As of June 8, 2025, Tanger Factory Outlet Centers Inc's estimated intrinsic value ranges from $4.42 to $30.60 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $28.00 | -7.5% |
| Discounted Cash Flow (5Y) | $30.60 | +1.1% |
| Dividend Discount Model (Multi-Stage) | $16.13 | -46.7% |
| Dividend Discount Model (Stable) | $21.74 | -28.2% |
| Earnings Power Value | $4.42 | -85.4% |
Is Tanger Factory Outlet Centers Inc (SKT) undervalued or overvalued?
With the current market price at $30.27, the stock appears to be significantly overvalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Tanger Factory Outlet Centers 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 | 0.73 | 0.79 |
| Cost of equity | 7.2% | 9.3% |
| Cost of debt | 4.0% | 7.0% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.42 | 0.42 |
| After-tax WACC | 6.0% | 8.1% |
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 | $5,016M | 86.4% |
| 10-Year Growth | $28 | $4,721M | 73.4% |
| 5-Year EBITDA | $27 | $4,662M | 85.3% |
| 10-Year EBITDA | $27 | $4,590M | 72.7% |
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 | $141M |
| Discount Rate (WACC) | 8.1% - 6.0% |
| Enterprise Value | $1,748M - $2,359M |
| Net Debt | $1,553M |
| Equity Value | $195M - $806M |
| Outstanding Shares | 113M |
| Fair Value | $2 - $7 |
| Selected Fair Value | $4.42 |
| Metric | Value |
|---|---|
| Market Capitalization | $3426M |
| Enterprise Value | $4979M |
| Trailing P/E | 35.91 |
| Forward P/E | 46.64 |
| Trailing EV/EBITDA | 13.15 |
| Current Dividend Yield | 358.76% |
| Dividend Growth Rate (5Y) | 15.92% |
| Debt-to-Equity Ratio | 0.42 |
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% | $8.40 |
| Discounted Cash Flow (5Y) | 25% | $7.65 |
| Dividend Discount Model (Multi-Stage) | 20% | $3.23 |
| Dividend Discount Model (Stable) | 15% | $3.26 |
| Earnings Power Value | 10% | $0.44 |
| Weighted Average | 100% | $22.98 |
Based on our comprehensive valuation analysis, Tanger Factory Outlet Centers Inc's weighted average intrinsic value is $22.98, which is approximately 24.1% below the current market price of $30.27.
Key investment considerations:
Given these factors, we believe Tanger Factory Outlet Centers Inc is currently significantly overvalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.