervalued or overvalued?
With the current market price at $26.60, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Bluerock Residential Growth REIT Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.74 | 0.85 |
| Cost of equity | 7.3% | 9.6% |
| Cost of debt | 4.0% | 9.1% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 1.68 | 1.68 |
| After-tax WACC | 4.6% | 7.8% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $31 | $2,161M | 78.1% |
| 10-Year Growth | $47 | $2,619M | 62.2% |
| 5-Year EBITDA | $52 | $2,788M | 83.0% |
| 10-Year EBITDA | $65 | $3,181M | 68.9% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $126M |
| Discount Rate (WACC) | 7.8% - 4.6% |
| Enterprise Value | $1,625M - $2,765M |
| Net Debt | $1,198M |
| Equity Value | $427M - $1,567M |
| Outstanding Shares | 31M |
| Fair Value | $14 - $51 |
| Selected Fair Value | $32.62 |
| Metric | Value |
|---|---|
| Market Capitalization | $813M |
| Enterprise Value | $2011M |
| Trailing P/E | 17.85 |
| Forward P/E | 9.75 |
| Trailing EV/EBITDA | 13.90 |
| Current Dividend Yield | 1089.88% |
| Dividend Growth Rate (5Y) | 9.39% |
| Debt-to-Equity Ratio | 1.68 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $13.95 |
| Discounted Cash Flow (5Y) | 25% | $7.87 |
| Dividend Discount Model (Multi-Stage) | 20% | $8.24 |
| Dividend Discount Model (Stable) | 15% | $2.42 |
| Earnings Power Value | 10% | $3.26 |
| Weighted Average | 100% | $35.75 |
Based on our comprehensive valuation analysis, Bluerock Residential Growth REIT Inc's weighted average intrinsic value is $35.75, which is approximately 34.4% above the current market price of $26.60.
Key investment considerations:
Given these factors, we believe Bluerock Residential Growth REIT Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.