Essex Property (ESS) AI Stock Analysis

Compare

826 Followers

Top Page

Essex Property

(NYSE:ESS)

Select Model

Neutral 69 (OpenAI - 4o)

Rating:69Neutral

Price Target:

$276.00

▲(9.75% Upside)

Essex Property's overall stock score is driven by its strong financial performance and strategic corporate actions, such as the senior notes offering. However, technical indicators suggest bearish momentum, and regional challenges highlighted in the earnings call pose risks. The valuation remains fair, providing a balanced outlook for investors.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong demand for Essex's properties and effective management, supporting long-term financial health.

Strategic Capital Allocation

Strategic acquisitions in high-demand areas like Northern California enhance Essex's portfolio and position it for future growth.

Balance Sheet Strength

Strong balance sheet and liquidity provide Essex with financial flexibility to navigate market challenges and pursue growth opportunities.

Negative Factors

High Debt-to-Equity Ratio

High leverage can increase financial risk, potentially impacting Essex's ability to invest in growth or weather economic downturns.

Challenges in Seattle

Underperformance in Seattle could hinder overall growth, as market saturation and competition limit pricing power.

Structured Finance Headwinds

Structured finance challenges may impact Essex's earnings growth, affecting its ability to maintain or increase distributions.

Essex Property (ESS) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$16.84B

Dividend Yield3.98%

Average Volume (3M)479.77K

Price to Earnings (P/E)24.3

Beta (1Y)0.70

Revenue Growth6.92%

EPS Growth53.76%

CountryUS

Employees1,712

SectorReal Estate

Sector Strength53

IndustryREIT - Residential

Share Statistics

EPS (TTM)1.25

Shares Outstanding64,404,020

10 Day Avg. Volume546,036

30 Day Avg. Volume479,772

Financial Highlights & Ratios

PEG Ratio0.30

Price to Book (P/B)3.31

Price to Sales (P/S)10.33

P/FCF Ratio19.67

Enterprise Value/Market Cap0.96

Enterprise Value/Revenue8.54

Enterprise Value/Gross Profit11.59

Enterprise Value/Ebitda10.69

Forecast

1Y Price Target

$281.85

Price Target Upside12.07% Upside

Rating ConsensusHold

Number of Analyst Covering14

EPS Forecast (FY)N/A

Revenue Forecast (FY)N/A

Essex Property Business Overview & Revenue Model

Company DescriptionEssex Property Trust, Inc., an S&P 500 company, is a fully integrated real estate investment trust (REIT) that acquires, develops, redevelops, and manages multifamily residential properties in selected West Coast markets. Essex currently has ownership interests in 246 apartment communities comprising approximately 60,000 apartment homes with an additional 6 properties in various stages of active development.

How the Company Makes MoneyEssex Property generates revenue primarily through rental income from its multifamily residential properties. The company leases apartments to tenants, which provides a steady income stream. Additionally, Essex benefits from property appreciation, as rising real estate values can enhance the overall value of its asset portfolio. The company may also engage in property development and redevelopment, allowing it to increase its inventory of rental units, further boosting its revenue potential. Significant partnerships with property management firms and other real estate entities help optimize operational efficiencies and tenant satisfaction, contributing to higher occupancy rates and, consequently, increased revenue. Furthermore, Essex might explore additional revenue streams through ancillary services, such as parking fees and amenity rentals.

Essex Property Key Performance Indicators (KPIs)

Any

Net Operating Income

Net Operating Income
Reflects the company's profitability from core operations, excluding non-operating items, providing insight into operational efficiency and financial health.

Chart InsightsEssex Property's Net Operating Income shows a steady recovery in the Same Property segment post-2020, with recent stability. Notably, acquisitions have surged, reflecting strategic reallocation to Northern California, as highlighted in their earnings call. This move aims to optimize returns amid macroeconomic uncertainties. Despite challenges in Southern California, the company maintains a strong balance sheet and liquidity, supporting its investment strategy. The cautious optimism in their earnings call suggests a focus on long-term growth, with modest rent growth expected in supply-constrained markets.

Data provided by:

The Fly

Essex Property Earnings Call Summary

Earnings Call Date:Feb 04, 2026

(Q4-2025)

% Change Since: |

Next Earnings Date:Apr 28, 2026

Earnings Call Sentiment Positive

The call communicated solid operational execution in 2025 with notable outperformance in same-property revenue, high occupancy (96.3%), strong Northern California recovery, robust transaction activity (+43% YoY) and a healthy balance sheet with >$1.7B liquidity. Headwinds include a conservative 2026 FFO outlook (flat) driven by structured finance redemptions (1.8% drag), localized softness (Seattle, some Southern CA submarkets), a negative Q4 new-lease reading (-2.4%), and a pause in development starts due to current land and cost economics. On balance, the positive operating results, favorable supply outlook (supply -20% YoY), NAV appreciation from prior Northern California acquisitions, and strong liquidity and capital allocation discipline materially outweigh the near-term and localized challenges.

Q4-2025 Updates

Positive Updates

Full-Year Same-Property Revenue Outperformance

Same-property revenue growth of 3.3% for full-year 2025 (at the high end of guidance and ~30 basis points above original projections), driven by lower concessions, higher occupancy and other income.

Strong FFO / Earnings Execution in 2025

FFO per share growth for 2025 came in above the midpoint of guidance, reflecting operational execution across property operations and corporate teams.

Healthy Q4 Operating Metrics

Fourth quarter blended lease-rate growth of 1.9%, occupancy up 20 basis points sequentially to 96.3%, and concessions averaging ~one week (typical seasonality). Los Angeles led occupancy improvement with a 70 bps sequential increase.

Delinquency Recovery Near Pre-COVID Levels

Delinquencies improved to ~50 basis points, roughly 10 basis points off historical pre-COVID averages, with further recovery concentrated where eviction processing normalizes (notably L.A.).

Northern California & West Coast Outperformance

Northern California outperformed expectations due to tech expansion, favorable migration, and limited housing supply; Essex markets outperformed the U.S. average on rent growth with regional ranking: Northern CA > Seattle > Southern CA.

Robust Investment Market Activity

West Coast institutional multifamily transaction volume was $12.6 billion in 2025, a 43% increase vs 2024; cap rate compression observed (top submarkets in low-4% range; remaining in mid-4% range). Essex was the largest investor in Northern California over the past two years, with significant NAV appreciation from pre-compression acquisitions.

2026 Supply Outlook Favorable

Company forecasts total new housing supply to decline by approximately 20% year-over-year in 2026, supporting expectation of blended rent growth above the U.S. average and comparable to 2025.

Disciplined Expense and Insurance Outlook

2026 same-property expense growth forecast at 3% (midpoint) — the lowest rate in several years — with controllable expenses ~+2% and insurance expected down ~5% year-over-year, supporting a projected same-property NOI growth of ~2.1% at midpoint.

Strong Liquidity & Funding Position

Free cash flow covers dividend and planned capex/development; proactive maturity management (December bond offering); liquidity of over $1.7 billion and ample capital sources available.

Negative Updates

2026 Core FFO Per Share Guidance Flat

Core FFO per share is expected to be flat year-over-year in 2026, primarily due to a 1.8% headwind from recent and expected redemptions within the structured finance portfolio (company conservatively excluded redemption proceeds from guidance).

Q4 New Lease Weakness in Some Markets

Reported negative new lease rate growth of -2.4% in Q4 driven by weakness in Seattle and San Diego (Seattle most pronounced), indicating pockets of soft leasing demand and the impact of supply in select markets.

Seattle Near-Term Operating Challenges

Seattle underperformed in Q4 versus expectations amid corporate layoff announcements and softer rent/lease performance; although supply is down ~30% and return-to-office trends are constructive, near-term volatility remains.

Los Angeles Delinquency & Stabilization Timing

Economic occupancy in L.A. at 94.7% (just below 95% stabilization) and elevated delinquency timing due to eviction-processing delays; stabilization progress is steady but timing depends on court processing and policy.

Structured Finance Uncertainty & Conservatism

Large redemptions in the structured book (largely tied to two assets) created modeling conservatism: accruals stopped on one asset and guidance excludes potential redemption proceeds, leaving upside uncertain but not included.

No Development Starts in 2026

Company expects no new development starts in 2026; development pipeline economics constrained by high land prices and construction costs — underwriting implies land price declines or ~10%+ rent growth (or ~6% required yield) would be needed for projects to pencil.

Policy & Local Uncertainty Risks

Local political and policy uncertainty (elections, tax changes such as Seattle) is cited as a primary driver of downside to guidance; Seattle tax increases are baked into guidance in the high single-digit range for 2026, and regulatory risks remain a monitoring item.

Other Income and Tech Initiatives Are Lumpy

Other-income and technology-driven revenue initiatives (e.g., EV parking, AI pilots) generate benefits that can be lumpy and typically take 1–2 years to fully monetize; guidance only includes conservative, near-term assumptions.

Company Guidance

Essex’s 2026 guidance assumes steady demand with total new housing supply down ~20% YoY and West Coast blended rent growth above the U.S. average (comparable to 2025); at the midpoint management forecasts full‑year same‑property revenue growth of 2.4% (driven by an 85 bps earn‑in, 2.5% blended lease‑rate growth and ~30 bps from other income), same‑property expense growth of 3% (controllable +~2%, insurance down ~5% offset by higher utilities and property taxes), resulting in same‑property NOI growth of 2.1% at the midpoint, and core FFO/share flat YoY after a 1.8% headwind from structured‑finance redemptions (structured book ~$330M with $175M generating income in the guidance and 3‑year maturities); the company says free cash flow covers the dividend and planned capex/development, liquidity is ~ $1.7B, and downside vs. upside scenarios hinge on local hiring (low end if hiring remains muted; high end if hiring modestly improves), with Northern California expected to lead, then Seattle, then Southern California.

Essex Property Financial Statement Overview

Summary

Essex Property demonstrates strong financial health with robust revenue growth and profitability. The company effectively manages its cash flows, supporting operational and investment activities. However, the high debt-to-equity ratio poses leverage risk typical for the REIT industry.

Income Statement

Positive

Essex Property shows strong revenue growth with a TTM increase of 22.9% compared to the previous year. The company maintains high profitability with a net profit margin of 45.5% and an EBIT margin of 49.9% in the TTM period. However, there is a slight decline in gross profit margin from 68% in 2024 to 60% in the TTM period, indicating increased cost pressures.

Balance Sheet

Positive

The company has a relatively high debt-to-equity ratio of 1.19 in the TTM period, which is consistent with the industry norm for REITs but indicates leverage risk. Return on equity improved to 15.1% in the TTM period, reflecting better profitability. The equity ratio remains stable, suggesting a balanced asset structure.

Cash Flow

Positive

Essex Property demonstrates strong cash flow performance with a significant free cash flow growth of 25% in the TTM period. The operating cash flow to net income ratio is robust at 11.04, indicating efficient cash generation relative to earnings. The free cash flow to net income ratio is high at 96.3%, showing strong cash conversion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.89B	1.77B	1.67B	1.61B	1.44B	1.50B
Gross Profit	1.39B	1.21B	1.14B	1.11B	1.21B	1.28B
EBITDA	1.51B	1.63B	1.19B	1.20B	1.50B	1.61B
Net Income	583.92M	741.52M	405.82M	408.31M	488.55M	568.87M
Balance Sheet
Total Assets	13.16B	12.93B	12.36B	12.37B	13.00B	12.94B
Cash, Cash Equivalents and Short-Term Investments	183.66M	136.59M	479.54M	146.04M	240.25M	221.40M
Total Debt	0.00	6.65B	6.27B	6.03B	6.36B	6.33B
Total Liabilities	7.42B	7.18B	6.74B	6.45B	6.79B	6.72B
Stockholders Equity	5.54B	5.54B	5.42B	5.72B	5.99B	6.00B
Cash Flow
Free Cash Flow	739.41M	931.91M	839.69M	812.46M	784.06M	713.02M
Operating Cash Flow	840.22M	1.07B	980.06M	975.65M	905.26M	803.11M
Investing Cash Flow	-373.79M	-973.05M	-145.14M	145.96M	-397.40M	-416.90M
Financing Cash Flow	-467.04M	-419.74M	-477.27M	-1.14B	-533.26M	-383.26M

Essex Property Technical Analysis

Technical Analysis Sentiment

Negative

Last Price251.49

Price Trends

50DMA

254.82

Negative

100DMA

256.02

Negative

200DMA

263.04

Negative

Market Momentum

MACD

-1.39

Positive

RSI

48.19

Neutral

STOCH

52.28

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 251.49 is below the 20-day moving average (MA) of 252.27, below the 50-day MA of 254.82, and below the 200-day MA of 263.04, indicating a bearish trend. The MACD of -1.39 indicates Positive momentum. The RSI at 48.19 is Neutral, neither overbought nor oversold. The STOCH value of 52.28 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 (65)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CPT	73 Outperform	$15.34B	43.96	5.79%	3.90%	1.41%	-21.93%
EQR	70 Outperform	$24.00B	21.01	10.55%	4.52%	4.78%	24.74%
MAA	70 Neutral	$16.21B	35.73	9.41%	4.42%	0.91%	6.55%
ESS	69 Neutral	$16.84B	24.29	15.30%	3.98%	6.92%	53.76%
UDR	69 Neutral	$19.94B	86.06	4.41%	4.81%	2.38%	17.42%
INVH	69 Neutral	$16.23B	50.91	5.99%	4.30%	6.82%	27.91%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%

* Real Estate Sector Average

Performance Comparison

ESS

Essex Property

251.49

-35.74

-12.44%

EQR

Equity Residential

61.77

-7.41

-10.72%

MAA

Mid-America Apartment

130.72

-21.55

-14.15%

UDR

37.13

-3.97

-9.67%

CPT

Camden Property

106.57

-6.76

-5.97%

INVH

Invitation Homes

26.41

-4.01

-13.18%

Essex Property Corporate Events

Private Placements and Financing

Essex Property Issues $350M Senior Notes

Neutral

Dec 12, 2025

On December 12, 2025, Essex Portfolio, L.P., the operating partnership of Essex Property Trust, Inc., issued $350 million in 4.875% senior notes due in 2036. This issuance is governed by an indenture with various restrictive covenants and is guaranteed by Essex Property Trust, Inc. The notes are unsecured senior obligations and are subject to certain conditions for redemption and default, potentially impacting the company’s financial operations and obligations.

The most recent analyst rating on (ESS) stock is a Hold with a $276.00 price target. To see the full list of analyst forecasts on Essex Property stock, see the ESS Stock Forecast page.

Business Operations and StrategyPrivate Placements and Financing

Essex Property Announces $350 Million Senior Notes Offering

Positive

Dec 4, 2025

On December 3, 2025, Essex Property Trust, Inc. and its operating partnership, Essex Portfolio, L.P., announced the pricing of a $350 million public offering of 4.875% senior notes due in 2036. The proceeds from this offering will be used to repay upcoming debt maturities, including a portion of the $450 million senior notes due in April 2026, and for general corporate purposes, potentially including acquisitions. This strategic financial move is expected to enhance Essex’s operational flexibility and support its growth initiatives in the competitive real estate market.

The most recent analyst rating on (ESS) stock is a Hold with a $290.00 price target. To see the full list of analyst forecasts on Essex Property stock, see the ESS Stock Forecast page.

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.Date of analysis: Dec 09, 2025