Aureus
AExcellent

AvalonBay Communities, Inc.(AVB)

A

Financial data as of Dec 31, 2025Improving · Real Estate

FCF Margin46.2%Free Cash Flow / Revenue
Cash Conversion159.0%Operating CF / Net Income
Free Cash Flow$1.4B
Revenue$3.0B
Net Cash-$9.3BNet debt position
Debt / FCF6.8xElevated debt burden
Current Ratio0.23Tight short-term liquidity
YoY FCF Growth+18.4%5 of 5 quarters positive

How This Grade Was Calculated

Base grade from FCF margin, adjusted by financial health factors

BaseA
→
-0.5Elevated debt-to-FCF ratio (6.8x)
→
+0.5Healthy FCF margin with manageable debt (46.2%, 6.8x)
→
-1Current ratio below 1.0 (0.23)
→
+1Strong YoY FCF growth (18.4% YoY)
→
+0.5Highly consistent quarterly FCF
→
FinalA

Analysis Summary

Strengths

  • Exceptional FCF margin (46.2%)
  • Excellent cash conversion (159%)
  • Highly consistent quarterly FCF
  • FCF trend is improving

Concerns

  • Heavy debt position ($9.3B net debt, 6.8x FCF)
  • High debt-to-FCF ratio (6.8x)
  • Current ratio below 1.0 — tight short-term liquidity

Financial Breakdown

Key financials compared side by side

Margin Composition

FCF Margin46.2%
Net Margin34.6%
Operating CF Margin55.0%
CapEx Ratio8.7%

Balance Sheet Health

Debt, liquidity, and leverage snapshot

Net Cash-$9.3BNet debt position
Debt / FCF6.8xElevated debt burden
Current Ratio0.23Tight liquidity
Debt / Equity0.82Low leverage

Quarterly FCF Trend

+18.4% YoYImproving (+18.4%)

Free cash flow per quarter

Sector Comparison — Real Estate

FCF Margin ranked against sector peers

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Detailed Metrics

Company NameAvalonBay Communities, Inc.
SectorReal Estate
Free Cash Flow$1.4B
Revenue$3.0B
Net Income$1.1B
Operating Cash Flow$1.7B
Capital Expenditure$264.9M
FCF Margin46.2%
Cash Conversion Rate159.0%
Net Margin34.6%
Total Debt$9.5B
Total Cash$187.2M
Net Cash-$9.3B
Current Ratio0.23
Debt / Equity0.82
Debt / FCF6.8x
YoY FCF Growth+18.4%
Positive Quarters5 of 5
Trend DirectionImproving
Report DateDec 31, 2025
GradeA
Data SourceYahoo Finance

Related Research

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Deep Dive4 min read

AVB: 48% FCF Margin With $8B Debt

AvalonBay prints nearly half of revenue as free cash flow. The debt load is real, but the margin tells a different story.

Mar 9, 2026
AVBOVICIPLD+2