AvalonBay Communities logged a -1.3% change during today's afternoon session, and is now trading at a price of $223.6 per share.
AvalonBay Communities returned gains of 24.5% last year, with its stock price reaching a high of $230.04 and a low of $160.45. Over the same period, the stock outperformed the S&P 500 index by 4.0%. More recently, the company's 50-day average price was $211.22. AvalonBay Communities, Inc., a member of the S&P 500, is an equity REIT in the business of developing, redeveloping, acquiring and managing apartment communities in leading metropolitan areas in New England, the New York/New Jersey Metro area, the Mid-Atlantic, the Pacific Northwest, and Northern and Southern California, as well as in the Company's expansion regions of Raleigh-Durham and Charlotte, North Carolina, Southeast Florida, Dallas and Austin, Texas, and Denver, Colorado. Based in Arlington, VA, the Large-Cap Real Estate company has 2,978 full time employees. AvalonBay Communities has offered a 3.0% dividend yield over the last 12 months.
Growing Revenues but Significant Leverage Levels:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $2,285 | $2,325 | $2,301 | $2,295 | $2,593 | $2,768 |
| Operating Margins | 43% | 34% | 36% | 63% | 67% | 68% |
| Net Margins | 43% | 34% | 36% | 44% | 44% | 34% |
| Net Income (M) | $974 | $786 | $828 | $1,004 | $1,136 | $928 |
| Net Interest Expense (M) | $221 | $204 | $214 | $220 | $230 | $206 |
| Depreciation & Amort. (M) | $631 | $662 | $707 | $759 | $815 | $817 |
| Diluted Shares (M) | 138 | 140 | 140 | 140 | 140 | 142 |
| Earnings Per Share | $7.05 | $5.63 | $5.89 | $7.19 | $8.12 | $6.56 |
| EPS Growth | n/a | -20.14% | 4.62% | 22.07% | 12.93% | -19.21% |
| Avg. Price | $144.9 | $177.71 | $150.62 | $196.14 | $218.25 | $223.6 |
| P/E Ratio | 20.55 | 31.51 | 25.57 | 27.28 | 26.85 | 34.09 |
| Free Cash Flow (M) | $1,218 | $1,186 | $1,111 | $1,060 | $1,262 | $1,382 |
| CAPEX (M) | $84 | $136 | $109 | $143 | $160 | $178 |
| EV / EBITDA | 16.83 | 21.86 | 18.67 | 15.82 | 14.94 | 14.38 |
| Total Debt (M) | $7,102 | $7,355 | $7,630 | $8,104 | $8,316 | $7,982 |
| Net Debt / EBITDA | 4.37 | 5.01 | 4.84 | 3.47 | 3.01 | 2.81 |
AvalonBay Communities has growing revenues and increasing reinvestment in the business, strong operating margins with a positive growth rate, and generally positive cash flows. Furthermore, AvalonBay Communities has flat EPS growth and significant leverage levels.
AvalonBay Communities's Valuation Is in Line With Its Sector Averages:
AvalonBay Communities has a trailing twelve month P/E ratio of 35.8, compared to an average of 30.37 for the Real Estate sector. Based on its EPS guidance of $5.72, the company has a forward P/E ratio of 36.9. The -2.9% compound average growth rate of AvalonBay Communities's historical and projected earnings per share yields a PEG ratio of -12.17. This indicates that its shares are overvalued.Furthermore, AvalonBay Communities is likely overvalued compared to the book value of its equity, since its P/B ratio of 2.7 is higher than the sector average of 2.09. The company's shares are currently trading 101.8% below their Graham number. In conclusion, AvalonBay Communities's impressive cash flow trend, decent P/B ratio, and reasonable use of leverage demonstrate that the company may still be fairly valued — despite its elevated earnings multiple.
There's an Analyst Consensus of Some Upside Potential for AvalonBay Communities:
The 17 analysts following AvalonBay Communities have set target prices ranging from $194.0 to $255.0 per share, for an average of $223.88 with a hold rating. The company is trading -0.1% away from its average target price, indicating that there is an analyst consensus of some upside potential.
AvalonBay Communities has a very low short interest because 1.5% of the company's shares are sold short. Institutions own 93.0% of the company's shares, and the insider ownership rate stands at 0.36%, suggesting a small amount of insider investors. The largest shareholder is Vanguard Group Inc, whose 16% stake in the company is worth $5,045,311,879.
