Using an unlevered Free Cash Flow to Firm (FCFF) model, we project Extra Space Storage Inc.'s cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 2.4% to 4.5% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 133, DPO 163, DIO 60). At a 7.3% WACC with mid-year discounting, the terminal value (75% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 15.4x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $113.36 per share, suggesting EXR is fairly valued by 13.1% at the current price of $130.39.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2026 | 2027 | 2028 | 2029 | 2030 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | 1,544 | 1,591 | 1,669 | 1,854 | 1,936 | 1,985 |
| (−) Net Interest | 518 | 534 | 560 | 622 | 649 | 666 |
| (+) D&A | 17 | 21 | 21 | 22 | 24 | 24 |
| EBITDA | 2,078 | 2,146 | 2,250 | 2,498 | 2,609 | 2,675 |
| (−) Tax | 45 | 46 | 48 | 54 | 56 | — |
| (−) CapEx | 22 | 23 | 24 | 27 | 28 | — |
| (−) ΔWC | -707 | 29 | 48 | 113 | 50 | — |
| Free Cash Flow (FCF) | 2,718 | 2,048 | 2,130 | 2,305 | 2,475 | — |
| Peers' EBITDA Multiple | 15.4x | |||||
| Terminal Value | 41,217 | |||||
| WACC / Discount Rate | 7.29% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | 2,624 | 1,843 | 1,786 | 1,802 | 1,804 | 28,998 |
| Enterprise Value | 38,857 | |||||
| Projection Period | 9,859 | 25.4% | ||||
| Terminal Value | 28,998 | 74.6% | ||||
| (−) Current Net Debt | 14,833 | |||||
| Equity Value | 24,024 | |||||
| (÷) Outstanding Shares | 212M | |||||
| Fair Price | $113 | -13.0% | ||||
| WACC \ EV/EBITDA Exit Multiple | 11.4x | 13.4x | 15.4x | 17.4x | 19.4x |
|---|---|---|---|---|---|
| 5.3% | $90 | $109 | $129 | $148 | $168 |
| 6.3% | $84 | $102 | $121 | $140 | $158 |
| 7.3% | $78 | $96 | $113 | $131 | $149 |
| 8.3% | $72 | $89 | $106 | $123 | $140 |
| 9.3% | $67 | $83 | $99 | $116 | $132 |
Current price: $130.39. Green = undervalued, Red = overvalued.
Based on default parameters
This is an unlevered Free Cash Flow to Firm (FCFF) model with a 5-year projection period. Revenue, expenses, D&A, and working capital are projected using the same line-by-line approach as the Growth Exit models. The key difference is the terminal value methodology: instead of assuming perpetual cash flow growth, the terminal value is calculated by applying the industry peer median EV/EBITDA multiple to the projected Year 6 EBITDA.
Using a peer exit multiple anchors the terminal value to how the market currently prices comparable companies, rather than relying on a theoretical perpetual growth assumption. This approach captures relative valuation dynamics and is particularly useful when a company is expected to converge toward industry-average profitability over time. The sensitivity matrix shows how fair value changes across different WACC and EV/EBITDA multiple scenarios.