...

Essex Property Trust, Inc. (ESS) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

Popular:

Essex Property Trust, Inc. (ESS)

View Full Profile →

Intrinsic Value (DCF)

Current$253.52
→
Intrinsic$499.71
+97%
$307.84$499.71$863.97
Market implies 7% growth for 5 years
DCF analysis suggests ESS could have 97% upside at 20% growth — verify assumptions match your view.
At $254, the market prices in only 7% growth — below historical 20%, suggesting low expectations.
Range: Bear $308 → Bull $864. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →16%18%20%22%
8%$631$693$758$827
10%$413$455$500$547
12%$292$324$357$392
14%$216$241$267$295

Bull Case

  • Bull case ($864) offers 241% upside at 24% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (7%) ≤ historical CAGR (20%)

Bear Case

  • Bear case ($308) with 16% growth, 12% discount rate
Loading charts...

5-Year FFO Projection

Year 1$1.59B
Year 2$1.90B
Year 3$2.28B
Year 4$2.74B
Year 5$3.29B
Terminal$48.39B

📐 Model Inputs

Growth Rate20.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base FFO$1.32BTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. Uses FFO per NAREIT standards. See FAQ below for full methodology.

Related Analysis

Full Stock ProfileCompare ESS vs OStock Screener

Frequently Asked Questions

Is ESS stock undervalued or overvalued?
🟢 UNDERVALUED

ESS trades at $253.52 vs. our DCF-derived intrinsic value of $499.71, implying +95% upside. At a 10.0% WACC and 20.0% projected FCF growth, the market appears to be underpricing the present value of ESS's future cash flows. The bear case ($292.48) still suggests upside, providing margin of safety.

What is ESS's intrinsic value?

Using a 5-year DCF model: Base FCF of $1.32B, projected at 20.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $6.59B net debt and dividing by 0.06B shares: Bear $292.48 | Base $499.71 | Bull $804.87. Current price $253.52 implies +95% to base case.

How is ESS's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 20.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($38.69B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.