UDR, Inc. (UDR): what the price requires
At today's price, UDR, Inc. (UDR) is priced for -0.2% FFO growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/UDR
Headline
| Field | Value |
|---|---|
| Ticker | UDR |
| Company | UDR, Inc. |
| Current price | $40.15/sh |
| Composition | Same-Store Communities 95% / Non-Mature Communities/Other 5% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | reit |
| Implied FFO growth | -0.2% |
| Price-to-FFO | 12.4x |
| FFO yield | 8.1% |
Solve inputs: computed at a 9.3% cost of equity with 4% terminal growth over a 5-year stage; each 1pp of cost of equity moves the implied growth ~4.1pp.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.48σ |
| cohort percentile (of 88 peers) | 58 |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple; asset-based/earnings-power land below the price.
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.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 1.99x | 5 | expensive |
| Earnings | 3.64x | 4 | expensive |
| Relative | 0.76x | 4 | justifies |
| Growth | 1.37x | 4 | expensive |
Families that justify the price: Relative Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 6.7%); the inversion above states its own rate.
Per-Model Detail (n=17)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $36.46 | 1.10x | yes | FCF base $0.9B, growth 2% (input: historical growth), terminal g 2.1%, WACC 6.7%, 5yr projection |
| DCF Exit Multiple | Growth | $35.26 | 1.14x | yes | Exit EV/EBITDA: 12.1x / 14.1x / 16.1x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $69.28 | 0.58x | yes | P/E 26.03x (blended: static sector reference 35x + trailing (TTM) 13x), scenarios: 22.0x / 26.0x / 30.0x (bear / base = reference held flat / bull), EV/EBITDA 20x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | $16.65 | 2.41x | yes | Stage 1: -10% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $16.06 | 2.50x | yes | BV/sh $9.95, ROE (TTM) 14.9%, ke 9.3% |
| Two-Stage Excess Return | Asset | $20.18 | 1.99x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $25.17 | 1.59x | yes | Rev $1.7B, growth 2% (input: historical growth; tapered), Terminal P/S: 6.5x / 7.7x / 8.9x (bear / base = today's held flat / bull, cap 8x) |
| Growth-Adjusted P/E | Relative | — | — | no | — |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $1.90 | 21.13x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.43B × (1−0%) / WACC 6.7% → EPV (no growth) (excluded from median) |
| Residual Income | Asset | $20.71 | 1.94x | yes | BV $9.95 + 5yr PV of (ROE (TTM) 14.9% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $26.72 | 1.50x | yes | √(22.5 × FFO/share $3.19 × BVPS $9.95) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $63.84 | 0.63x | yes | EBITDA $1.34B × sector EV/EBITDA 20.0x |
| FCF Yield | Earnings | $11.51 | 3.49x | yes | FCF $875.4M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $10.58 | 3.79x | yes | SBC-adj FCF $0.85B (FCF $0.88B − SBC $0.03B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $2.67 | 15.04x | yes | FFO/share $3.19 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $3.78 | 10.62x | yes | BV $9.95 × (ROIC 2.6% / WACC 6.7%) |
| P/Sales Sector | Relative | $31.18 | 1.29x | yes | Revenue $1.72B × sector P/S 6.0x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | $34.49 | 1.16x | yes | FFO/share $3.19 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | $45.20 | 0.89x | yes | FFO/share $3.19 × 14.2x P/FFO (route cohort median, n=85); FFO $1.05B (FFO incl. D&A + impairments, FY2025, companyfacts), shares 330M |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt (REIT basis) | $5.7b |
| Net debt / FFO | 5.38x |
| Fixed-charge coverage (FFO basis) | 6.4x |
| Funds from operations (trailing) | $1.1b |
| Share count CAGR (dilution) | 0.8% |
| Burning cash | no |
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.
Bullet Takeaways
- UDR runs a coast-to-coast Class-A apartment platform that just became the first residential REIT to pay a monthly dividend, a retention-and-pricing machine selling the same product across coastal and Sun Belt markets rather than betting on a single region.
- The near-term squeeze is real: same-store revenue rose 0.9% in the first quarter while operating expenses climbed 4.4%, pushing same-store NOI down 0.8%, and full-year guidance allows for NOI anywhere from a 1.0% decline to 1.25% growth.
- Watch the same-store NOI line at the July 29 2026 print: the price is paying for an apartment platform that converts 96.6% occupancy into renewed rent growth, and that line, not occupancy itself, is what has to turn.
Bull Case
The bull case for UDR rests on a platform that sells the same thing in many places at once. Apartments in Boston and Orange County and Dallas and Tampa do not move on the same cycle, and UDR owns Class-A communities across both coasts and the Sun Belt precisely so that a soft quarter in one metro can be offset by a firm one in another. That geographic spread is the moat. It is dull, and dullness is the point: a landlord that keeps its buildings full and raises rents a little every year, in enough markets that no single one can sink the whole, is a compounding machine that does not need a story to work.
The operating evidence is that the machine still runs even under cost pressure. Physical occupancy held at 96.6% in the first quarter, and blended lease rate growth came in at 1.6%, which says residents are staying and accepting modest increases rather than walking. High retention is worth more than it looks. Turning an apartment costs money in lost rent, make-ready expense, and concessions to the next tenant, so a portfolio that holds its residents protects the NOI line from the bottom up. That is the unglamorous engine the bull is buying.
Capital allocation has been disciplined in a way that compounds for the holder. UDR sold $362 million of apartment communities and bought back $150 million of its own stock in the first quarter alone, $268 million repurchased since September. Selling assets at private-market prices and retiring shares at the public quote is the trade a REIT makes when its own stock is cheaper than its buildings, and the share count tells the story: roughly flat to slightly up over the full window, which for a REIT that funds growth with equity is restraint, not expansion for its own sake.
Then there is the signal management sent on the dividend. In July 2026 UDR becomes the first residential REIT to pay monthly rather than quarterly, on an annualized rate of $1.74. A company does not move to monthly payments unless it is confident the cash flow behind them is steady. For income-oriented holders that confidence, backed by 96.6% occupancy and a fixed-charge coverage that comfortably clears its obligations, is the substance of the bull case: a quality operator paying a covered, now-monthly check while it waits for the expense-versus-rent gap to close.
Bear Case
Start with the line that is actually moving the wrong way. Same-store NOI fell 0.8% in the first quarter, because same-store revenue grew 0.9% while operating expenses rose 4.4%. NOI is the rent that survives after the cost of running the buildings, and right now the cost of running them is outpacing the rent. For a landlord, that is the whole game in one number, and it is currently negative.
The reason that matters at this price is what the price needs from it. At about 15 times the cash flow left after the recurring capital it takes to keep the apartments rentable, today's quote yields a little over six and a half cents of that cash for every dollar invested, and the multiple holds together only if the cash flow per share roughly holds its ground rather than eroding. The price is not demanding heroics here. It is demanding that the recent slide stop. Full-year guidance frames how live that question is: same-store NOI could land anywhere from a 1.0% decline to 1.25% growth, with expenses still guided to rise 3.0% to 4.5%. If the expense-versus-rent gap proves sticky rather than seasonal, the cash flow the multiple is paying for shrinks, and a multiple paying for stability re-rates down when stability is what slips.
The macro variable sits on top of that. UDR carries net debt of about $5.7 billion against funds from operations of roughly $1.05 billion, a little over five times FFO, which is ordinary for the sector and well covered, fixed charges earned more than six times over. But leverage at that level ties the cash flow to the rate environment. A REIT does not run out of cash the way a money-losing operating company does, since it collects rent every month; the risk is refinancing maturing debt at higher coupons, which skims off the top of the same NOI line that is already under pressure. The two squeezes compound. If operating costs stay hot and refinancing costs climb, the gap between what the buildings earn and what the balance sheet costs to carry widens from both ends.
The honest read on the methods is that this is not an overvaluation alarm. Comparable real-estate multiples actually read UDR as cheaper than the broader group, and the forward-growth framing lands close to the price; it is the asset-value and trailing earnings-power lenses that call it rich, and earnings power is the wrong lens for a REIT because it ignores the depreciation add-back that makes apartment economics legible. So the bear is not "the price is detached from value." It is narrower and more concrete: the price is paying for an apartment platform to resume growing the cash flow it just stopped growing, and the cost line has to cooperate for that to happen.
Valuation
The right way to read an apartment REIT's price is against the cash flow left after the recurring capital it takes to keep the units rentable, what the industry calls AFFO, and on that basis UDR trades at about 15 times. Turn the multiple around and the price hands the buyer roughly a six-and-a-half-cent yield on that after-capital cash flow. That is the headline number for this company, and it is a moderate one: not the rich multiple a fast grower carries, not the depressed multiple of a distressed landlord, but the price of a stabilized portfolio that the market expects to keep collecting and keep paying.
What that multiple embeds about growth is the more revealing part. Inverted, the price requires almost nothing from the AFFO line, implying it roughly holds flat to a touch lower rather than compounding from here. The market is not paying UDR for acceleration. It is paying for durability, for the after-capital cash flow to stop sliding and steady out near where it is. Plain funds from operations, the gross figure before that maintenance capital is netted out, sits at a lower multiple of about 12 times, but that figure flatters the picture by ignoring the money that keeps the apartments leasable. AFFO is the honest denominator, and it is the one the price is actually leaning on.
How far past the evidence the price sits depends entirely on which lens you trust, and the lenses disagree in an informative pattern. Compared with the broader real-estate group on peer multiples, UDR reads as cheaper than average. The forward-growth framing lands right around the price. It is the asset-value lens, anchoring on book equity and the buildings, and the trailing earnings-power lens that call the price rich, and the second of those is structurally the wrong tool for a REIT, since reported earnings are gutted by the depreciation that apartment buildings do not actually suffer in cash terms. Strip earnings power out as the category error it is, and the spread narrows to a fairly priced quality operator whose value hinges on one line resuming growth.
That line is same-store NOI, and it is the concrete "what has to be true." The price is paying for the platform to convert 96.6% occupancy and 1.6% blended lease growth into renewed NOI, and the first quarter went the other way, NOI down 0.8% as expenses outran rent. The balance sheet frames the downside without driving it: net debt of about $5.7 billion against roughly $1.05 billion of FFO, a little over five times, with fixed charges covered more than six times over. A REIT is not at risk of running out of cash; the exposure is refinancing into higher rates against an NOI line already flat. The sell-side average target near $40 sits modestly above today's quote and carries a Hold consensus, which credits the same thing the after-capital multiple does: a steady operator with a covered, now-monthly dividend, waiting on the cost line to turn.
Catalysts
The next scheduled event is the second-quarter print on July 29 2026, and the single line to watch is same-store NOI. The first quarter showed it down 0.8% as a 4.4% jump in operating expenses overran 0.9% revenue growth, so the question the next report answers is whether that gap was a near-term cost spike or a new run-rate. Management's own framing for the second quarter is FFO as adjusted of $0.62 to $0.64 per share, and the full-year AFFO guidance of $2.47 to $2.57 per share is the band the market will measure the print against.
July also brings a structural change to the payout. UDR becomes the first residential REIT to pay a monthly dividend, starting in July 2026, on an annualized rate of $1.74 with a $0.145 cash dividend carrying a July 17 2026 ex-date. The shift itself is the catalyst for income-focused holders: a company moves to monthly payments when it wants to advertise the steadiness of its cash flow.
On the capital-recycling front, watch whether the disposition-and-buyback program continues. UDR sold $362 million of communities and repurchased $150 million of stock in the first quarter, $268 million bought back since September; further sales into a firm private market funding more buybacks would keep tightening the share count. The sell-side sits at a Hold with an average target near $40.35, so the rating itself is not a near-term mover; the NOI line is what would change minds.
Peer Cohorts (Per Segment, With Filing Citations)
Same-Store Communities / Non-Mature Communities/Other (reported)
- CPT (CAMDEN PROPERTY TRUST)
- (no filing in the citation store)
- MAA (MID-AMERICA APARTMENT COMMUNITIES, INC.)
- (no filing in the citation store)
- AVB (AVALONBAY COMMUNITIES, INC.)
- (no filing in the citation store)
- EQR (EQUITY RESIDENTIAL)
- (no filing in the citation store)
- ESS (ESSEX PROPERTY TRUST, INC.)
- (no filing in the citation store)
- IRT (INDEPENDENCE REALTY TRUST, INC.)
- (no filing in the citation store)
- NXRT (NexPoint Residential Trust, Inc.)
- (no filing in the citation store)
- VRE (VERIS RESIDENTIAL, INC.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
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.
Sources
UDR Q1 2026 results, April 28 2026 · Simply Wall St dividend data; UDR dividend declaration, July 2026 · public.com analyst data, May 2026 · UDR Q1 2026 guidance, April 28 2026 · UDR dividend declaration; Simply Wall St dividend data, 2026 · public.com analyst data; MarketBeat consensus, May 2026