A strong performer from today's evening trading session is Equity Residential, whose shares rose 1.7% to $65.94 per share. For those of you thinking about investing in the stock, here is a brief value analysis of the stock using the company's basic fundamental ratios.
Equity Residential's Valuation Is in Line With Its Sector Averages:
Equity Residential is committed to creating communities where people thrive. The company belongs to the Real Estate sector, which has an average price to earnings (P/E) ratio of 24.81 and an average price to book (P/B) ratio of 2.24. In contrast, Equity Residential has a trailing 12 month P/E ratio of 27.9 and a P/B ratio of 2.24.
Equity Residential's PEG ratio is 2.49, which shows that the stock is probably overvalued in terms of its estimated growth. For reference, a PEG ratio near or below 1 is a potential signal that a company is undervalued.
The Company May Be Profitable, but Its Balance Sheet Is Highly Leveraged:
| 2020-02-20 | 2021-02-18 | 2022-02-17 | 2023-02-16 | |
|---|---|---|---|---|
| Revenue (MM) | $2,701 | $2,572 | $2,464 | $2,735 |
| Operating Margins | 33.6% | 30.6% | 25.2% | 29.7% |
| Net Margins | 35.93% | 35.53% | 54.09% | 28.4% |
| Net Income (MM) | $970 | $914 | $1,333 | $777 |
| Net Interest Expense (MM) | -$390 | -$365 | -$272 | -$283 |
| Depreciation & Amort. (MM) | -$831 | -$821 | -$838 | -$882 |
| Earnings Per Share | $2.5 | $2.36 | $3.42 | $2.36 |
| EPS Growth | n/a | -5.6% | 44.92% | -30.99% |
| Diluted Shares (MM) | 386 | 386 | 388 | 379 |
| Free Cash Flow (MM) | $1,843 | $1,422 | $1,413 | $1,680 |
| Capital Expenditures (MM) | -$386 | -$156 | -$153 | -$225 |
| Net Current Assets (MM) | -$10,048 | -$9,085 | -$9,359 | -$8,463 |
| Current Ratio | 0.03 | 0.03 | 0.03 | 0.02 |
| Long Term Debt (MM) | $6,078 | $5,336 | $5,835 | $5,342 |
| Net Debt / EBITDA | 4.1 | 3.81 | 3.36 | 3.8 |
