Equity Residential
Equity Residential Fundamental Analysis
Equity Residential (EQR) shows moderate financial fundamentals with a PE ratio of 21.23, profit margin of 36.12%, and ROE of 10.14%. The company generates $3.1B in annual revenue with moderate year-over-year growth of 3.69%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 46.2/100 based on profitability, valuation, growth, and balance sheet metrics. The D grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze EQR's fundamental strength across five key dimensions:
Efficiency Score
WeakEQR struggles to generate sufficient returns from assets.
Valuation Score
ExcellentEQR trades at attractive valuation levels.
Growth Score
ModerateEQR shows steady but slowing expansion.
Financial Health Score
ModerateEQR shows balanced financial health with some risks.
Profitability Score
ModerateEQR maintains healthy but balanced margins.
Key Financial Metrics
Is EQR Expensive or Cheap?
P/E Ratio
EQR trades at 21.23 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, EQR's PEG of -7.22 indicates potential undervaluation.
Price to Book
The market values Equity Residential at 2.15 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 6.47 times EBITDA. This is generally considered low.
How Well Does EQR Make Money?
Net Profit Margin
For every $100 in sales, Equity Residential keeps $36.12 as profit after all expenses.
Operating Margin
Core operations generate 36.33 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $10.14 in profit for every $100 of shareholder equity.
ROA
Equity Residential generates $5.40 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Equity Residential generates strong operating cash flow of $1.65B, reflecting robust business health.
Free Cash Flow
Equity Residential generates strong free cash flow of $1.29B, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $3.40 in free cash annually.
FCF Yield
EQR converts 5.40% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
21.23
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-7.22
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.15
vs 25 benchmark
P/S Ratio
Price to sales ratio
7.70
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.80
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.05
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.10
vs 25 benchmark
ROA
Return on assets percentage
0.05
vs 25 benchmark
ROCE
Return on capital employed
0.06
vs 25 benchmark
How EQR Stacks Against Its Sector Peers
| Metric | EQR Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 21.23 | 24.23 | Better (Cheaper) |
| ROE | 10.14% | 659.00% | Weak |
| Net Margin | 36.12% | 4497.00% | Weak |
| Debt/Equity | 0.80 | -22.14 (disorted) | Distorted |
| Current Ratio | 0.05 | 13.87 | Weak Liquidity |
| ROA | 5.40% | -1390.00% (disorted) | Weak |
EQR outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Equity Residential's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
7.92%
Industry Style: Income, Inflation Hedge, REIT
GrowingEPS CAGR
4.40%
Industry Style: Income, Inflation Hedge, REIT
GrowingFCF CAGR
5.63%
Industry Style: Income, Inflation Hedge, REIT
Growing