Digital Realty to Post Q3 Earnings: What to Expect From the Stock?

Digital Realty Trust DLR is slated to report third-quarter 2025 results on Oct. 23, after the closing bell. The quarterly results are expected to reflect year-over-year growth in both revenues and funds from operations (FFO) per share.This Austin, TX-based data center real estate investment trust (REIT) reported a core FFO per share of $1.87 in the prior quarter, surpassing the Zacks Consensus Estimate of $1.74. Results reflected steady leasing momentum with better rental rates amid rising demand.Over the trailing four quarters, Digital Realty’s core FFO per share surpassed the Zacks Consensus Estimate on three occasions and met once, with the average beat being 2.89%. This is depicted in the chart below:Digital Realty Trust, Inc. Price and EPS Surprise Digital Realty Trust, Inc. price-eps-surprise | Digital Realty Trust, Inc. QuoteFactors at Play and Projections for DLRWith the growing usage of cloud computing, Internet of Things, Big Data and the proliferation of Artificial Intelligence (AI), the prevalence of data centers is becoming ubiquitous. In effect, Digital Realty, with its unmatched global footprint of data centers, is experiencing healthy leasing activity momentum, aiding its revenue growth in the to-be-reported quarter.Moreover, DLR’s continuous efforts to provide the required infrastructure to fast-track the adoption of AI across businesses to improve their performance through innovations go a long way to secure strategic partnerships with newer clients and aid its leasing activity. The company is poised for growth with more than 5,000 global customers and growing. Its tenant roster includes names like IBM, Oracle, LinkedIn, Meta Platforms, Comcast and other additions.This is anticipated to have aided stable revenue generation for DLR during the to-be-reported quarter, driving its top line.For the third quarter, the Zacks Consensus Estimate for rental revenues is pegged at $1.03 billion, up 7.7% from $956.4 million reported in the year-ago quarter. The Zacks Consensus Estimate for interconnection & other revenues currently stands at $122.2 million, indicating a projected increase of 8.4% from the year-ago quarter.The consensus estimate for quarterly total revenues is pegged at $1.52 billion, suggesting a year-over-year increase of 6.4%.Digital Realty’s activities in the to-be-reported quarter were inadequate to garner analysts’ confidence. The Zacks Consensus Estimate for the company’s quarterly FFO per share has remained unchanged at $1.78 over the past three months. However, the figure indicates year-over-year growth of 6.6%.What Our Quantitative Model Predicts for DLROur proven model does not conclusively predict a surprise in terms of FFO per share for Digital Realty this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.Digital Realty currently has an Earnings ESP of -1.05% and carries a Zacks Rank of 2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.Stocks That Warrant a LookHere are two stocks from the broader REIT sector — Ventas VTR and Extra Space Storage EXR — you may want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter.Ventas, scheduled to report quarterly numbers on Oct. 29, has an Earnings ESP of +0.84% and carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.Extra Space Storage, slated to release quarterly numbers on Oct. 29, has an Earnings ESP of +0.23% and carries a Zacks Rank of 3 at present.Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They includeStock #1: A Disruptive Force with Notable Growth and ResilienceStock #2: Bullish Signs Signaling to Buy the DipStock #3: One of the Most Compelling Investments in the MarketStock #4: Leader In a Red-Hot Industry Poised for GrowthStock #5: Modern Omni-Channel Platform Coiled to SpringMost of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%.Download Atomic Opportunity: Nuclear Energy's Comeback free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Ventas, Inc. (VTR): Free Stock Analysis Report Digital Realty Trust, Inc. (DLR): Free Stock Analysis Report Extra Space Storage Inc (EXR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks