REIT - Residential · NYSE
Current Price
$264.92
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on Essex Property Trust, Inc. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
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.
ROIC (TTM)
377.4%
ROE (TTM)
10.4%
FCF Yield
5.90%
Based on trailing twelve-month data, ESS shows a free cash flow per share of N/A and a ROIC of 377.4%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 5.90% are important context metrics when evaluating ESS's stock valuation relative to peers.
The intrinsic value of ESS depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether ESS is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $264.92. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on Essex Property Trust, Inc.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on REIT - Residential industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting ESS's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Essex Property Trust, Inc., this means projecting how much free cash flow the REIT - Residential will produce over the next 5-10 years, then discounting those amounts to today's dollars. ESS's ROIC of 377.4% indicates strong capital efficiency, which supports higher growth assumptions in the DCF model.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For ESS, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
