Value
3.7/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 3.8 |
| EV/EBITDA | 0.0 |
| p ocf | 6.2 |
| Analyst target | 4.0 |
- ▸P/OCF: 17.7x (FFO proxy — REITs gated off P/E)
EXR · Why this verdict
Why Extra Space Storage (EXR) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score4.7/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company reports operating margins of approximately 27% and converts earnings into free cash flow at 142% of net income — generating more cash than the income statement reflects — a quality signal that partially offsets the expensive headline valuation. Quality breakdown | Free cash flow conversion remains above 120% of net income for the next 12 months, confirming the underlying cash-generation quality is durable. | →Stable |
| CounterElevated free cash flow relative to net income in a REIT can reflect accounting timing rather than sustained operational strength; if interest costs or capital expenditures increase, the gap between reported income and cash generation can narrow quickly. | ||
The stock has formed a golden cross, is trading above all key moving averages with rising volume accumulation, and carries an RSI near 60 — a technical configuration historically associated with continued momentum rather than an immediate reversal. Momentum breakdown | Price stays above the 200-day moving average and on-balance volume continues rising for at least three more months, confirming the breakout holds. | →Stable |
| CounterThe stock has already reached its near-term resistance target with barely 0.3% additional upside remaining, meaning the breakout may be exhausting itself precisely when the technical picture looks strongest. | ||
At the current price, just below the near-term resistance target of approximately $147, the risk/reward ratio has compressed to roughly 0.07-to-1 — offering nearly no reward relative to the roughly 4% downside to the support level, leaving no margin of safety for a new entry. Price targets | Analyst price targets are revised upward above $162, restoring more than 10% upside from current levels and an acceptable risk/reward ratio. | →Stable |
| CounterPrice targets are revised frequently; a strong upcoming earnings report could prompt analyst upgrades that immediately reset the upside and restore an attractive setup. | ||
The stock trades at a price-to-operating-cash-flow of approximately 17.4x while the growth trajectory remains weak, placing it among the more expensive names in its peer set and implying limited room for multiple expansion without a meaningful acceleration in funds-from-operations. Valuation breakdown | Revenue or funds-from-operations growth exceeds 8% year over year for 2 consecutive quarters, providing fundamental justification for the current multiple. | →Stable |
| CounterStorage REITs with strong occupancy and embedded pricing power can sustain premium multiples for extended periods; the current valuation may reflect durable business quality rather than exuberance. | ||
The company reports operating margins of approximately 27% and converts earnings into free cash flow at 142% of net income — generating more cash than the income statement reflects — a quality signal that partially offsets the expensive headline valuation.
→StableQuality breakdown
- Expectation
- Free cash flow conversion remains above 120% of net income for the next 12 months, confirming the underlying cash-generation quality is durable.
CounterElevated free cash flow relative to net income in a REIT can reflect accounting timing rather than sustained operational strength; if interest costs or capital expenditures increase, the gap between reported income and cash generation can narrow quickly.
The stock has formed a golden cross, is trading above all key moving averages with rising volume accumulation, and carries an RSI near 60 — a technical configuration historically associated with continued momentum rather than an immediate reversal.
→StableMomentum breakdown
- Expectation
- Price stays above the 200-day moving average and on-balance volume continues rising for at least three more months, confirming the breakout holds.
CounterThe stock has already reached its near-term resistance target with barely 0.3% additional upside remaining, meaning the breakout may be exhausting itself precisely when the technical picture looks strongest.
At the current price, just below the near-term resistance target of approximately $147, the risk/reward ratio has compressed to roughly 0.07-to-1 — offering nearly no reward relative to the roughly 4% downside to the support level, leaving no margin of safety for a new entry.
→StablePrice targets
- Expectation
- Analyst price targets are revised upward above $162, restoring more than 10% upside from current levels and an acceptable risk/reward ratio.
CounterPrice targets are revised frequently; a strong upcoming earnings report could prompt analyst upgrades that immediately reset the upside and restore an attractive setup.
The stock trades at a price-to-operating-cash-flow of approximately 17.4x while the growth trajectory remains weak, placing it among the more expensive names in its peer set and implying limited room for multiple expansion without a meaningful acceleration in funds-from-operations.
→StableValuation breakdown
- Expectation
- Revenue or funds-from-operations growth exceeds 8% year over year for 2 consecutive quarters, providing fundamental justification for the current multiple.
CounterStorage REITs with strong occupancy and embedded pricing power can sustain premium multiples for extended periods; the current valuation may reflect durable business quality rather than exuberance.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Extra Space Storage has formed a strong technical breakout — golden cross, above all moving averages, rising volume — while generating operating margins of approximately 27% and free cash flow well above reported earnings. However, the stock has reached its near-term price target with only about 0.3% headroom remaining and a risk/reward ratio of roughly 0.07-to-1, making the current setup unfavorable for a new or expanded position despite the underlying business quality.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.3 |
| ROA | 2.3 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 2.8 |
| FCF quality | 9.7 |
| Moat | 5.2 |
| Rule of 40 | 7.3 |
| Piotroski F | 6.7 |
- ▸Strong margins: 27%
- ▸Excellent cash conversion: 142% FCF/NI
- ▸No competitive moat
- ▸Rule of 40: 42 (pass)
Growth
1.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.5 |
| EPS growth | 0.0 |
Momentum
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 0.5 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| structured analyst | 4.2 |
| Analyst rating | 7.5 |
| Price target | 6.1 |
| erm sentiment | 5.0 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider selling — $495,000 (0.002% of mkt cap)
Peer rank
4.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.3 |
| quality rank | 4.4 |
| growth rank | 4.4 |
Technical
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 6.1 |
| support resistance | 5.4 |
| 52w position | 9.2 |
Risk (lower is worse)
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.4 |
| days to cover | 5.9 |
| volatility | 7.2 |
| put call | 10.0 |
| implied vol | 5.6 |
| beta | 6.2 |
| debt equity | 5.1 |
Catalyst
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 5.6 |
| earnings timing | 5.0 |
| surprise avg | 0.9 |
| dividend safety | 5.2 |
| news activity | 5.0 |
- ▸Dividend: 434.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:22d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:4.4<4.5
- ASYMMETRY:-0.7=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.69
Upside
-3.5%
Downside
5.0%
Sizing output
AVOID
SetupRange Bound — RSI 44 mid-range, Bollinger mid-band
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 4.7 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Technical at 6.9) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:4.4<4.5, ASYMMETRY:-0.7=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.69 — supplementary context, not the trigger for this path.
The strongest dimensions are Technical at 6.9, Risk (lower is worse) at 6.9, and Quality at 6.6; the weakest are Growth at 1.8, Value at 3.7, and Momentum at 4.4. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.69 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Technical Breakout Momentum
Trip ifPrice falls below the 200-day moving average for 2 consecutive weeks.
- P2Price At Near Term Target
Trip ifAnalyst consensus price target is revised upward above $162, restoring more than 10% upside from the current price of $146.65.
- P3Expensive Valuation Weak Growth
Trip ifRevenue or funds-from-operations growth exceeds 8% year over year for 2 consecutive quarters.
- P4Strong Margins Cash Conversion
Trip ifFree cash flow falls below 100% of net income for 2 consecutive quarters.