SmartStop Self Storage REIT, Inc. (SMA) stock intrinsic value fair value estimate & owner earnings analysis

SmartStop owns and operates self storage facilities, mostly in the United States and in the Toronto area of Canada, and earns fees for managing storage facilities owned by affiliated non-traded REITs. Roughly 85% of its 2025 revenue of $281 million is self storage rent, about $19 million is fees from that management platform, and the rest is tenant insurance-type protection programs and reimbursements. In 2025 the company listed its shares, did a one-for-four reverse split, raised about $931 million of equity, repaid roughly $875 million of credit facility debt, redeemed its $200 million preferred stock, and bought 17 stores for about $304 million. All per-share figures here are on the post-split share count of about 59 million shares plus operating-partnership units held by others. How we measured earnings. We start with operating cash flow, remove year-to-year working-capital swings, and subtract stock compensation and the capital spending needed to keep the stores in shape (additions to real estate, less a small growth portion). Store acquisitions are treated as growth, not upkeep. On that basis, owner earnings were about $68 million in 2025, versus $50 million in 2024, $64 million in 2023 and $74 million in 2022. Because the share count roughly doubled in 2025 and the preferred stock was retired, the per-share history is not comparable year to year, so we anchored on the 2025 total (about $1.15 per share) rather than a median of older per-share figures. 2025 stock compensation of $16.6 million was unusually high because of one-time grants made at the listing; the store-level grants finished vesting on October 1, 2025 and the first half of 2026 ran at about $6 million. Growth check. Owner earnings grew about 36% in total in 2025 but fell about 12% per share because of the new shares. For 2026 the base case assumes roughly 15% total growth to about $79 million. That is not optimism: it comes from things already done. Debt fell from $1.32 billion to $1.10 billion and its average rate fell from 5.9% to 4.4% by year end, the stock grants have vested, and the 17 acquired stores were owned for only part of 2025. The first half of 2026 supports this: revenue rose about 19% to $158 million and cash from operations was $44 million versus $19 million a year earlier. Base case, about $22 per share. Beyond 2026 we credit only 1.5% a year, matching the 1.6% same-store revenue growth reported for 2025 and the roughly 1.5% self storage revenue growth of 2024, since month-to-month rents can be repriced. We do not credit new acquisitions, lease-up of the acquired stores beyond what has already been earned, development of the Toronto land parcel, or growth in the management platform, because these depend on further capital raising or on events that have not happened. We do charge for refinancing: about $947 million of debt matures between 2026 and 2030 (including $459 million in 2028), and we assume it refinances at about 1.5 points above the current 4.4% average, similar to the 5.9% paid in 2024, which trims owner earnings by roughly $14 million by 2030. After year ten the stores keep producing, so growth fades to 1% a year for ten years and then stops. Bear case, about $15.70 per share. Only half of the 2026 savings materialize (about $72 million), earnings do not grow, and refinancing costs 2 points more than today rather than 1.5. Earnings slide to about $53 million by 2030 and stay flat. This is roughly where 2021 and 2024 came out ($50 million each), when interest costs were heavy. The company is still leveraged, with $1.1 billion of debt, and about 29% of rental income comes from California and Toronto-area concentration risk is real (9% of rental income is in Canadian dollars). Bull case, about $30 per share. The full-year effect of the acquisitions and lower interest lifts 2026 to about $88 million, refinancing costs only about 0.6 points more than today, and earnings grow 2.5% a year as the recently acquired stores mature, then 1.5% for ten years and flat thereafter. What would make this wrong. New supply or a weak housing market could push same-store rents below the roughly 1.6% growth seen in 2025; the 2028 maturities could refinance at higher rates than assumed; and stock compensation could stay above $12 million a year. We could not fully reconcile why cash from operations was much lower in the first half of 2025 ($19 million) than in the second half (about $66 million); we relied on full-year figures, which reconcile to net income plus non-cash charges. Depreciation and intangible amortization ($73 million in 2025) are non-cash and are added back, but the stores' physical upkeep is charged through the capital spending line, so the decay of the buildings is not ignored.