Essex Property Trust, Inc. (ESS) Stock Valuation — PE Analysis
REIT - Residential · NYSE
Current Price
$289.00
PE Ratio (TTM)
44.9x
Intrinsic Value
$240.69
-20.1% margin of safety
COMPETITIVE MOAT
↑Prime West Coast Locations
ESS owns high-quality apartment communities in supply-constrained, desirable coastal markets. This geographic concentration creates barriers to entry for new competitors.
↑Operational Efficiency
The company demonstrates superior operational efficiency, leading to strong performance. This focus on execution allows for better cost management and revenue generation.
↑Disciplined Capital Allocation
ESS exhibits disciplined capital allocation, a key driver of its 'Buy' rating. This strategic approach ensures efficient deployment of resources for growth and shareholder value.
INVESTMENT RISKS
↓Economic Downturn Impact
A significant economic downturn could lead to increased vacancies and reduced rental income. This would directly affect ESS's revenue and profitability.
↓Regulatory Environment
Changes in local or state regulations, such as rent control or zoning laws, could negatively impact ESS's operations and profitability.
↓Competition for Tenants
While locations are prime, increased competition from new developments or existing properties could pressure occupancy rates and rental growth.
Base case
ESS base case PE valuation
At a current price of $289, the base case PE valuation puts ESS fair value near $240.69 per share. That figure assumes 3.5% yearly earnings growth, a target PE multiple of 44.74x, and a 10% discount rate.
Intrinsic Value
$240.69
Margin of safety
-20.1%
Expected annual return
-3.6%
Base case assumptions: 3.5% annual earnings growth, 44.74x target PE, 10% discount rate, 5 year projection. Data as of 2026-08-21.
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)
44.9x
PEG Ratio
n/m
Earnings Yield
2.24%
ROE (TTM)
7.6%
Revenue/Share (TTM)
$29.89
Dividend Yield
3.57%
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 44.9x combined with a PEG ratio of -0.93 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 (44.9x) against the REIT - Residential median to assess relative pricing, (2) check the PEG ratio (-0.93) 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 -0.93, calculated by dividing the PE ratio (44.9x) 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 2026-08-21. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.