• Wondering if Agree Realty at around US$76.61 is offering fair value or a potential bargain, especially after a solid multi year run? This article breaks down what the current price may be implying.
• The stock recently closed at US$76.61, with returns of 3.0% over 7 days, a 5.8% decline over 30 days, 6.2% year to date, 7.3% over 1 year, 31.2% over 3 years and 39.6% over 5 years. This gives you a mixed picture across different timeframes.
• Recent coverage around Agree Realty has focused on its position within the U.S. real estate sector and how investors are weighing its income profile against interest rate moves. This context helps explain why the share price has seen both short term weakness and longer term positive returns as sentiment around listed property companies has shifted.
• The company currently has a valuation score of 2 out of 6. The next sections will break down what that says across different valuation methods and then finish with a framework that can help you make even more sense of those numbers.

Agree Realty scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Agree Realty Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a company might be worth today by projecting its future adjusted funds from operations, then discounting those cash flows back into current dollars.

For Agree Realty, the latest twelve month free cash flow is about $482.8 million. Using a 2 stage Free Cash Flow to Equity model based on adjusted funds from operations, analysts and extrapolated estimates point to free cash flow reaching about $934.3 million in 2030, with a series of projected cash flows between 2026 and 2035 that are discounted back to today's value.

Putting all of those discounted cash flows together, the DCF model produces an estimated intrinsic value of about $172.78 per share. Compared with the recent share price of $76.61, this estimate suggests the stock is around 55.7% below that intrinsic value estimate, indicating a sizeable gap between the model output and where the market is currently pricing the shares.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Agree Realty is undervalued by 55.7%. Track this in your watchlist or portfolio, or discover 58 more high quality undervalued stocks.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Agree Realty.

Approach 2: Agree Realty Price vs Earnings

For a profitable company, the P/E ratio is a useful way to think about what you are paying for each dollar of earnings. A higher P/E often reflects stronger expected growth or lower perceived risk, while a lower P/E can point to more modest growth expectations or higher risk.

Agree Realty currently trades on a P/E of 46.73x. This is above the Retail REITs industry average P/E of 26.46x and also above the peer group average of 23.56x. On those simple comparisons, the shares look more expensive than many peers.

Simply Wall St’s Fair Ratio for Agree Realty is 36.04x. This is a proprietary estimate of what the P/E might be, given factors such as earnings growth characteristics, profit margins, industry, market cap and company specific risks. It can be more informative than a plain peer or industry comparison because it adjusts the benchmark to the company’s own profile instead of treating all REITs as identical.

With a current P/E of 46.73x versus a Fair Ratio of 36.04x, Agree Realty’s shares appear to be priced above that tailored benchmark.

Result: OVERVALUED

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 20 top founder-led companies.

Upgrade Your Decision Making: Choose your Agree Realty Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Narratives on Simply Wall St’s Community page let you turn your view of Agree Realty into a clear story that links the business, a set of revenue, earnings and margin assumptions, and a fair value. This is then compared to today’s price to help you decide if the gap between value and price is wide enough for you. The platform updates those Narratives as new earnings or news arrive. For example, one investor might focus on essential retail demand and arrive at a fair value near the higher analyst target of US$92.0, while another might focus on tenant or acquisition risks and sit closer to the lower US$75.0 target.

Do you think there's more to the story for Agree Realty? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com

Disclaimer:This article represents the opinion of the author only. It does not represent the opinion of Webull, nor should it be viewed as an indication that Webull either agrees with or confirms the truthfulness or accuracy of the information. It should not be considered as investment advice from Webull or anyone else, nor should it be used as the basis of any investment decision.