AvalonBay Communities, Inc. (AVB)
Quantitative Summary
DeterministicAt 22.6x earnings — a 52% discount to the sector average of 47.4x — AVB is in the lower valuation range. Financial health is average: Piotroski 4/9, Altman Z 1.7. Near modeled fair value — DCF estimates $154 (-9%).
Generated deterministically from quant metrics and financial statements. Not a recommendation.
Algorithmic Teardown
AI-GeneratedThe fundamental economics of AvalonBay reveal a capital allocation challenge characterized by a negative ROIC-WACC spread of -3.0%, indicating the firm is currently destroying value relative to its cost of equity despite reporting an 8.9% DuPont ROE driven primarily by high net margins of 34.6%. This leverage-heavy profitability structure, supported by an equity multiplier of 1.88x and low asset turnover of 0.14x, masks underlying fragility evidenced by a distressed Altman Z-Score of 1.7 and a weak Piotroski F-Score of 4/9. While gross margins remain robust at 63.1%, the combination of sub-par revenue growth at 4.4% YoY and deteriorating financial health metrics suggests limited operational resilience compared to peers with stronger balance sheet fundamentals.
Valuation analysis presents a significant divergence between market pricing and intrinsic value models, as the current P/E multiple of 22.4x trades substantially below the sector average of 87.1x yet remains elevated relative to its own growth trajectory given an implied FCF growth rate of only 4.1% over ten years. A DCF model incorporating these constraints assigns a fair value of $156, implying a -4.4% downside from current levels rather than the premium often associated with high-margin REITs. The market appears to be pricing in modest expansion expectations that fail to account for the capital destruction highlighted by the negative spread between returns and the weighted average cost of capital.
Risk-adjusted performance metrics further underscore the equity's underperformance within a multi-factor framework, as evidenced by an annual Fama-French Alpha of -35.94%. Although the stock exhibits a positive value tilt with an HML factor score of 0.381 and neutral profitability exposure via an RMW score of 0.077, these factors do not offset the significant drag on absolute returns. With no discernible insider flow over the last ninety days, there is currently no active signal from management to counterbalance the quantitative indicators suggesting a misalignment between current pricing and risk-adjusted fundamentals.
Generated by LLM from quantitative data inputs. May contain inaccuracies. Not investment advice.
DCF Sandbox
Interactive5-year two-stage DCF. Terminal growth 3%. Default sliders match the pre-computed base case. Drag to explore scenarios. Not investment advice.
The growth rate the market implicitly expects over the next 10 years to justify today's price. Compare with historical growth of 4% YoY revenue.
Sensitivity Matrix
| TG ↓ / WACC → | 6.1% | 8.1% | 10.1% |
|---|---|---|---|
| 2% | $216 | $125 | $79 |
| 3% | $293 | $154 | $93 |
| 4% | $444 | $197 | $113 |
Center = base case. Green = >10% upside, Red = >10% downside vs $183.38.
Pre-computed DCF: WACC=8.1%, terminal growth 3%. Fair value $154 (-9.2%). Not investment advice.
Valuation Context
Currently trading 6% below its 5-year average P/E of 24.3x.
Price Chart with Moving Averages
Technical Setup
AI GeneratedAvalonBay Communities, Inc. is currently trading at $180.84 within the real estate sector, presenting a snapshot of its market positioning without explicit directional guidance. The technical landscape suggests that any observed momentum must be weighed against inherent volatility risks typical for REITs operating in current economic conditions. While the price level indicates recent activity, the absence of broader trend data or volume confirmation makes it difficult to ascertain whether this movement represents a robust structural shift or a fragile consolidation susceptible to reversal. The fundamental backdrop of the real estate sector often introduces specific drawdown potentials that can rapidly alter technical patterns, meaning current levels may serve as temporary inflection points rather than definitive turning signals. Investors must recognize that high volatility in this space frequently leads to wide price oscillations where short-term gains could easily be erased by macroeconomic headwinds or interest rate sensitivity not fully captured by the single data point provided. Consequently, the risk dynamics appear balanced between potential upside from sector recovery and downside pressure from lingering economic uncertainties, requiring careful monitoring of how future volatility impacts this specific valuation anchor.
Quant Health Deep Dive
Profitability & Value Creation
✅ Conservative payout — room for dividend increases.
DuPont Analysis — ROE Decomposition
Breaking down Return on Equity to see how the company generates its ROE — efficiency, margins, or leverage.
Balance Sheet Health
Earnings Surprise History
EPS estimates vs actuals for the most recent reported quarters. Source: yfinance.
Dividend History
| Date | Amount | Change |
|---|---|---|
| 2026-03-31 | $1.7800 | +1.7% |
| 2025-12-31 | $1.7500 | 0.0% |
| 2025-09-30 | $1.7500 | 0.0% |
| 2025-06-30 | $1.7500 | 0.0% |
| 2025-03-31 | $1.7500 | +2.9% |
| 2024-12-31 | $1.7000 | 0.0% |
| 2024-09-30 | $1.7000 | 0.0% |
| 2024-06-28 | $1.7000 | 0.0% |
| 2024-03-27 | $1.7000 | +3.0% |
| 2023-12-28 | $1.6500 | 0.0% |
| 2023-09-28 | $1.6500 | 0.0% |
| 2023-06-29 | $1.6500 | 0.0% |
Dividend and split data from SEC filings and market data. Amounts are per share, not adjusted for splits. Source: yfinance.
Risk Profile
Sharpe = risk-adjusted return (higher is better). Max drawdown = largest peak-to-trough decline. 1,200+ trading days.
Underwater (Drawdown from Peak)
How far below the all-time high the price has been over time. Deeper = more pain for holders.
Rolling 60-Day Beta vs S&P 500 (VOO)
How the stock's sensitivity to market moves changes over time. β > 1 = more volatile than the market.
Fama-French 5-Factor Exposure
Academic factor model decomposition — what's really driving this stock's returns.
Fama-French 5-Factor Model. Data: Kenneth French Data Library. Regression over 3 years of daily returns.
Fundamentals
Passive Flow Attribution
ETF Draft EffectWhen investors buy or sell ETFs like XLRE or IYR, the fund manager is mechanically forced to buy or sell AVB shares regardless of AvalonBay Communities, Inc.'s individual fundamentals. We estimate $4.7B of passive capital is structurally linked to AVB through 8 tracked ETFs. Index rebalances and ETF creation/redemption cycles can create noticeable volume spikes unrelated to company news.
Passive exposure = Σ (ETF AUM × stock weight in ETF) across 8 tracked ETFs. Actual passive ownership is larger (includes mutual funds). Not investment advice.
ETF Contagion Visualizer
Simulate a price drop in AvalonBay Communities, Inc. to visualize passive redemption contagion across ETFs and collateral stocks.
If AvalonBay Communities, Inc. (AVB) experiences a significant drawdown, ETF redemptions can create collateral selling pressure on co-held stocks. Our model identifies Vanguard Real Estate II Index Fund Institutional Plus Shares (VRTPX) as the most exposed collateral stock, sharing 1 ETFs with AVB. This is the "Passive Contagion" effect described in the Inelastic Market Hypothesis.
Contagion model based on shared ETF exposure and constituent weights across 29 tracked ETFs. Estimated selling pressure is a simplified model — actual impact depends on market liquidity, ETF redemption mechanics, and market-maker activity.
AVB Ownership Dynamics
Passive funds hold 1 in every 5 AVB shares, reducing daily market volatility.
AvalonBay Communities, Inc. (AVB) exerts notable gravity on the passive index market, currently representing 2.7% of the State Street Real Estate Select Sector SPDR ETF (XLRE) and 1.8% of the iShares U.S. Real Estate ETF (IYR). Across 29 tracked ETFs, approximately 27M shares (19.2% of float) are held by passive funds and rarely trade on the open market. This level of passive ownership means index rebalances can create outsized volume events.
ETFs with Highest AVB Exposure
Float lock-up computed from 29 ETFs tracked by SecuritiesDB. Actual passive ownership is higher (includes mutual funds, pension funds, etc.).
AVB Institutional Volume Profile
252-day volume distribution by price level. The Point of Control (POC) marks — the price where the most institutional volume transacted — an implicit support/resistance floor.
The highest-volume price zone for AvalonBay Communities, Inc. over the past year sits near $176.70 (13% of 252-day volume). The current price of $183.38 trades 3.8% above this institutional floor — a sign of upside momentum, though a pullback to the POC zone is a common reversion target. The highly concentrated volume profile (13% at POC) indicates strong consensus on fair value — institutional participants have repeatedly transacted near this price.
Volume Profile computed from 252 trading days of OHLCV data. Volume allocated to price bins proportionally based on daily high-low range. Not investment advice.
AVB Capital Efficiency
How efficiently does AvalonBay Communities, Inc. convert operating profits into free cash? The FCF Conversion ratio measures the gap between accounting earnings and real cash generation.
AvalonBay Communities, Inc. converts 63% of its EBITDA into free cash flow, an exceptional conversion rate indicating an asset-light business model with minimal capital reinvestment drag. However, the ROIC-WACC spread is negative (-3.0%), suggesting reinvested capital is destroying shareholder value.
Capital efficiency = Free Cash Flow ÷ EBITDA. Reinvestment = (EBITDA − FCF) ÷ EBITDA. Metrics from latest annual filings. Not investment advice.
Fails-to-Deliver (FTD) History
SEC-reported settlement failures. Elevated FTDs can indicate high short-selling pressure, operational settlement issues, or naked shorting activity.
| Date | Failed Shares | Close Price | Notional Value |
|---|---|---|---|
| 2026-05-08 | 69 | $185.79 | $12,819.51 |
| 2026-05-07 | 430 | $186.44 | $80,169.2 |
| 2026-04-15 | 3 | $171.00 | $513 |
| 2026-03-25 | 14 | $163.56 | $2,289.84 |
| 2026-03-23 | 7 | $161.37 | $1,129.59 |
| 2026-03-19 | 911 | $166.11 | $151,326.21 |
| 2026-03-06 | 822 | $179.29 | $147,376.38 |
| 2026-03-04 | 493 | $177.32 | $87,418.76 |
| 2026-03-02 | 660 | $177.23 | $116,971.8 |
| 2026-02-26 | 318 | $178.27 | $56,689.86 |
| 2026-02-23 | 430 | $177.40 | $76,282 |
| 2026-02-06 | 4,332 | $169.70 | $735,140.4 |
| 2026-02-02 | 3,655 | $177.67 | $649,383.85 |
| 2026-01-30 | 29 | $174.80 | $5,069.2 |
| 2026-01-26 | 9,995 | $178.77 | $1.8M |
| 2026-01-22 | 219 | $178.96 | $39,192.24 |
| 2026-01-15 | 7,912 | $180.16 | $1.4M |
| 2026-01-09 | 215 | $184.08 | $39,577.2 |
| 2026-01-06 | 190 | $180.28 | $34,253.2 |
| 2025-12-26 | 105 | $183.07 | $19,222.35 |
| 2025-12-17 | 232 | $176.94 | $41,050.08 |
| 2025-11-20 | 30 | $176.97 | $5,309.1 |
| 2025-11-18 | 86 | $177.51 | $15,265.86 |
| 2025-11-17 | 317 | $177.70 | $56,330.9 |
| 2025-11-06 | 456 | $177.74 | $81,049.44 |
| 2025-11-05 | 1,525 | $176.06 | $268,491.5 |
| 2025-11-03 | 14,186 | $173.92 | $2.5M |
| 2025-10-16 | 1,207 | $184.00 | $222,088 |
| 2025-10-09 | 1 | $186.42 | $186.42 |
| 2025-10-08 | 3 | $187.52 | $562.56 |
Source: SEC Regulation SHO FTD data. Data is reported with a ~30 day delay. High FTD quantities relative to average daily volume may indicate settlement stress.
Price Correlations
Statistical correlation of daily returns with other stocks. High correlations indicate stocks that move together; negative correlations can offer diversification.
| Peer | 252-Day (1Y) | 126-Day (6M) | Direction |
|---|---|---|---|
| WTGXX | NaN | NaN | |
| EQR | 0.879 | 0.807 | High co-movement |
| ESS | 0.853 | 0.811 | High co-movement |
| MAA | 0.851 | 0.830 | High co-movement |
| CPT | 0.840 | 0.802 | High co-movement |
| UDR | 0.831 | 0.791 | High co-movement |
| VRTPX | 0.765 | 0.635 | High co-movement |
| AMH | 0.684 | 0.660 | Moderate |
| INVH | 0.678 | 0.587 | Moderate |
| PSA | 0.659 | 0.563 | Moderate |
Pearson correlation of daily log returns. 252d ≈ 1 trading year. Computed from price history. Not investment advice.
Compare AVB to Peers
Quant metrics computed deterministically from financial statements and price data. Updated: 2026-06-02.
SecuritiesDB provides programmatic data aggregation for informational purposes only. None of the metrics, summaries, or algorithmic flags constitute a recommendation to buy or sell any security.