AvalonBay (AVB) AI Stock Analysis

• Market Cap: $25.36B
• Dividend Yield: 3.88%
• Average Volume (3M): 1.03M
• Price to Earnings (P/E): 21.9
• Beta (1Y): 0.60
• Revenue Growth: 7.06%
• EPS Growth: 12.05%
• Country: US
• Employees: 2,928
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Residential
• EPS (TTM): 2.68
• Shares Outstanding: 141,594,940
• 10 Day Avg. Volume: 1,194,437
• 30 Day Avg. Volume: 1,032,632
• PEG Ratio: 1.82
• Price to Book (P/B): 2.62
• Price to Sales (P/S): 10.72
• P/FCF Ratio: 22.16
• Enterprise Value/Market Cap: 1.44
• Enterprise Value/Revenue: 12.13
• Enterprise Value/Gross Profit: 18.53
• Enterprise Value/Ebitda: 15.77
• 1Y Price Target: $202.90
• Price Target Upside: 13.27% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 17
• EPS Forecast (FY): 7.16
• Revenue Forecast (FY): $3.02B

• Rating: 74 Outperform
• Price Target: $199.00 ▲(11.09% Upside)

AvalonBay's strong financial performance and strategic liquidity enhancements are key strengths. However, technical indicators suggest bearish momentum, and reduced earnings guidance poses a risk. The stock's moderate valuation and attractive dividend yield provide some support.

Positive Factors

Strong Portfolio Positioning

Positioning in markets with low supply provides a competitive edge, ensuring stable demand and pricing power over the long term.

Development Projects Ahead of Schedule

Timely project completion enhances future earnings potential, supporting long-term growth and shareholder value.

Robust Balance Sheet

A strong balance sheet with ample liquidity provides financial flexibility for strategic investments and resilience against economic downturns.

Negative Factors

Lowered Earnings Guidance

Reduced earnings guidance reflects challenges in meeting financial targets, potentially impacting investor confidence and future valuations.

Softening Apartment Demand

Weaker demand for apartments could pressure occupancy rates and rental income, affecting revenue stability and growth.

Increased Operating Expenses

Rising operating costs can erode profit margins, limiting the company's ability to invest in growth initiatives and return capital to shareholders.

AvalonBay Business Overview & Revenue Model

Company Description

As of December 31, 2020, the Company owned or held a direct or indirect ownership interest in 291 apartment communities containing 86,025 apartment homes in 11 states and the District of Columbia, of which 18 communities were under development and one community was under redevelopment. The Company is an equity REIT in the business of developing, redeveloping, acquiring and managing apartment communities in leading metropolitan areas in New England, the New York/New Jersey Metro area, the Mid-Atlantic, the Pacific Northwest, and Northern and Southern California, as well as in the Company's expansion markets consisting of Southeast Florida and Denver, Colorado (the Expansion Markets).

How the Company Makes Money

AvalonBay generates revenue primarily through rental income from its apartment communities. The company's revenue model is based on leasing residential units to tenants, with rental agreements typically structured on a monthly basis. Key revenue streams include base rents, which are the primary source of income, as well as ancillary income from services such as parking fees, pet fees, and utility reimbursements. Additionally, AvalonBay engages in property development and redevelopment, which can create value through increased rents and appreciation of property values. The company's strategic partnerships with local governments and community organizations can also enhance its market position and facilitate the development of affordable housing projects, further contributing to its earnings.

AvalonBay Financial Statement Overview

Summary

AvalonBay demonstrates strong financial health with consistent revenue growth and robust profitability margins. The balance sheet is solid, with a good balance of debt and equity. However, the decline in free cash flow growth is a potential area of concern that could impact future financial flexibility.

Income Statement

AvalonBay's income statement shows a strong performance with a consistent increase in revenue, evidenced by a 15.9% growth in the TTM period. The company maintains healthy margins, including a gross profit margin of 63.13% and a net profit margin of 38.86% for the TTM. The EBIT and EBITDA margins are also robust at 46.74% and 75.67%, respectively, indicating efficient operational management. However, the slight decline in gross profit margin over the years suggests potential cost pressures.

Balance Sheet

The balance sheet reflects a stable financial position with a manageable debt-to-equity ratio of 0.74 in the TTM, indicating prudent leverage. The return on equity is solid at 9.60%, showing effective use of equity to generate profits. The equity ratio stands at 54.71%, suggesting a strong equity base relative to total assets. However, the gradual increase in total debt over the years could pose a risk if not managed carefully.

Cash Flow

AvalonBay's cash flow statement reveals a mixed picture. While the operating cash flow to net income ratio is healthy at 1.12, indicating good cash generation relative to net income, the free cash flow growth rate has declined by 114.9% in the TTM. The free cash flow to net income ratio remains strong at 87.09%, but the negative growth in free cash flow is a concern that needs addressing.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.01B	2.91B	2.77B	2.59B	2.29B	2.30B
Gross Profit	1.97B	1.84B	1.78B	1.67B	1.44B	1.48B
EBITDA	2.32B	2.16B	1.96B	2.20B	1.99B	1.75B
Net Income	1.17B	1.08B	928.83M	1.14B	1.00B	827.63M
Balance Sheet
Total Assets	21.95B	21.00B	20.68B	20.46B	19.90B	19.20B
Cash, Cash Equivalents and Short-Term Investments	123.31M	108.58M	397.89M	613.19M	420.25M	216.98M
Total Debt	8.89B	8.25B	8.14B	8.48B	8.27B	7.75B
Total Liabilities	9.79B	9.06B	8.89B	9.20B	8.97B	8.44B
Stockholders Equity	11.94B	11.94B	11.78B	11.25B	10.93B	10.75B
Cash Flow
Free Cash Flow	1.54B	1.41B	1.36B	1.25B	1.05B	1.08B
Operating Cash Flow	1.60B	1.61B	1.56B	1.42B	1.20B	1.22B
Investing Cash Flow	-1.24B	-996.86M	-928.96M	-560.42M	-624.05M	-179.43M
Financing Cash Flow	-830.72M	-874.90M	-834.36M	-671.06M	-348.86M	-854.26M

AvalonBay Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 179.13
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AVB, the sentiment is Negative. The current price of 179.13 is below the 20-day moving average (MA) of 179.25, below the 50-day MA of 180.27, and below the 200-day MA of 193.32, indicating a bearish trend. The MACD of -0.34 indicates Negative momentum. The RSI at 49.81 is Neutral, neither overbought nor oversold. The STOCH value of 72.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AVB.

AvalonBay Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AVB	74 Outperform	$25.36B	21.86	9.79%	3.88%	7.06%	12.05%
CPT	73 Outperform	$15.14B	43.38	5.79%	3.91%	1.41%	-21.93%
MAA	71 Outperform	$16.13B	28.44	9.41%	4.42%	0.91%	6.55%
EQR	70 Outperform	$23.35B	20.44	10.55%	4.52%	4.78%	24.74%
ESS	69 Neutral	$17.16B	19.57	15.30%	3.98%	6.92%	53.76%
INVH	69 Neutral	$16.58B	52.03	5.99%	4.31%	6.82%	27.91%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%

AvalonBay Corporate Events

AvalonBay Closes $400M Senior Notes Offering

On December 1, 2025, AvalonBay Communities, Inc. successfully closed a public offering of $400 million in 4.350% Senior Notes due 2030. The net proceeds of approximately $396.5 million are intended for working capital and general corporate purposes, including stock repurchase, debt repayment, and community development, reflecting a strategic move to enhance liquidity and operational flexibility.

AvalonBay Appoints Conor Flynn to Board of Directors

On November 10, 2025, AvalonBay Communities, Inc. appointed Conor C. Flynn to its Board of Directors. Mr. Flynn, who has been the CEO of Kimco Realty Corporation since 2016, brings extensive experience in real estate investment and management. His appointment as an independent director is expected to enhance AvalonBay’s strategic direction, although he has not been assigned to any board committees yet.