The estimated intrinsic value of Curbline Properties Corp. (CURB) using a Price-to-Funds From Operations (P/FFO) model is $12.21 (based on the recommended P/FFO method), compared to the current stock price of $27.31. This suggests the stock may be overvalued by 55.3% relative to its intrinsic value.

For Real Estate Investment Trusts (REITs), standard DCF models can be misleading because depreciation — a large non-cash charge — distorts net income. Instead, SharesGrow uses a Price-to-FFO (Funds From Operations) model: Intrinsic Value = FFO Per Share × 17 (sector-average P/FFO multiple). FFO adds back depreciation to net income, providing a more accurate picture of a REIT's recurring cash-generating ability — the industry-standard metric for REIT valuation.

The valuation uses a CAPM-derived discount rate of 4.09% (CAPM-derived from beta of 0.41). For comparison, the standard 20-year DCF model produces: Operating Cash Flow (OCF): $16.92 | Free Cash Flow (FCF): $16.92 | Net Income (NI): $4.11.

• Stock-Based Compensation (SBC) inflates Operating Cash Flow. This company's OCF is more than double its Net Income, while Free Cash Flow is close to OCF (low CapEx). The large OCF-to-NI gap is primarily from Stock-Based Compensation being added back to OCF. SBC is a real cost — it dilutes shareholders by issuing new shares. Our DCF model uses Net Income as the base instead of OCF, which accounts for the true dilution cost. If you see the OCF method showing a much higher IV, this is why — it overstates value by ignoring SBC dilution.
• Conservative growth rate assumption. Our model uses analyst consensus earnings growth estimates, which may be lower than what the market is pricing in. If the market expects faster growth than the consensus, the analyst price target will be higher than our Discounted Cash Flow (DCF) valuation.