Equity LifeStyle Properties (ELS) has wrapped up FY 2025 with fourth quarter revenue of US$373.8 million, basic EPS of US$0.52 and funds from operations of US$156.7 million, giving investors a fresh look at how its cash generating profile is holding up. The company has seen quarterly revenue move from US$371.8 million and basic EPS of US$0.50 in Q4 2024 to US$373.8 million and US$0.52 in Q4 2025, while funds from operations edged from US$153.0 million to US$156.7 million over the same period. This sets up a results season framed by firm margins and income underpinned by its REIT cash flow metrics.

With the latest figures on the table, the next step is to see how these results line up with the prevailing stories around Equity LifeStyle Properties, and where the hard numbers start to challenge those widely held narratives.

FFO and margins point to earnings quality

• On a trailing 12 month basis, funds from operations sit at US$615.7 million with net profit margin at 25.1%, compared with 23.9% a year earlier, which is important for a REIT where cash style earnings matter more than accounting profit alone.
• What stands out for the bullish view is how this margin profile lines up with the long run 10.7% annual earnings growth, yet contrasts with the softer 5.3 to 5.4% year over year earnings growth, which
  • supports the idea that the underlying business has produced solid profit expansion over several years while the most recent 12 months look more moderate, and
  • shows bulls getting support from higher margins and long run EPS growth, but also a reminder that the latest growth pace is lower than that five year average.

DCF fair value gap and a 31.5x P/E

• With the share price at US$62.77, the stock sits about 23.5% below a DCF fair value of roughly US$82.00 and trades on a 31.5x P/E, which is cheaper than peer companies at 45.3x but above the 24.8x average for North American residential REITs.
• Consensus style thinking that ELS offers a mix of support and caution is echoed in these numbers, because
  • the gap to the DCF fair value and a P/E below peers can back the idea that investors are not paying top tier prices for the earnings stream, while
  • the premium to the broader residential REIT industry and slower forecast growth of about 5.4% earnings and 4.2% revenue per year suggest the valuation is not simply a cheap outlier.

Growth forecasts vs five year earnings record

• Five year earnings growth is reported at 10.7% per year while forecasts sit at about 5.4% annual earnings growth and roughly 4.2% revenue growth, so the projected pace is lower than the trailing growth record.
• Bears often focus on this slowdown and on the risk that debt is not well covered by operating cash flow, and the figures here give that concern some weight because
  • the combination of below market forecast growth and richer than industry P/E means investors are paying more than the sector average while not getting higher expected growth, and
  • the flagged issue around debt coverage by operating cash flow adds another layer for cautious investors who want to see that FFO and cash generation comfortably support both borrowing costs and the 3.28% dividend yield.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Equity LifeStyle Properties's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

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Equity LifeStyle Properties pairs a richer than industry P/E with slower earnings and revenue growth forecasts and flagged concerns around debt coverage by operating cash flow.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.