A Short Intro for Equity Residential Investors

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
The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.