What's Driving DigitalBridge Group Inc's Surprising 30% Stock Rally?

DigitalBridge Group Inc (DBRG, Financial), a global digital infrastructure firm, has seen a significant surge in its stock price over the past three months. Despite a 2.70% decrease over the past week, the stock has experienced a 29.65% increase over the past three months, reflecting a strong market performance. The company's GF Value, currently at $23.5, suggests that the stock is modestly undervalued. This is a stark contrast to the GF Value of $4.61 three months ago, which indicated that the stock was significantly overvalued. The GF Value, defined by GuruFocus.com, calculates a stock's intrinsic value using historical multiples, past performance adjustments, and future business estimates.

Company Overview

DigitalBridge Group Inc operates primarily in the United States, offering services in investment management, operating, and corporate and other services. The company's operating segment, which owns and leases digital assets, accounts for the majority of the firm's revenue. This strategic focus on digital infrastructure has allowed the company to carve out a niche in the real estate industry. 1707053187493527552.png

Profitability Analysis

With a Profitability Rank of 5/10, DigitalBridge Group Inc demonstrates average profitability. The company's Operating Margin stands at -25.55%, which is better than 12.68% of companies in the industry. Similarly, the company's ROE and ROA are -16.58% and -2.32% respectively, outperforming a significant percentage of industry peers. The company's ROIC of -3.32% is also better than 10.63% of companies in the industry. Over the past 10 years, the company has been profitable for 4 years, better than 20.6% of companies in the industry. 1707053210717388800.png

Growth Prospects

DigitalBridge Group Inc's Growth Rank of 4/10 suggests below-average growth. However, the company's 3-Year Revenue Growth Rate per Share of 144.20% is significantly positive, outperforming 98.03% of companies in the industry. Despite a negative 5-Year Revenue Growth Rate per Share of -9.20%, the company's 3-Year and 5-Year EPS without NRI Growth Rates are both positive and better than a significant percentage of companies in the industry. 1707053230602584064.png

Major Stockholders

Chuck Akre (Trades, Portfolio), Chuck Royce (Trades, Portfolio), and Steven Cohen (Trades, Portfolio) are the top three holders of DigitalBridge Group Inc's stock. Chuck Akre (Trades, Portfolio) holds the largest share with 5,020,631 shares, accounting for 3.09% of the total shares. Chuck Royce (Trades, Portfolio) and Steven Cohen (Trades, Portfolio) hold 602,862 and 430,000 shares respectively, representing 0.37% and 0.26% of the total shares.

Competitive Landscape

DigitalBridge Group Inc operates in a competitive industry with major competitors including Broadstone Net Lease Inc (BNL, Financial) with a market cap of $2.7 billion, Essential Properties Realty Trust Inc (EPRT, Financial) with a market cap of $3.36 billion, and PS Business Parks Inc (PSB, Financial) with a market cap of $5.18 billion.

Conclusion

In conclusion, DigitalBridge Group Inc's stock has shown a strong performance over the past three months, despite a slight decrease over the past week. The company's profitability and growth prospects, along with its competitive position in the industry, make it a stock to watch. However, investors should also consider the company's negative operating margin and ROE, as well as the competitive landscape, before making investment decisions.

Disclosures

I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.