Computed from published fixed rules, not a model's judgement — though one input, the count of high-severity risks, comes from the AI analysis below.
Not investment advice and not a price target: it scores the quarter's fundamentals, not the stock. Full methodology →
AI Takeaway
ESS posted modest revenue growth of 4.3% to $484.8M in Q1 FY2026, but operating income plunged 39.6% to $155.2M and EPS fell nearly 48% to $1.65, signaling significant cost or non-cash headwinds despite stable gross margins above 70%.
Revenue
$484.76M
+4.34% YoY
EPS (Diluted)
$1.65
-47.78% YoY
Gross Margin
70.4%
+0.8 pts YoY
Operating Income
$155.19M
-39.63% YoY
Source: SEC XBRL
Essex Property Trust (ESS) reported Q1 FY2026 revenue of $484.76M, up 4.3% year over year. Operating margin was 32.0%, down 23.3 points from 55.3% a year earlier. Operating cash flow was $287.17M, up 2.0% year over year. ESS's fiscal Q1 FY2026 corresponds to calendar Q1 2026.
Last 4 quarters: 2 beats
| Quarter | Actual EPS (USD) | Consensus (USD) | Result |
|---|---|---|---|
| Jun 2026 | 0.97 | 1.48 | Miss -34.4% |
| Mar 2026This filing | 1.65 | 1.41 | Beat +17.4% |
| Dec 2025 | 1.25 | 1.49 | Miss -16.4% |
| Sep 2025 | 2.56 | 1.48 | Beat +73.1% |
Reported EPS of $1.65 versus the $1.41 analyst consensus — a +17.4% beat for Mar 2026.
Compiled by AI from this SEC filing
ESS grew total revenue 4.3% year-over-year to $484.8M in Q1 FY2026, up from $464.6M in the prior-year period, suggesting continued demand for its apartment communities despite a challenging macro environment.
Source: 10-Q Income Statement
Gross margin improved modestly to 70.4% from 69.6% in the prior year, reflecting disciplined property-level expense management and slightly faster revenue growth relative to cost of revenue.
Source: 10-Q Income Statement
Operating income fell 39.6% to $155.2M from $257.1M, with operating margin compressing dramatically from 55.3% to 32.0%, likely driven by elevated depreciation, impairment charges, or increased G&A and operating expenses not captured in cost of revenue.
Source: 10-Q Income Statement
Operating cash flow grew 2.0% to $287.2M, outpacing reported net income and suggesting that non-cash charges (such as depreciation and amortization) are a primary driver of the operating income decline rather than cash deterioration.
Source: 10-Q Cash Flow Statement
ESS initiated $50.2M in share buybacks in Q1 FY2026 versus zero in the prior-year period, while financing cash flow swung to -$220.2M from +$17.8M, indicating a meaningful shift toward returning capital to shareholders.
Source: 10-Q Cash Flow Statement
Compiled by AI from this SEC filing · 2 high, 2 medium, 1 low
Operating margin fell sharply from 55.3% to 32.0% year-over-year, a decline of over 23 percentage points. If this compression reflects structural cost increases or impairment charges, it could weigh on future earnings and dividend coverage.
Source: 10-Q Income Statement
Long-term debt stands at $6.84B against stockholders' equity of $5.44B, yielding a debt-to-equity ratio of 1.37. In a rising or sustained high interest rate environment, refinancing risk and interest expense could pressure free cash flow and net income.
Source: 10-Q Balance Sheet
Cash and equivalents dropped 61.5% year-over-year to just $38.0M from $98.7M, reducing the company's liquidity buffer. Combined with $220.2M in financing outflows and $50.2M in buybacks, near-term liquidity management warrants monitoring.
Source: 10-Q Balance Sheet & Cash Flow Statement
Basic and diluted EPS fell 47.8% to $1.65 from $3.16, far exceeding the modest 4.3% revenue growth. This divergence suggests significant below-the-line charges or increased share count impacts that could disappoint income-focused investors.
Source: 10-Q Income Statement
Stockholders' equity declined 2.4% to $5.44B, reflecting a combination of net income generation offset by dividends, buybacks, and potentially other comprehensive loss items. Continued erosion could affect book value metrics important to REIT investors.
Source: 10-Q Balance Sheet
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue $M | 484.76 $M | 464.58 $M | +4.34% |
Gross Profit $M | 341.19 $M | 323.47 $M | +5.48% |
Operating Income $M | 155.19 $M | 257.08 $M | -39.63% |
EPS (Basic) $ | 1.65 $ | 3.16 $ | -47.78% |
EPS (Diluted) $ | 1.65 $ | 3.16 $ | -47.78% |
Answers draw on this SEC filing and the data on this page
For Q2 FY2026, ESS achieved modest revenue growth of 4.1% year-over-year to $489.05M, but operating income fell 60.9% to $109.37M due to a sharp compression in operating margins.
ESS delivered solid FY2025 results with revenue growing 6.4% to $1.89B and operating income surging 27.9% to $899M, though basic EPS declined 10.0% to $10.40, likely reflecting a higher share count or non-operating items.
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