Education
About Us
Working with TipRanks
Follow Us
Essex Property (ESS)
NYSE:ESS
Top Page
Essex Property
(NYSE:ESS)
71Outperform
Positive Factors
Acquisitions
ESS plans to be a net acquirer in 2025 with $1 billion in acquisitions, demonstrating growth ambitions.
Demand Increase
The devastating wildfires in Los Angeles are expected to lead to increased multifamily demand, benefiting ESS as displaced residents seek housing.
Earnings Growth
ESS' near-sector-leading same-store revenue growth, with upside from a recovery in Seattle/San Francisco, is meaningful for its story and near-term growth prospects.
Negative Factors
Financial Expectations
The company's initial 2025 Core FFO guidance came in below previous consensus expectations.
Financial Guidance
FY25 Core FFO guidance came in approximately 1% below expectations, implying only 1.3% year-over-year growth.
Revenue Growth Concerns
ESS's Los Angeles market has struggled with lower revenue growth compared to its overall portfolio, impacted by job losses and high bad debt.
Essex Property (ESS) vs. S&P 500 (SPY)
Market Cap
$17.50B
Dividend Yield3.77%
Average Volume (3M)513.00K
Price to Earnings (P/E)22.8
Beta (1Y)0.87
Revenue Growth6.29%
EPS Growth82.88%
CountryUS
Employees1,712
SectorReal Estate
Sector Strength70
IndustryREIT - Residential
Share Statistics
EPS (TTM)11.54
Shares Outstanding64,325,580
10 Day Avg. Volume599,991
30 Day Avg. Volume512,997
Financial Highlights & Ratios
PEG Ratio0.27
Price to Book (P/B)N/A
Price to Sales (P/S)10.88
Price to Cash Flow (P/CF)22.10
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$314.07Price Target Upside19.20% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering17
Essex Property Business Overview & Revenue Model
Company DescriptionEssex Property Trust, Inc. (ESS) is a fully integrated real estate investment trust (REIT) that acquires, develops, and manages multifamily residential properties in selected West Coast markets, primarily in California and Washington. The company's portfolio focuses on high-quality apartment communities situated in supply-constrained coastal markets, benefiting from favorable demographics and economic conditions that support strong rental demand.
How the Company Makes MoneyEssex Property Trust primarily generates revenue through rental income from its multifamily residential properties. The company's revenue model is centered around collecting monthly rent from tenants occupying its apartment units. Additionally, Essex Property may engage in development activities to expand its portfolio, thus increasing rental income potential. The company also occasionally sells properties that have reached optimal value, which can contribute to short-term revenue through capital gains. Furthermore, Essex Property Trust utilizes strategic partnerships and joint ventures to enhance its investment capabilities and maximize returns, benefiting from shared expertise and capital resources.
Essex Property Financial Statement Overview
Summary
Essex Property demonstrates strong revenue growth and operational efficiency, yet faces challenges with recent net income losses and balance sheet restructuring. The robust cash flow provides a buffer against income volatility, but the dramatic change in equity and asset base necessitates careful monitoring. The company should focus on enhancing profitability and stabilizing its balance sheet to ensure long-term financial health.Income Statement
Essex Property's revenue has shown a steady growth trajectory, increasing from $1,460 million in 2019 to $1,774 million in 2024. However, the recent net income loss of $69.78 million in 2024, down from a profit of $405.83 million in 2023, adversely affects profitability metrics. The gross profit margin remains robust, while EBIT and EBITDA margins are strong, indicating operational efficiency. The decline in net income in the latest year impacts the overall financial health of the income statement.60
Neutral
Balance Sheet
The balance sheet shows a complete erosion of reported equity in 2024, raising concerns about financial stability. Previous years exhibited a stable debt-to-equity ratio, but the current lack of stockholders' equity suggests potential restructuring or asset revaluation. Total assets have decreased significantly from $12.36 billion in 2023 to $4.37 billion in 2024, indicating a significant change in asset base. This dramatic balance sheet shift warrants close scrutiny.50
Neutral
Cash Flow
Essex Property's cash flow remains a strong point, with a high operating cash flow of $1,068 million in 2024, up from $980 million in 2023. The free cash flow has also increased to $1,068 million, reflecting effective cash management. The free cash flow to net income ratio is highly favorable due to the net income loss, but this could indicate cash flow resilience in challenging times. Consistent positive cash flow generation supports operational and investment activities.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.77B | 1.67B | 1.61B | 1.44B | 1.50B | Gross Profit |
| 1.21B | 1.14B | 1.10B | 959.11M | 1.02B | EBIT |
| 703.10M | 584.34M | 595.23M | 530.00M | 772.10M | EBITDA |
| 1.63B | 1.49B | 1.13B | 1.05B | 1.02B | Net Income Common Stockholders |
| -69.78M | 405.82M | 408.31M | 488.55M | 568.87M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 136.59M | 479.54M | 155.42M | 250.47M | 231.81M | Total Assets |
| 12.93B | 12.36B | 12.37B | 13.00B | 12.94B | Total Debt |
| 6.65B | 6.27B | 6.03B | 6.36B | 6.33B | Net Debt |
| 6.59B | 5.88B | 5.98B | 6.30B | 6.24B | Total Liabilities |
| 7.18B | 6.74B | 6.45B | 6.79B | 6.72B | Stockholders Equity |
| 5.54B | 5.42B | 5.72B | 5.99B | 6.00B |
| Cash Flow | Free Cash Flow | |||
| 931.91M | 839.69M | 812.46M | 784.06M | 713.02M | Operating Cash Flow |
| 1.07B | 980.06M | 975.65M | 905.26M | 803.11M | Investing Cash Flow |
| -973.05M | -145.14M | 145.96M | -397.40M | -416.90M | Financing Cash Flow |
| -419.74M | -477.27M | -1.14B | -533.26M | -383.26M |
Essex Property Technical Analysis
Negative
263.48
Price Trends
292.26
Negative
289.39
Negative
286.82
Negative
Market Momentum
3.00
Negative
59.94
Neutral
66.03
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESS, the sentiment is Negative. The current price of 263.48 is below the 20-day moving average (MA) of 290.02, below the 50-day MA of 292.26, and below the 200-day MA of 286.82, indicating a bearish trend. The MACD of 3.00 indicates Negative momentum. The RSI at 59.94 is Neutral, neither overbought nor oversold. The STOCH value of 66.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ESS.
Essex Property Risk Analysis
Essex Property disclosed 62 risk factors in its most recent earnings report. Essex Property 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 0 New Risks
Essex Property Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $28.53B | 26.38 | 9.10% | 3.54% | 4.85% | 16.04% | |
72 Outperform | $26.16B | 24.61 | 9.36% | 4.23% | 3.80% | 24.08% | |
72 Outperform | $19.78B | 94.91 | 4.67% | 3.60% | 8.16% | -37.84% | |
71 Outperform | $17.50B | 22.78 | 13.53% | 3.77% | 6.29% | 82.88% | |
71 Outperform | $13.05B | 153.53 | 2.41% | 4.31% | 2.72% | -80.72% | |
61 Neutral | $18.58B | 34.53 | 8.73% | 3.82% | 1.98% | -4.78% | |
61 Neutral | $4.21B | 15.62 | -3.65% | 12.27% | 6.29% | -21.37% |
* Real Estate Sector Average
Performance Comparison
ESS
Essex Property
263.48
35.86
15.75%
AVB
AvalonBay
193.00
17.94
10.25%
EQR
Equity Residential
64.64
6.23
10.67%
MAA
Mid-America Apartment
154.30
31.44
25.59%
UDR
UDR
39.46
5.05
14.68%
INVH
Invitation Homes
32.12
-0.34
-1.05%
Essex Property Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: -7.46% | Next Earnings Date: Apr 29, 2025
Earnings Call Sentiment Neutral
The earnings call presented a generally positive outlook with strong results in 2024 exceeding guidance, strategic acquisitions, and positive occupancy trends. However, the company faces challenges such as regulatory uncertainties in LA and headwinds from interest expenses and structured finance income decline. The favorable economic outlook for 2025 and strong investment market provide additional optimism.Highlights
Exceeded Guidance in 2024
Same-property revenue growth of 3.3% and core FFO growth of 3.8% exceeded the high end of the original guidance.
Successful Property Acquisitions
Acquired and consolidated thirteen properties at above-market yields, shifting the company into growth mode.
Improvement in Delinquency
Made substantial progress on the delinquency front, reducing bad debt by over 50% from one year ago.
Positive Occupancy Trends
Occupancy increased by 40 basis points to 96.3% in January, with concessions improving to less than half a week.
Strong Investment Market
The West Coast experienced a meaningful uptick in volume, with cap rates for high-quality properties remaining consistent.
Favorable Economic Outlook for 2025
Forecasted job growth in technology sector and low supply deliveries lead to an expected 3% market rent growth.
Lowlights
Regulatory Uncertainty in Los Angeles
Potential impact from eviction moratorium and rent freeze proposals in LA, which could affect same-store revenue growth.
Interest Expense Headwinds
Higher interest expense expected due to refinancing $500 million in unsecured bonds at higher rates.
Structured Finance Income Decline
Lower structured finance income due to redemptions in 2024, impacting core FFO growth.
Challenges in Southern California
LA and Alameda counties lagged with only 20 basis points of blended rate growth.
Company Guidance
During Essex Property Trust, Inc.'s Fourth Quarter 2024 earnings call, the company reported exceeding their original guidance with same-property revenue growth of 3.3% and core FFO growth of 3.8%, driven by improving demand and effective delinquency resolution. They highlighted achieving 1.6% blended lease rate growth in the Fourth Quarter, with Orange and Santa Clara Counties leading at 2.7% blended rate growth. The company successfully acquired and consolidated thirteen properties at above-market yields, indicating a strategic shift towards growth. Looking into 2025, Essex forecasts a 3% market rent growth, with Seattle and San Jose expected to lead at approximately 4%. The guidance acknowledges potential policy uncertainties, particularly in Los Angeles. They project same-property NOI growth to be 2.7% at the midpoint and core FFO growth of 1.3%, impacted by higher interest expenses and lower structured finance income. The company plans to acquire $1 billion in new apartment communities in 2025, maintaining a strong balance sheet with over $1 billion in liquidity.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.