ESSENTIAL PROPERTIES REALTY TRUST, INC. (EPRT) stock intrinsic value fair value estimate & owner earnings analysis

Essential Properties Realty Trust owns about 2,000+ single-tenant properties (restaurants, car washes, early-childhood education, medical/dental, convenience stores, and similar service businesses) leased to middle-market operators under long-term triple-net leases: the tenant pays taxes, insurance and upkeep, and the trust collects rent. At year-end 2025 the leases had a weighted average remaining term of 14.4 years, only 5.2% of rent came from leases ending in the near term, and 97.9% of rent carried contractual escalations. That contractual rent stream is what we value. What we measured. Cash earnings to shareholders (operating cash flow, less working-capital swings, less equity-based pay treated as a real cost) were $1.85 per share in 2025, up from $1.72 in 2024, $1.63 in 2023, $1.48 in 2022 and $1.23 in 2021. Growth of 8% last year came from buying new properties with newly issued shares (share count rose from about 153 million to about 198 million diluted between 2023 and 2025), so per-share growth is far smaller than the growth in dollars. We used the 2023-2025 median, $1.72, as the starting level. We treated property purchases as growth spending rather than upkeep, since tenants bear maintenance under these leases; the reported depreciation charge is a non-cash accounting item and was not deducted. Because buildings do wear out and leases end, we carry that decay in the later years of each case rather than by lowering today's earnings. Growth credited. Last year's actual per-share growth was 8%; we start our base case at 1.5% a year, below that, because only the contractual rent steps in existing leases are secured. New acquisitions were left out: they depend on the trust continuing to raise capital at favorable prices, and were funded by share issuance rather than by its own retained cash, so they are not secured. Base case (about $26 per share): earnings grow 1.5% a year through the 14-year remaining lease term, then leases renew at roughly 80% of the year-14 earnings level for another 20 years (properties remain owned and re-leased, but with downtime, tenant turnover and building upkeep), then nothing further is assumed. Bear case (about $17): heavier leverage (about $2.5 billion of debt, including term loans and unsecured notes) and tenant credit stress cut earnings about 20% (the trust already books tenant-credit adjustments and real estate impairments of roughly $12-15 million a year), rent steps are only 0.5% a year, and at lease expiry only half the earnings level is re-established for 20 years. Bull case (about $31): the trust holds the higher 2025 level of $1.85, escalators average 2% (many leases include CPI-linked increases), and 95% of earnings continue after the initial leases end. No further acquisitions are assumed even here. What would make this wrong: a wave of tenant failures in the restaurant or service categories, difficulty refinancing debt at reasonable rates, or renewals at materially lower rents. Upside not in our numbers: continued accretive acquisitions. The margin-of-safety price is about $17 per share, near the bear case, since the business is a stable but leveraged, interest-rate-sensitive rent collector.