Is AvalonBay Communities, Inc. overvalued or undervalued?

As of 2 September 2025, AvalonBay Communities, Inc. has moved from an attractive to a fair valuation grade. The company appears to be fairly valued based on its current metrics. Key ratios include a P/E ratio of 25, an EV to EBITDA of 16.09, and a PEG ratio of 1.40. In comparison to its peers, AvalonBay's P/E ratio is lower than Crown Castle, Inc. at 263.90, but higher than VICI Properties, Inc. at 12.89, indicating a mixed competitive positioning.
Recent performance shows that AvalonBay has underperformed relative to the S&P 500, with a year-to-date return of -11.97% compared to the S&P 500's 12.22%. This trend continues over one year, where AvalonBay's return of -15.96% is significantly lower than the S&P 500's 17.14%, reinforcing the notion that the stock may be fairly valued in light of its recent performance.