EXR

EXR is the largest US self-storage REIT and the FY2025 print is solid: diluted EPS $4.59 (+13.9% YoY), net income $974M (+14.0%), operating income $1.41B (+6.8%), and operating cash flow $1.85B — enough to comfortably fund the $1.37B common dividend (essentially flat YoY) plus $150M of buybacks. The balance sheet is normal for a property REIT (liabilities/equity 1.11x; $29.3B assets), and management's MD&A highlights the operating moat that drives these numbers: clustered, high-visibility portfolios, in-house revenue-management systems that 'analyze, set and adjust rental rates daily,' and economies of scale around population centers. Note the headline P/S of 240x and 'operating margin' of 1091% are artifacts — the SEC tag captures only the tenant-reinsurance revenue line ($129M), not the rental income from leases, which is the bulk of the business.

The problem is price. At $147.19 the stock trades at 32.1x trailing diluted EPS, which is a premium multiple for a REIT growing the top line ~7% and where ROE is only 7.3%. Storage REITs have historically deserved a premium for pricing power and low capex intensity, but FY2025 capex jumped 17.3% to $562M while D&A actually fell 8.7% — a sign that growth requires more reinvestment than it used to.