The estimated intrinsic value of Host Hotels & Resorts, Inc. (HST) using a Price-to-Funds From Operations (P/FFO) model is $36.71 (based on the recommended P/FFO method), compared to the current stock price of $20.91. This suggests the stock may be undervalued by 75.6% 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 6.17% (CAPM-derived from beta of 1.13). For comparison, the standard 20-year DCF model produces: Operating Cash Flow (OCF): $37.13 | Free Cash Flow (FCF): $24.93 | Net Income (NI): $23.17.

• Operating Cash Flow (OCF) exceeds Net Income (NI) significantly. This is common with companies that have large Stock-Based Compensation (SBC) or depreciation charges. Our Discounted Cash Flow (DCF) model may be using a cash flow base that is higher than earnings, but the method choice matters — check the recommended method below.