Essex Property Trust, Inc. (ESS) Stock Valuation — PE Analysis
REIT - Residential · NYSE
Current Price
$267.30
PE Ratio (TTM)
41.7x
Intrinsic Value
$225.46
-18.6% margin of safety
COMPETITIVE MOAT
↑Prime West Coast Locations
ESS owns a portfolio of apartment properties concentrated in supply-constrained, high-demand coastal markets. This geographic advantage limits new competition and supports rental growth.
↑Scale and Operational Efficiency
The company's substantial size allows for economies of scale in property management, leasing, and maintenance. This operational efficiency can lead to cost advantages over smaller operators.
↑Established Brand and Tenant Loyalty
ESS has built a recognized brand in its markets, fostering tenant loyalty and reducing turnover. This can translate into higher occupancy rates and more predictable revenue streams.
INVESTMENT RISKS
↓Economic Downturn Impact
A significant economic slowdown could lead to job losses and reduced demand for rental housing, negatively impacting occupancy and rental rates. This is particularly relevant in its concentrated markets.
↓Geographic Concentration Risk
ESS's heavy reliance on California and Washington exposes it to localized economic downturns, natural disasters, or significant regulatory changes. Diversification is limited.
↓Property Value Fluctuations
The value of ESS's real estate assets can be subject to market cycles and economic conditions. Declines in property values could impact its balance sheet and borrowing capacity.
Base case
ESS base case PE valuation
At a current price of $267.3, the base case PE valuation puts ESS fair value near $225.46 per share. That figure assumes 3.6% yearly earnings growth, a target PE multiple of 41.44x, and a 10% discount rate.
Intrinsic Value
$225.46
Margin of safety
-18.6%
Expected annual return
-3.3%
Base case assumptions: 3.6% annual earnings growth, 41.44x target PE, 10% discount rate, 5 year projection. Data as of 2026-10-08.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the ESS PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Essex Property Trust, Inc. respond.
Open PE Calculator for ESSCompany Overview
Essex Property Trust, Inc., a prominent S&P 500 constituent, operates as a vertically integrated real estate investment trust (REIT). The company focuses on the purchase, construction, renovation, and ongoing management of residential apartment complexes across select West Coast regions. Currently, Essex maintains ownership interests in 246 apartment communities, offering a total of roughly 60,000 homes, with an additional six properties actively advancing through various stages of development.
Financial Metrics — ESS PE Stock Valuation Data
PE Ratio (TTM)
41.7x
PEG Ratio
n/m
Earnings Yield
2.41%
ROE (TTM)
7.6%
Revenue/Share (TTM)
$29.89
Dividend Yield
3.86%
Debt/Equity
1.27x
Frequently Asked Questions
What is the PE ratio of ESS?
The trailing twelve-month PE ratio of ESS reflects how much investors pay per dollar of Essex Property Trust, Inc.'s earnings. This metric is most useful when compared to REIT - Residential peers and the company's own historical range.
Is ESS overvalued based on PE ratio?
ESS's PE of 41.7x combined with a PEG ratio of -0.86 provides a growth-adjusted perspective. ESS has negative earnings, so its PE and PEG ratios are not meaningful here and cannot tell you whether the stock is over or undervalued. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical REIT - Residential, a DCF analysis may be more appropriate.
How do I value ESS stock using PE ratio?
To value Essex Property Trust, Inc. using PE: (1) Compare the current PE (41.7x) against the REIT - Residential median to assess relative pricing, (2) check the PEG ratio (-0.86) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of ESS?
ESS's PEG ratio is -0.86, calculated by dividing the PE ratio (41.7x) by the expected earnings growth rate. Because ESS has negative earnings, its PEG ratio is not meaningful and should not be read as a sign of under or overvaluation. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for ESS stock valuation?
PE ratio gives a quick relative read — how ESS is priced versus REIT - Residential peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See ESS DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Real Estate valuationsP/E and DCF value ESS with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-10-08. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.