What is COR's Intrinsic value?

CoreSite Realty Corp (COR) Intrinsic Value Analysis

Executive Summary

As of December 15, 2025, CoreSite Realty Corp's estimated intrinsic value ranges from $202.57 to $421.35 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Discounted Cash Flow (10Y) $421.35 +21.8%
Discounted Cash Flow (5Y) $370.79 +7.2%
Dividend Discount Model (Multi-Stage) $202.57 -41.5%
Dividend Discount Model (Stable) $208.57 -39.7%
Earnings Power Value $252.53 -27.0%

Is CoreSite Realty Corp (COR) undervalued or overvalued?

With the current market price at $346.00, the stock appears to be fairly valued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate CoreSite Realty Corp's intrinsic value, including:

  1. Discounted Cash Flow (DCF): Values the company based on projected future cash flows
  2. Dividend Discount Model (DDM): Values the company based on expected future dividend payments
  3. Earnings Power Value (EPV): Values the company based on its current earnings power, assuming no growth

Weighted Average Cost of Capital (WACC)

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 0.51 0.58
Cost of equity 6.2% 8.1%
Cost of debt 4.6% 5.3%
Tax rate 24.0% 26.7%
Debt/Equity ratio 0.11 0.11
After-tax WACC 5.9% 7.7%

Valuation Methods

1. Discounted Cash Flow (DCF) Valuation

Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:

  • Forecast Period: 5-year DCF and 10-year DCF
  • Terminal Growth Rate: 0.0% (range: 3.0% - 5.0%)
  • Discount Rate: 6.8% (range: 0.0% - 9.3%)

Key Projections:

  • Revenue growth from $321,333 (FY09-2025) to $610,370 (FY09-2035)
  • Net profit margin expansion from 0% to 1%
  • Capital expenditures maintained at approximately 0% of revenue
DCF Model Fair Value Enterprise Value % from Terminal Value
5-Year Growth $371 $75,233M 83.2%
10-Year Growth $421 $85,043M 70.7%
5-Year EBITDA $263 $54,338M 76.7%
10-Year EBITDA $324 $66,253M 62.4%

2. Dividend Discount Model (DDM)

The DDM values a company based on its expected future dividend payments. We used two approaches:

Multi-Stage DDM:

  • Current payout ratio: 28.1%
  • Stable payout ratio: 90.0%
  • Growth transition: 5 years
  • Cost of equity: 7.2%
  • Long-term growth rate: 3.0%
  • Fair value: $202.57 (-41.5% from current price)

Stable DDM:

  • Stable payout ratio: 70% (Low) to 90% (High)
  • Cost of equity: 8.1% (Low) to 6.2% (High)
  • Long-term growth rate: 2.0% (Low) to 4.0% (High)
  • Fair value range: $92 to $325
  • Selected fair value: $208.57 (-39.7% from current price)

3. Earnings Power Value (EPV)

EPV assesses a company's value based on its current normalized earnings power, assuming no growth.

EPV Component Value
Normalized Earnings $3,498M
Discount Rate (WACC) 7.7% - 5.9%
Enterprise Value $45,666M - $58,922M
Net Debt $3,305M
Equity Value $42,361M - $55,617M
Outstanding Shares 194M
Fair Value $218 - $287
Selected Fair Value $252.53

Key Financial Metrics

Metric Value
Market Capitalization $67121M
Enterprise Value $70425M
Trailing P/E 43.19
Forward P/E 37.40
Trailing EV/EBITDA 14.20
Current Dividend Yield 65.12%
Dividend Growth Rate (5Y) 4.49%
Debt-to-Equity Ratio 0.11

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Discounted Cash Flow (10Y) 30% $126.41
Discounted Cash Flow (5Y) 25% $92.70
Dividend Discount Model (Multi-Stage) 20% $40.51
Dividend Discount Model (Stable) 15% $31.29
Earnings Power Value 10% $25.25
Weighted Average 100% $316.15

Investment Conclusion

Based on our comprehensive valuation analysis, CoreSite Realty Corp's intrinsic value is $316.15, which is approximately 8.6% below the current market price of $346.00.

Key investment considerations:

  • Strong projected earnings growth (0% to 1% margin)
  • Consistent cash flow generation
  • Conservative capital structure (Debt/Equity of 0.11)
  • Historical dividend growth of 4.49%

Given these factors, we believe CoreSite Realty Corp is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.