Valuation Overview

Growth Story

Over the next few years, revenue is expected to grow by 3.76%, lower than industry average of 8.57%.

Growth Trajectory

Profitability

In the growth phase company makes 60.67% profit on every dollar of sales, higher than industry average of 31.12%.

Profitability Trajectory

Risk Profile

Investors expect at least 5.44% return to justify the risk of holding stock.

Risk vs Return

Required Return (Cost of Capital) (%)
Return on Invested Capital (%)

Financial Health Overview

Enterprise Value
19.15B USD
Equity Value
10.43B USD
FCF Yield
35.52%
Average ROIC
8.19%
Cost of Capital
6.67%
P/E Ratio
15.07x
Financial MetricMost Recent 12 months (USD)Previous Year (USD)
Revenues2.98B USD2.91B USD
Operating Income or EBIT1.85B USD1.67B USD
Interest Expense239.41M USD226.59M USD
Book Value Of Equity11.95B USD11.94B USD
Book Value Of Debt8.83B USD8.25B USD
Cash and Marketable Securities102.83M USD108.58M USD
Number of Shares Outstanding143.44M--
Minority interests0 USD0 USD
Current Stock Price194.28 USD--
Effective Tax Rate0%--
Marginal Tax Rate25.00%--

Performance vs Industry

Revenue Growth
-6.26%
2.30%Company
vs
8.56%Industry
Below Industry
Operating Margin
+30.90%
62.01%Company
vs
31.11%Industry
Above Industry
AvalonBay Communities, Inc. demonstrates superior operational efficiency with margins above industry average, indicating effective cost management.

Terminal Value Analysis

Growth Rate
4.59%
Cost of Capital
8.83%
Return on Capital
8.83%
Reinvestment Rate
52.09%
Terminal value represents 64% of total enterprise value, based on 4.59% perpetual growth and 8.83% discount rate.

Equity Value Breakdown

ComponentValueType
Present Value (Terminal Value) 12.34B USD Add
Present Value (Cash Flow Over Next 10 Years) 6.81B USD Add
Value of Operating Assets 19.15B USD Sub-total
Debt 8.82B USD Subtract
Minority Interests — Subtract
Cash 102.82M USD Add
Value of Equity 10.43B USD Sub-total
Number of Shares 143.44M shares Divisor
Estimated Value per Share (Fair Value) 72.73 USD Total
Current Market Price 194.28 USD Reference

Financial Projections

Total FCF Present Value
6.81B USD
Avg Revenue Growth
3.58%
Avg Operating Margin
60.36%
Avg ROIC
8.19%
Year 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Terminal Year
REVENUE
Revenue3.04B USD3.15B USD3.27B USD3.39B USD3.52B USD3.66B USD3.81B USD3.97B USD4.15B USD4.34B USD4.54B USD
Growth Rate 2.00% 3.76% 3.76% 3.76% 3.76% 3.93% 4.09% 4.26% 4.43% 4.59% 4.59%
PROFITABILITY
Operating Income1.88B USD1.92B USD1.98B USD2.04B USD2.10B USD2.18B USD2.27B USD2.37B USD2.48B USD2.59B USD2.71B USD
Operating Margin 62.01% 61.11% 60.66% 60.21% 59.76% 59.76% 59.76% 59.76% 59.76% 59.76% 59.76%
EBIT (1-tax)1.88B USD1.92B USD1.98B USD2.04B USD2.10B USD2.08B USD2.05B USD2.01B USD1.98B USD1.94B USD2.03B USD
CASH FLOW
Reinvestment901.04M USD934.95M USD970.13M USD1.00B USD1.09B USD1.05B USD1.14B USD1.24B USD1.34B USD1.40B USD1.06B USD
Free Cash Flow984.58M USD993.28M USD1.01B USD1.03B USD1.01B USD1.02B USD903.89M USD776.67M USD637.98M USD537.53M USD975.58M USD
Terminal Value--------------------23.06B USD
Present Value933.80M USD893.46M USD866.72M USD840.60M USD779.43M USD738.37M USD612.06M USD489.35M USD371.66M USD287.74M USD—
EFFICIENCY
ROIC 9.12% 8.93% 8.82% 8.71% 8.60% 8.13% 7.70% 7.27% 6.83% 6.40% 8.83%
Cost of Capital 5.43% 5.43% 5.43% 5.43% 5.43% 6.11% 6.79% 7.47% 8.15% 8.83% 8.83%
Sales/Capital 0.12x 0.12x 0.12x 0.12x 0.12x 0.14x 0.14x 0.14x 0.14x 0.14x —

Profitability & Efficiency

Operating Margin (%)
ROIC (%)

Value Creation Analysis

ROIC (%)
Cost of Capital (%)

Operational Cash Flow Analysis

Free Cash Flow ($B)
Reinvestment ($B)