Has Tanger's Big Multi-Year Rally Already Priced in Future Growth?

The recent surge in Tanger Inc. (NYSE: SKT) has drawn significant attention from investors and analysts alike. With a Zacks Rank upgrade to #2 (Buy) and robust Q3 2025 results, the outlet-focused REIT appears to be gaining momentum. However, the question remains: Is Tanger's stock still undervalued, or has much of its future growth already been priced into its current valuation?

Q3 2025 Results and Zacks Upgrade: A Catalyst for Optimism

Tanger's Q3 2025 performance underscored its operational strength. The company reported funds from operations (FFO) of $0.60 per share, exceeding the Zacks Consensus Estimate of $0.58 per share. Revenue, while slightly below expectations at $137.23 million, reflected a resilient business model. Portfolio occupancy reached 97.4% as of September 30, 2025, driven by record leasing volume and strategic acquisitions like Legends Outlets. These results prompted analysts to upgrade Tanger's Zacks Rank to #2 (Buy), citing improved earnings estimates and growing confidence in its ability to outperform peers.

The Zacks upgrade is particularly noteworthy given the broader retail REIT sector's volatility. Tanger's ability to outperform expectations-such as a 12% beat on earnings per share (EPS) and a 4% year-over-year increase in same-center net operating income (NOI)-has reinforced its position as a leader in the outlet mall segment.

Valuation Metrics: Expensive or Fairly Priced?

Despite the positive momentum, Tanger's valuation metrics suggest a mixed picture. As of November 2025, the stock trades at a trailing P/E ratio of 36.46 and a forward P/E of 33.31. These figures significantly exceed its 5-year average P/E of 13.78 and 10-year average of -10.74. While the P/E ratio is higher than peers like Rayonier Inc. (4.45) and Public Storage (24.03), it remains lower than companies such as Phillips Edison & Company (60.53) and Broadstone Net Lease (72.91).

. The P/FFO ratio, a critical metric for REITs, also warrants scrutiny. Tanger's P/FFO stood at 15.30 as of November 2025, a marked improvement from its December 2025 reading of 36.45. However, this ratio still exceeds the estimated fair value of 33.9x. Analysts note that while Tanger's P/FFO is relatively undervalued compared to the retail REIT peer average of 72x, it appears expensive relative to the broader US Retail REITs industry average of 27.4x.

Future Guidance and Analyst Forecasts: Is Growth Already Priced In?

Tanger's full-year 2025 guidance further highlights its growth trajectory. The company raised its core FFO per share forecast to $2.28–$2.32, reflecting 7–9% year-over-year growth. Analysts have aligned with this optimism, with the consensus estimate for full-year 2025 FFO at $2.27 per share. Similarly, revenue projections for the year stand at $543.36 million, indicating confidence in Tanger's ability to sustain its momentum.

However, the question of whether these expectations are already reflected in the stock price remains. Tanger's forward P/E of 33.31 and P/FFO of 15.30 suggest that investors are paying a premium for future growth. While the Zacks upgrade and strong Q3 results justify some optimism, the valuation metrics indicate that the market has already priced in a significant portion of the anticipated upside. For instance, Tanger's P/E ratio is 10% above its fair value estimate of 33.9x, implying limited room for multiple expansion unless earnings growth accelerates further.

Conclusion: A Buy or a Hold?

Tanger's Q3 2025 results and Zacks Rank upgrade signal a compelling story of operational resilience and earnings momentum. The company's 97.4% occupancy rate and strategic acquisitions position it well to capitalize on the outlet mall sector's tailwinds. However, the elevated valuation metrics-particularly the P/E and P/FFO ratios-suggest that much of this growth is already baked into the stock price.

For investors, the decision to buy or hold hinges on their risk tolerance and growth expectations. Tanger's valuation is relatively attractive compared to peers, but its premium to historical averages and fair value estimates means that future outperformance will be critical to justify the current price. If the company continues to exceed guidance and maintain its occupancy and leasing momentum, the stock could still deliver upside. However, if earnings growth moderates or the retail sector faces headwinds, the premium valuation could become a drag.

In the end, Tanger remains a high-conviction play for those who believe in its ability to sustain its recent performance. For others, patience may be warranted until the stock trades closer to its historical valuation norms.