Empire State Realty OP LP (ESBA, Financial) has experienced a significant uptick in its stock price, with a notable 6.19% gain over the past week. As of January 16, 2024, the company's shares have soared by an impressive 35.14% over the past three months. Currently, with a market capitalization of $2.73 billion and a stock price of $10.1, ESBA's financial trajectory has caught the attention of investors. According to the GF Value, which stands at $9.89, the stock is considered Fairly Valued. This is a shift from its status three months ago when it was deemed Modestly Undervalued, with a past GF Value of $9.76.
Understanding Empire State Realty OP LP
Empire State Realty OP LP operates within the Real Estate Investment Trusts (REITs) industry, focusing on the management, operation, and repositioning of properties in New York. The company is particularly known for the observatories of the iconic Empire State Building. The majority of its revenue is generated from the Real Estate segment, which includes a portfolio of properties in Manhattan and the greater New York metropolitan area. 
Profitability Analysis
ESBA's Profitability Rank is a robust 7/10, indicating strong profitability within its industry. The company's Operating Margin is an impressive 19.90%, surpassing the industry median. Additionally, ESBA's ROE stands at 5.36%, and its ROA at 2.15%, both of which are higher than the majority of its competitors. The ROIC of 3.73% further reflects the company's effective use of investment capital. With 8 years of profitability over the past decade, ESBA demonstrates consistent performance. 
Growth Prospects
Empire State Realty's Growth Rank is currently at 4/10, suggesting moderate growth potential. The company's 3-Year Revenue Growth Rate per Share is 3.10%, which is solid compared to its peers. However, the 5-Year Revenue Growth Rate per Share slows down to 0.60%, indicating a more sluggish long-term growth. A concerning figure is the 3-Year EPS without NRI Growth Rate, which is at -20.40%. This could be a red flag for future earnings potential, despite the company's better performance than 19.43% of its peers in this metric. 
Competitive Landscape
When comparing ESBA to its competitors, we see that Equity Commonwealth (EQC, Financial) has a market cap of $2.07 billion, SL Green Realty Corp (SLG, Financial) is valued at $2.81 billion, and Highwoods Properties Inc (HIW, Financial) sits at $2.38 billion. These companies, all within the same industry and with similar market capitalizations, provide a context for evaluating ESBA's market position.
Conclusion
In summary, Empire State Realty OP LP presents a compelling case for value investors. The company's current valuation suggests that the stock is fairly priced, while its strong profitability and consistent performance over the years build a solid foundation. However, the mixed growth indicators, particularly the negative 3-Year EPS Growth Rate, may warrant a cautious approach. When juxtaposed with its competitors, ESBA holds its ground in terms of market cap and financial health. For investors looking for stability in the REIT sector, ESBA's recent stock performance and potential for sustained profitability could make it an attractive option to consider.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
