OUTFRONT Media Inc. (OUT): what the price assumes

In the published model solve dated 2026-Q2, anchored at $32.06, OUTFRONT Media Inc. (OUT) is priced for today's economics sustained for ~8.2 years. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-06-27.

Generated: 2026-08-08 · Exported: 2026-08-09 · Source: https://boothcheck.com/report/OUT

Headline

FieldValue
TickerOUT
CompanyOUTFRONT Media Inc.
Current price$32.06/sh
CompositionBillboard 76% / Transit 24%

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basisreit
Top-of-range FFO growth must hold for8.2y
Price-to-FFO18.9x
FFO yield5.3%

Solve inputs: computed at a 12.7% cost of equity; growth searched up to the 15% AFFO-growth ceiling; each 1pp moves the implied horizon ~2.1 years.

Reconcile: at the x-ray's 9.3% required return this reads ~7.6%/yr; the models below use their own rates.

How unusual the bet is: extreme

ReferenceValue
vs own history-0.24σ
cohort percentile (of 105 peers)85
sustained it ~8.2 years at this level55%

Valuation X-Ray

The price is supported by earnings-power value, while asset-based lands below the price. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset2.28x4expensive
Earnings1.13x1expensive
Relative1.35x1expensive
Growth1.34x1expensive

Families that justify the price: Earnings Families that call it expensive: Asset

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.0%); the inversion above states its own rate.

Per-Model Detail (n=7)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$14.992.14xnoFCF base $0.3B, growth 3% (input: historical growth), terminal g 3.5%, WACC 7.0%, 5yr projection
DCF Exit MultipleGrowth$24.371.32xnoExit EV/EBITDA: 17.8x / 19.8x / 21.8x (bear / base = today's held flat / bull), 5yr
Relative ValuationRelative——noP/E 35x (static sector reference · 2026-04), scenarios: 29.4x / 35.0x / 40.6x (bear / base = reference held flat / bull), EV/EBITDA 20x
Simple DDMGrowth——no—
Two-Stage DDMGrowth$23.981.34xyesStage 1: 6% for 5yr, Stage 2: 3.5% perpetual
Simple Excess ReturnAsset$11.402.81xyesBV/sh $3.73, ROE (TTM) 28.3%, ke 9.3%
Two-Stage Excess ReturnAsset$20.361.57xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$20.491.56xnoRev $1.9B, growth 3% (input: historical growth; tapered), Terminal P/S: 2.5x / 3.0x / 3.5x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$20.281.58xnoFFO/share $1.69, growth 6% (input: historical FFO/share growth, 10y median), PEG=5.24 (Overvalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$0.013206.00xnoNormalized EBIT (5y avg op income, one-time charges added back) $0.31B × (1−21%) / WACC 7.0% → EPV (no growth)
Residual IncomeAsset$17.221.86xyesBV $3.73 + 5yr PV of (ROE (TTM) 28.3% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$11.912.69xyes√(22.5 × FFO/share $1.69 × BVPS $3.73) — Graham's conservative floor
EV/EBITDA RelativeRelative——noEBITDA $0.49B × sector EV/EBITDA 20.0x
FCF YieldEarnings$0.013206.00xyesFCF $253.6M / Kₑ 9.3% — zero-growth perpetuity (excluded from median)
SBC-Adj FCF YieldEarnings$0.013206.00xyesSBC-adj FCF $0.23B (FCF $0.25B − SBC $0.03B) capitalized at Kₑ (excluded from median)
Ben Graham FormulaEarnings$28.491.13xyesFFO/share $1.69 × (8.5 + 2×5.8%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$0.4965.43xyesBV $3.73 × (ROIC 0.9% / WACC 7.0%) (excluded from median)
P/Sales SectorRelative——noRevenue $1.87B × sector P/S 6.0x
PEG Fair ValueRelative$14.722.18xnoFFO/share $1.69 × (PEG 1.5 × growth 5.8% (input: historical FFO/share growth, 10y median)) → PE 8.7x
Earnings YieldEarnings$18.271.75xnoFFO/share $1.69 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative$23.771.35xyesFFO/share $1.69 × 14.1x P/FFO (route cohort median, n=85); FFO $0.30B (FFO incl. D&A + impairments, FY2025, companyfacts), shares 177M
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

UnitRoleValuation basisRevenueReported profitValue evidenceStatus
Billboardoperatingenterprise$1.4b—withheldunresolved no unit value
Transitoperatingenterprise$431.2m—withheldunresolved no unit value

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

FieldValue
Net debt (REIT basis)$2.5b
Net debt / FFO8.41x
Funds from operations (trailing)$299.3m
Share count CAGR (dilution)3.9%
Burning cashno

REIT basis: leverage is read against funds from operations (FFO), not depreciation-gutted operating income. The header's implied growth runs on ADJUSTED FFO — FFO minus recurring maintenance capex — so the header's multiple and this leverage ratio use bases that differ by that capex; neither substitutes for the other. Interest expense is not separately reported in the cached statements, so fixed-charge coverage cannot be computed.

Bullet Takeaways

Bull Case

Valuing Outfront starts with understanding what kind of real estate it owns: not buildings, but the right to display advertising on billboards and in transit systems. That makes it a REIT in legal form but an advertising-cyclical business in economic substance, valued on adjusted funds from operations rather than earnings or net asset value. On that lens the recent quarter was a standout. Q1 2026 consolidated revenue grew 10%, adjusted OIBDA rose 56% to about $100 million, and AFFO more than doubled to $61 million (Outfront Q1 2026, Investing.com). A REIT compounding AFFO at that pace is exactly what justifies a premium multiple, and the methods that price the cash earnings (Relative Valuation $47, Two-Stage DDM $43, EV/EBITDA Relative $33) sit at or above the $31.19 price (June 27, 2026).

The growth engine is transit and digital, the two parts the market historically underpriced. Transit revenue grew 22% in the quarter, led by the New York MTA at over 26% growth, and management said the MTA is expected to exceed its baseline revenue level in 2026, making incremental revenue especially accretive on a cash basis (Outfront Q1 2026, Motley Fool). Digital revenue rose over 11% and now represents about a third of total revenue, with programmatic and automated direct sales up nearly 40%. The filings describe digital displays as attractive to customers because they allow the development of richer campaigns (FY2025 10-K, accession 0001579877-26-000008). Converting static billboards to digital lifts revenue per location without proportional capital, which is the structural margin story.

The MTA economics, long a drag, are turning into a tailwind. Management noted that incremental transit franchise expense above the minimum annual guarantee will not be paid in cash but used to reduce Outfront's significant recoupable investment balance with the MTA, meaning growth above baseline effectively pays down past investment rather than costing cash. With management raising full-year guidance to mid-teens AFFO growth off a 2025 base of $338 million, and the dividend supported by rising cash flow, the bull case is a recovering, digitizing out-of-home franchise in the largest US transit market, priced for growth the recent quarter is delivering.

Bear Case

The moat-erosion question is the right place to start, because out-of-home advertising sits in the path of the same forces hollowing out other legacy ad media. Advertising dollars chase measurable, targetable, digital impressions, and while Outfront is digitizing its displays, a billboard is still a one-to-many medium competing against streaming, social, and retail-media networks that offer precise attribution. The structural risk is that out-of-home's share of the ad budget slowly erodes, or that pricing power weakens, even as Outfront spends capital converting boards to digital. The price gives the company no benefit of the doubt on this: at about 22x AFFO it sits at the very top of the REIT peer group, and only about 55% of REITs growing at the implied pace sustained it over an eight-year window. The market is paying a premium multiple for a business in a contested medium.

The leverage is the harder, more immediate problem. Net debt sits at roughly 8.4x FFO, a heavy load for a business with advertising-cyclical revenue, and interest expense is not separately broken out in the cached statements, so fixed-charge coverage cannot be cleanly computed. A leveraged REIT in a cyclical industry is doubly exposed: an advertising recession compresses AFFO at the same moment the fixed debt service stays put, and refinancing in a higher-rate environment raises the cost of carrying that balance. The asset-based methods underline how little tangible cushion there is: book value per share is only $3.73, and the asset-based reads land near $11 to $20, far below the price. There is no net-asset-value floor to fall back to if the cash flows disappoint.

The transit franchise itself is a double-edged asset. The MTA contract drove the 22% transit growth, but it is a capital-intensive, contractually complex obligation with a large recoupable investment balance, and Outfront's fortunes in its biggest growth market are tied to a single government counterparty and the ridership that fills those stations. A downturn in New York transit ridership, or a renegotiation, would hit the segment the bull case leans on hardest. The Q1 results were also flattered by $13.5 million of one-time condemnation revenue, so the underlying growth rate is softer than the headline. The peer cohort is a mix of specialty REITs (a prison operator, a hotel REIT, a shopping-center REIT) rather than clean out-of-home comparables, which makes the relative read noisier. The bear case is straightforward: a premium multiple, on a leveraged balance sheet, in a medium under quiet pressure, with the growth concentrated in one contract.

Valuation

Outfront is valued as a REIT, on adjusted funds from operations rather than earnings, and the price sits at the demanding end of that frame. The cash-earnings methods bracket or exceed the $31.19 price (Relative Valuation $47, Two-Stage DDM $43, EV/EBITDA Relative $33, FFO Multiple $23), while the asset-based methods sit well below it (Two-Stage Excess Return $20, Residual Income $17, Graham Number $12), reflecting a thin $3.73 book value. Several methods are distorted and should be set aside: the negative-retained-earnings flag (normal for a REIT that distributes most of its cash) knocks out the projection-based methods, and the FCF-yield and EPV figures print nonsensical outliers because GAAP earnings are depressed by depreciation that AFFO adds back.

The inversion is the clearest read. A REIT is valued on adjusted funds from operations, and at about 22x AFFO the price implies Outfront grows AFFO at the top of the REIT range for roughly eight years, computed at a 12.8% cost of equity with growth searched up to a 15% ceiling, where each point of cost of equity moves the implied horizon about 2 years. That places the priced-in assumption at the most demanding end of the scale: the price-to-AFFO sits at the very top of the REIT group, and the implied eight-year run of top-of-range growth is something only a bit over half of comparable REITs sustained. The valuation rests entirely on transit and digital growth continuing at the recent pace while the 8.4x-FFO leverage stays serviceable. It is priced for the bull case to play out, with little margin if advertising softens.

Catalysts

Outfront reported Q1 2026 results on May 7, 2026, with consolidated revenue up 10%, adjusted OIBDA up 56% to about $100 million, and AFFO more than doubling to $61 million; transit revenue grew 22% (New York MTA up over 26%), billboard rose 7%, and results included $13.5 million of one-time condemnation revenue (Outfront Q1 2026, Investing.com). Digital revenue rose over 11% to about a third of total, with programmatic and automated direct sales up nearly 40% (Outfront Q1 2026, Motley Fool).

The forward setup is a raised guide centered on transit and digital. Management now expects mid-teens AFFO growth for 2026 (off a 2025 base of $338 million) and Q2 revenue growth above 10%, with the MTA expected to exceed its baseline revenue level so incremental revenue is accretive on a cash basis. The catalysts to track are the MTA transit ramp and the drawdown of the recoupable investment balance, the digital conversion pace and programmatic mix, the broader out-of-home advertising demand environment, and the trajectory of the dividend as AFFO grows. On the risk side, watch the leverage at about 8.4x FFO and any refinancing, since a leveraged advertising-cyclical REIT is most exposed if ad spending softens while debt service stays fixed. The next quarterly print is the test of whether the mid-teens AFFO guide holds once the one-time condemnation revenue rolls off.

Peer Cohorts (Per Segment, With Filing Citations)

Billboard / Transit (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

View the full interactive OUT report on boothcheck