AvalonBay (AVB)
NYSE:AVB
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AvalonBay
(NYSE:AVB)
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Rating:70Outperform
Price Target:
$195.00
â–²(14.85% Upside)
Action:ReiteratedDate:02/28/26
AVB scores well on financial performance, driven by strong cash flow and solid profitability, which offsets moderate balance-sheet leverage risk. The earnings call supports a favorable longer-term setup via development and capital actions, but near-term growth guidance for 2026 is modest with expense and regional headwinds. Technicals are mixed with a longer-term downtrend, while valuation is supported by the ~3.95% dividend yield but constrained by a ~23.95 P/E.
Positive Factors
Cash Generation
Consistent, strong operating cash flow that comfortably covers interest and produces free cash flow roughly matching net income materially strengthens financial durability. This funds dividends, buybacks, development starts and liquidity needs, reducing reliance on external financing over the next 2–6 months.
Negative Factors
Modest 2026 Growth Outlook
Management's low single-digit same-store revenue guidance indicates limited near-term organic revenue momentum. This constrains FFO growth and delays realization of development returns, meaning portfolio-level cash flow improvement may be muted across the next 2–6 months despite longer-term upside drivers.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash Generation
Consistent, strong operating cash flow that comfortably covers interest and produces free cash flow roughly matching net income materially strengthens financial durability. This funds dividends, buybacks, development starts and liquidity needs, reducing reliance on external financing over the next 2–6 months.
Read all positive factors
AvalonBay (AVB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$23.78B
Dividend Yield3.83%
Average Volume (3M)1.05M
Price to Earnings (P/E)38.5
Beta (1Y)0.65
Revenue Growth7.06%
EPS Growth12.05%
CountryUS
Employees2,928
SectorReal Estate
Sector Strength53
IndustryREIT - Residential
Share Statistics
EPS (TTM)1.17
Shares Outstanding140,083,470
10 Day Avg. Volume990,307
30 Day Avg. Volume1,050,413
Financial Highlights & Ratios
PEG Ratio-8.79
Price to Book (P/B)2.20
Price to Sales (P/S)8.40
P/FCF Ratio18.06
Enterprise Value/Market Cap1.38
Enterprise Value/Revenue10.83
Enterprise Value/Gross Profit16.17
Enterprise Value/Ebitda14.78
Forecast
1Y Price Target
$192.36Price Target Upside13.30% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
EPS Forecast (FY)4.94
Revenue Forecast (FY)$3.11B
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...
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 s...
AvalonBay Earnings Call Summary
Earnings Call Date:Feb 04, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 27, 2026
Earnings Call Sentiment Positive
The call presents a constructive long-term story anchored by a strong balance sheet, accretive development pipeline, meaningful capital raised and executed share repurchases, and high resident retention/engagement metrics. However, 2026 is framed as a transition year with modest same-store revenue guidance (1.4%), regional demand weakness in markets such as Denver and the Mid‑Atlantic, near-term OpEx and legislative pressures, and temporary GAAP-related development earnings dilution. Taken together, management positions the company as well‑capitalized and prepared to benefit from improving fundamentals and development earnings in 2027 and beyond.Positive Updates
Solid 2025 Revenue Growth and Best-in-Class Resident Metrics
Full-year 2025 revenue growth of 2.1%; company turnover of 41% — the lowest in company history — and a near all-time high Mid-Lease Net Promoter Score of 34, supporting high retention and renewal acceptance.
Negative Updates
Modest 2026 Near-Term Growth Outlook
2026 same-store revenue growth guidance is modest at 1.4% and core FFO building blocks include headwinds: $0.07 decrease from refinancing and $0.10 decrease from transaction activity. Management describes 2026 as a transition year with material improvement expected into 2027.
Read all updates
Q4-2025 Updates
Positive
Negative
Solid 2025 Revenue Growth and Best-in-Class Resident Metrics
Full-year 2025 revenue growth of 2.1%; company turnover of 41% — the lowest in company history — and a near all-time high Mid-Lease Net Promoter Score of 34, supporting high retention and renewal acceptance.
Read all positive updates
Company Guidance
AvalonBay guided to a modest 2026 with same‑store revenue growth of 1.4% and a like‑term effective rent change of 2.0% (1H in the low‑1% range, 2H improving into the mid‑2s), while same‑store operating expenses are expected to rise 3.8%; renewals have been offered at 4.0–4.5% (historical settlement ~100–125 bps lower), bad debt ran 1.63% in Q4 and 1.6% for 2025 with a 2026 forecast of ~1.4%, turnover was a company‑low 41% in 2025 and mid‑lease NPS was 34. On the development and capital front, management plans $800M of new starts (7 projects, average development yield 6.5–7%), expects development NOI of $47M in 2026 (plus an incremental $75M in 2027) with occupancies ramping from 1,812 homes in 2025 to ~3,175 in 2026 and >4,100 in 2027; last year they started $1.65B of projects with a projected stabilized yield of 6.2% funded at roughly 5%, raised $2.4B of capital in 2025 at ~5% cost, repurchased ~$490M of stock at an average $182 (implied yield >6%), and increased the quarterly dividend to $1.78/share (up 1.7%). Core FFO building blocks for 2026 include +$0.04 from same‑store NOI, -$0.03 from overhead/fees/JV income, +$0.10 net development earnings, +$0.07 from SIP and 2025 repurchases, offset by -$0.07 refinancing and -$0.10 transaction impacts; operational targets include $80M of annual incremental NOI (60% achieved to date) with a $7M incremental NOI contribution slated for 2026, and the outlook assumes NABE’s ~750,000 net new jobs and about 80 bps of new supply in established regions this year.AvalonBay Financial Statement Overview
Summary
Income Statement
79
Positive
Balance Sheet
72
Positive
Cash Flow
86
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.04B | 2.91B | 2.77B | 2.59B | 2.29B |
| Gross Profit | 2.04B | 1.84B | 1.78B | 1.67B | 1.44B |
| EBITDA | 2.23B | 2.16B | 1.96B | 2.20B | 1.99B |
| Net Income | 1.05B | 1.08B | 928.83M | 1.14B | 1.00B |
Balance Sheet | |||||
| Total Assets | 22.19B | 21.00B | 20.68B | 20.46B | 19.90B |
| Cash, Cash Equivalents and Short-Term Investments | 187.23M | 108.58M | 397.89M | 613.19M | 420.25M |
| Total Debt | 9.33B | 8.25B | 8.14B | 8.48B | 8.27B |
| Total Liabilities | 10.36B | 9.06B | 8.89B | 9.20B | 8.97B |
| Stockholders Equity | 11.61B | 11.94B | 11.78B | 11.25B | 10.93B |
Cash Flow | |||||
| Free Cash Flow | 1.41B | 1.41B | 1.36B | 1.25B | 1.05B |
| Operating Cash Flow | 1.68B | 1.61B | 1.56B | 1.42B | 1.20B |
| Investing Cash Flow | -1.40B | -996.86M | -928.96M | -560.42M | -624.05M |
| Financing Cash Flow | -192.73M | -874.90M | -834.36M | -671.06M | -348.86M |
AvalonBay Technical Analysis
Neutral
169.78
Price Trends
170.48
Negative
173.52
Negative
179.89
Negative
Market Momentum
-0.73
Negative
56.93
Neutral
81.69
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AVB, the sentiment is Neutral. The current price of 169.78 is above the 20-day moving average (MA) of 164.56, below the 50-day MA of 170.48, and below the 200-day MA of 179.89, indicating a neutral trend. The MACD of -0.73 indicates Negative momentum. The RSI at 56.93 is Neutral, neither overbought nor oversold. The STOCH value of 81.69 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for AVB.
AvalonBay Risk Analysis
AvalonBay disclosed 41 risk factors in its most recent earnings report. AvalonBay reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
We may be adversely impacted by climate change. Q4, 2025
AvalonBay Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $23.08B | 21.34 | 10.14% | 4.52% | 4.78% | 24.74% | |
70 Outperform | $23.78B | 38.46 | 8.88% | 3.83% | 7.06% | 12.05% | |
69 Neutral | $16.67B | 25.08 | 12.02% | 3.98% | 6.92% | 53.76% | |
68 Neutral | $15.05B | 36.36 | 7.64% | 4.42% | 0.91% | 6.55% | |
66 Neutral | $14.08B | 19.02 | 8.50% | 3.90% | 1.41% | -21.93% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
64 Neutral | $15.86B | 28.97 | 6.10% | 4.30% | 6.82% | 27.91% |
* Real Estate Sector Average
AVB
AvalonBay
169.78
-15.97
-8.60%
EQR
Equity Residential
61.14
-0.73
-1.18%
MAA
Mid-America Apartment
126.39
-21.51
-14.54%
ESS
Essex Property
250.07
-3.24
-1.28%
CPT
Camden Property
101.95
-1.74
-1.68%
INVH
Invitation Homes
26.02
-4.78
-15.52%
AvalonBay Corporate Events
Business Operations and StrategyStock BuybackPrivate Placements and Financing
AvalonBay Closes $400M Senior Notes Offering
Positive
Dec 1, 2025
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 purpose...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.