Is Essex Property Trust, Inc. overvalued or undervalued?

As of 29 July 2025, the valuation grade for Essex Property Trust, Inc. moved from expensive to fair. The company is currently fairly valued based on its valuation metrics. The P/E ratio stands at 28, the Price to Book Value is 3.34, and the EV to EBITDA ratio is 15.05, which are in line with its peers, such as AvalonBay Communities, Inc. with a P/E of 23.50 and Equity Residential at 25.07.
In comparison to the S&P 500, Essex Property Trust has underperformed over the past year with a return of -13.97% versus the index's 17.14%. However, over a five-year period, the stock has returned 27.05%, which is significantly lower than the S&P 500's 96.61%, indicating a potential for recovery as the valuation appears reasonable relative to its peers.