Essex Property (ESS) AI Stock Analysis

• Market Cap: $17.36B
• Dividend Yield: 3.96%
• Average Volume (3M): 493.36K
• Price to Earnings (P/E): 19.8
• Beta (1Y): 0.78
• Revenue Growth: 6.92%
• EPS Growth: 53.76%
• Country: US
• Employees: 1,712
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Residential
• EPS (TTM): 2.56
• Shares Outstanding: 64,404,020
• 10 Day Avg. Volume: 619,373
• 30 Day Avg. Volume: 493,364
• PEG Ratio: 0.30
• Price to Book (P/B): 3.31
• Price to Sales (P/S): 10.33
• P/FCF Ratio: 19.67
• Enterprise Value/Market Cap: 1.39
• Enterprise Value/Revenue: 12.93
• Enterprise Value/Gross Profit: 21.54
• Enterprise Value/Ebitda: 15.71
• 1Y Price Target: $289.83
• Price Target Upside: 13.10% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 16
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 72 Outperform
• Price Target: $289.00 ▲(12.78% Upside)

Essex Property's strong financial performance and strategic focus on Northern California drive the score. Neutral technical indicators and valuation suggest a balanced outlook. Earnings call insights highlight regional strengths and challenges, influencing the overall score.

Positive Factors

Revenue Growth

The robust revenue growth indicates strong demand for Essex's properties, enhancing its market position and supporting long-term financial stability.

Cash Flow Performance

Strong cash flow growth ensures Essex can fund operations, invest in new properties, and manage debt effectively, supporting sustainable growth.

Strategic Acquisitions

Strategic acquisitions in high-demand areas like Northern California enhance Essex's portfolio quality and potential for long-term rental income growth.

Negative Factors

High Debt Levels

High leverage, typical for REITs, can increase financial risk, potentially impacting Essex's ability to finance future growth or weather economic downturns.

Challenges in Key Markets

Underperformance in major markets like Southern California could limit Essex's revenue growth and affect overall profitability.

Structured Finance Headwinds

Anticipated reductions in Core FFO growth due to structured finance challenges may constrain Essex's financial flexibility and growth potential.

Essex Property Business Overview & Revenue Model

Company Description

Essex 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 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	1.86B	1.77B	1.67B	1.61B	1.44B	1.50B
Gross Profit	1.12B	1.21B	1.14B	1.11B	1.21B	1.28B
EBITDA	1.53B	1.63B	1.19B	1.20B	1.50B	1.61B
Net Income	846.55M	741.52M	405.82M	408.31M	488.55M	568.87M
Balance Sheet
Total Assets	13.15B	12.93B	12.36B	12.37B	13.00B	12.94B
Cash, Cash Equivalents and Short-Term Investments	159.36M	136.59M	479.54M	146.04M	240.25M	221.40M
Total Debt	6.71B	6.65B	6.27B	6.03B	6.36B	6.33B
Total Liabilities	7.32B	7.18B	6.74B	6.45B	6.79B	6.72B
Stockholders Equity	5.63B	5.54B	5.42B	5.72B	5.99B	6.00B
Cash Flow
Free Cash Flow	1.12B	931.91M	839.69M	812.46M	784.06M	713.02M
Operating Cash Flow	1.15B	1.07B	980.06M	975.65M	905.26M	803.11M
Investing Cash Flow	-604.08M	-973.05M	-145.14M	145.96M	-397.40M	-416.90M
Financing Cash Flow	-555.50M	-419.74M	-477.27M	-1.14B	-533.26M	-383.26M

Essex Property Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 256.26
• 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 256.26 is below the 20-day moving average (MA) of 257.87, below the 50-day MA of 261.28, and below the 200-day MA of 273.76, indicating a bearish trend. The MACD of -1.70 indicates Negative momentum. The RSI at 46.67 is Neutral, neither overbought nor oversold. The STOCH value of 64.51 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
ESS	72 Outperform	$17.36B	19.80	15.30%	3.96%	6.92%	53.76%
EQR	70 Outperform	$22.74B	19.90	10.55%	4.69%	4.78%	24.74%
INVH	67 Neutral	$17.40B	54.59	5.99%	4.17%	6.82%	27.91%
MAA	66 Neutral	$15.44B	27.23	9.41%	4.77%	0.91%	6.55%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
UDR	64 Neutral	$11.36B	78.65	4.41%	5.08%	2.38%	17.42%
CPT	63 Neutral	$14.35B	70.76	3.30%	4.21%	0.76%	-60.70%

Essex Property Corporate Events

Essex Property Trust’s Earnings Call Highlights Mixed Sentiment

The recent earnings call of Essex Property Trust revealed a balanced sentiment among investors and analysts. The company showcased robust performance in Northern California and strategic capital allocation, which were counterbalanced by challenges in Seattle and Southern California, as well as headwinds in structured finance.

Essex Property Trust Reports Strong Q3 2025 Performance

Essex Property Trust, Inc., a real estate investment trust (REIT), specializes in acquiring, developing, and managing multifamily residential properties across the West Coast. In its third quarter of 2025, Essex Property Trust reported a significant increase in net income per diluted share, rising by 39.1% compared to the same period in 2024, primarily due to gains from real estate sales. The company also saw a modest growth in Core Funds from Operations (FFO) per diluted share by 1.5%, surpassing the midpoint of its guidance range. Additionally, Essex achieved a 2.7% growth in same-property revenue and a 2.4% increase in net operating income compared to the previous year. Strategic activities included the acquisition of a new apartment community in San Jose for $100 million and the sale of three communities for a total of $244.7 million. The company also raised its full-year guidance for net income and Core FFO per diluted share, reflecting a positive outlook for the remainder of the year. Looking forward, Essex Property Trust remains optimistic about its growth trajectory, as evidenced by its raised guidance and continued strategic investments in high-yield opportunities.