Essex Property (ESS) AI Stock Analysis

• Market Cap: $18.01B
• Dividend Yield: 3.84%
• Average Volume (3M): 569.12K
• Price to Earnings (P/E): 20.9
• Beta (1Y): 0.82
• Revenue Growth: 7.56%
• EPS Growth: 54.15%
• Country: US
• Employees: 1,712
• Sector: Real Estate
• Sector Strength: 49
• Industry: REIT - Residential
• EPS (TTM): 3.44
• Shares Outstanding: 64,404,020
• 10 Day Avg. Volume: 413,388
• 30 Day Avg. Volume: 569,120
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.40
• Enterprise Value/Revenue: 13.70
• Enterprise Value/Gross Profit: 21.40
• Enterprise Value/Ebitda: 15.31
• 1Y Price Target: $293.68
• Price Target Upside: 12.30% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 15

• Rating: 66 Neutral
• Price Target: $277.00 ▲(5.92% Upside)

Essex Property's overall stock score reflects solid financial performance and strategic investments, particularly in Northern California, which are significant strengths. However, bearish technical indicators and concerns over declining free cash flow growth present risks. The company's valuation is fair, with limited upside potential, but recent corporate events enhance its financial flexibility.

Positive Factors

Acquisitions and Investments

A successful execution of the Norcal external growth strategy with significant acquisitions and investments was achieved.

Financial Performance

The company raised its 2025 Core FFOps guidance, indicating improved financial expectations.

Property Taxes

Property taxes in Washington state were lighter than expected, providing a financial advantage.

Negative Factors

Economic Conditions

The economy in Los Angeles is weakening, which negatively impacts the company's performance.

Guidance and Expectations

The company's 2025 blended rate guidance was reduced due to a weaker economy in Los Angeles.

Market Expectations

ESS's 2025 guidance was maintained below Street expectations and 2Q25 was initiated below expectations.

Essex Property Business Overview & Revenue Model

Company Description

Essex Property (ESS) is a real estate investment trust (REIT) that specializes in the acquisition, development, and management of multifamily residential properties. Operating primarily in the West Coast markets of the United States, Essex focuses on urban and suburban areas with high demand for rental housing. The company offers a range of services, including property leasing, asset management, and community development, catering to a diverse demographic of renters seeking quality living environments.

How the Company Makes Money

Essex Property generates revenue primarily through the rental income derived from its multifamily residential properties. The company leases apartment units to tenants, creating a steady stream of cash flow. Additionally, Essex benefits from other revenue streams such as ancillary income, which includes fees from services like parking, laundry facilities, and rental of retail spaces within its properties. The company may also engage in strategic property sales or refinancing activities to realize gains from its real estate investments. Significant partnerships with local developers and community organizations further enhance its ability to identify profitable investment opportunities and manage properties effectively, contributing to its overall earnings.

Essex Property Financial Statement Overview

Summary

Essex Property demonstrates solid financial health with strong profitability and stable growth. The income statement reflects efficient operations, while the balance sheet shows a balanced capital structure. However, declining free cash flow growth is a potential concern that needs monitoring.

Income Statement

Essex Property shows a strong income statement with a solid gross profit margin of 52.07% and a net profit margin of 43.51% for TTM. The revenue growth rate is modest at 1.52% TTM, indicating stable growth. However, the decline in gross profit margin from previous periods suggests potential cost pressures. The EBIT and EBITDA margins remain robust, reflecting efficient operations.

Balance Sheet

The balance sheet is stable with a debt-to-equity ratio of 1.21, indicating moderate leverage typical for the REIT industry. Return on equity is healthy at 14.44% TTM, showing effective use of equity to generate profits. The equity ratio of 42.76% suggests a balanced capital structure, though slightly high leverage could pose risks if interest rates rise.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth by 124.4% TTM, which is concerning. The operating cash flow to net income ratio of 1.37 indicates good cash generation relative to net income. However, the free cash flow to net income ratio of 0.86 suggests that not all earnings are translating into free cash flow, which could impact future investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.84B	1.77B	1.67B	1.61B	1.44B	1.50B
Gross Profit	1.18B	1.21B	1.14B	1.11B	1.21B	1.28B
EBITDA	1.65B	1.63B	1.19B	1.20B	1.50B	1.61B
Net Income	800.35M	741.52M	405.82M	408.31M	488.55M	568.87M
Balance Sheet
Total Assets	13.18B	12.93B	12.36B	12.37B	13.00B	12.94B
Cash, Cash Equivalents and Short-Term Investments	140.84M	136.59M	479.54M	146.04M	240.25M	221.40M
Total Debt	6.81B	6.65B	6.27B	6.03B	6.36B	6.33B
Total Liabilities	7.34B	7.18B	6.74B	6.45B	6.79B	6.72B
Stockholders Equity	5.64B	5.54B	5.42B	5.72B	5.99B	6.00B
Cash Flow
Free Cash Flow	892.29M	931.91M	839.69M	812.46M	784.06M	713.02M
Operating Cash Flow	1.03B	1.07B	980.06M	975.65M	905.26M	803.11M
Investing Cash Flow	-672.14M	-973.05M	-145.14M	145.96M	-397.40M	-416.90M
Financing Cash Flow	-356.29M	-419.74M	-477.27M	-1.14B	-533.26M	-383.26M

Essex Property Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 261.51
• 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 ESS, the sentiment is Negative. The current price of 261.51 is above the 20-day moving average (MA) of 260.75, below the 50-day MA of 273.00, and below the 200-day MA of 281.49, indicating a neutral trend. The MACD of -1.67 indicates Negative momentum. The RSI at 44.70 is Neutral, neither overbought nor oversold. The STOCH value of 39.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ESS.

Essex Property Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MAA	74 Outperform	$17.08B	29.31	9.58%	4.19%	1.19%	10.52%
UDR	70 Outperform	$12.73B	100.21	3.74%	4.45%	2.29%	-4.89%
INVH	69 Neutral	$19.18B	67.61	5.65%	3.80%	4.41%	-0.16%
EQR	68 Neutral	$24.45B	24.49	9.20%	4.23%	4.49%	5.87%
CPT	68 Neutral	$15.37B	75.77	3.30%	3.80%	0.76%	-60.70%
ESS	66 Neutral	$18.01B	20.95	14.40%	3.84%	7.56%	54.15%
Sector *	65 Neutral	$2.10B	15.81	3.79%	4.98%	4.78%	6.63%

Essex Property Corporate Events

Essex Property Secures New Credit Facilities

On May 20, 2025, Essex Property Trust, Inc., through its Operating Partnership, entered into a Closing Agreement with PNC Bank and other lenders to replace its existing $1.2 billion Revolving Credit Facility with a new facility. The new facility, expected to be effective in July 2025, will have a maximum borrowing capacity of $1.5 billion, with potential to increase to $2.5 billion, and a maturity date in January 2030. Additionally, Essex established a $300 million Unsecured Term Loan Credit Facility with U.S. Bank, maturing in 2028, and initiated a $750 million Commercial Paper Program. These financial maneuvers are aimed at enhancing liquidity and financial flexibility, positioning Essex Property Trust to better manage its operations and growth strategies.