Ayala Land: revenue falls by double digits for a third straight quarter, while profit holds on a 22.9% margin

In its third-quarter 2026 report, Ayala Land posted revenue of PHP 34,201.9 mn, down 11.8% year on year, operating profit of PHP 9,515.3 mn and net profit of PHP 7,832.8 mn, which fell 8.7% year on year. The revenue contraction accelerated from 5.1% in the second quarter, but the net margin rose to 22.9% from 22.1% a year earlier, so profit fell more slowly than revenue. On the portal's model, fair value is 24% below the current price, while the trailing P/E is 4.8 and the dividend yield is 4.63%. Our conclusion: rather unattractive – the 24% downside on the portal's model outweighs the low multiple and the dividend. Our view: the share is rather unattractive at the current price; upside on the portal model -24%.

Our view: is there upside

Our view in numbers

Key takeaways

— Revenue has fallen for three quarters in a row, and the decline accelerated from 5.1% to 11.8%

— The net margin rose to 22.9%, so profit fell 8.7% – less than revenue

— A P/E of 4.8 and a 4.63% dividend yield look cheap, but the portal's model implies minus 24%

— Leverage of 2.27x trailing EBITDA is moderate for a developer

— A 7.8% return on equity at 4.8x earnings shows the market expects no growth

Key figures, PHP bn

Revenue has fallen for three quarters in a row, and the decline accelerated from 5.1% to 11.8%

Third-quarter 2026 revenue was PHP 34,201.9 mn, 11.8% below the year-earlier level. The decline was 5.1% in the second quarter and 13.9% in the first, so the current acceleration in contraction follows a relatively mild second quarter.

The sequence of quarterly rates – minus 8.7% in Q2 2025, minus 5.3% in Q3, plus 23.2% in Q4, minus 13.9% in Q1 2026, minus 5.1% in Q2 and minus 11.8% in Q3 – shows that the late-2025 spike did not turn into sustained growth. Three of the last four quarters closed with a double-digit or near-double-digit decline.

For a holder this means the operating base is shrinking, and the next report must show whether the trend is reversing. The facts do not say what caused the decline.

The net margin rose to 22.9%, so profit fell 8.7% – less than revenue

Third-quarter 2026 net profit was PHP 7,832.8 mn, 8.7% below the year-earlier level. With revenue down 11.8%, profit fell more slowly because the net margin rose to 22.9% from 22.1% in Q3 2025.

Operating profit was PHP 9,515.3 mn. The gap between operating and net profit – PHP 1,682.5 mn – covers interest, taxes and other items, and it is smaller than a year earlier, which is what allowed the margin to rise.

Margin resilience on falling revenue is the main positive in the report. But it does not offset the shrinking base: if revenue keeps falling at the same pace, profit will follow.

A P/E of 4.8 and a 4.63% dividend yield look cheap, but the portal's model implies minus 24%

The trailing P/E is 4.8 and EV/EBITDA is 3.82 on a market cap of PHP 218,961.4 mn. The trailing dividend yield is 4.63%. On their own, these levels say the market values the company below what current profit implies.

However, on the portal's model, fair value is 24% below the current price. The model is built on EBITDA growth times a target multiple, and with revenue falling it sees no source of growth.

The two yardsticks disagree: the low P/E says cheap, the model says overvalued. For this share we treat the portal's model as decisive, because it captures the direction of profit, not just its current level. A 4.63% dividend does not offset 24% of downside.

Leverage of 2.27x trailing EBITDA is moderate for a developer

Net debt at the latest annual balance sheet was PHP 320,162.1 mn, or 2.27x trailing twelve-month EBITDA. For a developer this is a moderate level: it does not pressure the dividend and does not require emergency deleveraging.

Trailing twelve-month EBITDA was PHP 141,212.1 mn on revenue of PHP 190,200.0 mn. Profit for the same period was PHP 45,554.1 mn. A debt-to-EBITDA ratio below 3 is a comfortable zone for a company with positive operating profit.

We do not assess the direction of leverage: the facts do not include a prior value for this ratio. The 2.27x level is neither a risk nor an advantage on its own – it is neutral for the verdict.

A 7.8% return on equity at 4.8x earnings shows the market expects no growth

ROE is 7.8%. At a P/E of 4.8, this means the market values the company below the book value of its equity and prices in no profit growth. That combination is typical of companies whose revenue is falling while the margin holds through cost cuts.

A 4.63% dividend yield at a 7.8% ROE means payouts absorb a significant share of profit. If profit keeps falling, the dividend will come under pressure, and the 4.63% yield may not hold.

For a holder this is the key question: will the company hold its margin and profit at the current level, or will the revenue decline reach profit and the dividend? The answer will determine whether a P/E of 4.8 stays cheap or turns out to be a trap.

Valuation on the latest reported figures

Bottom line

The report's strength is the margin: the net margin rose to 22.9%, and profit fell 8.7% – less than the 11.8% drop in revenue. The weakness is revenue itself: the decline accelerated from 5.1% in the second quarter to 11.8% in the third, and three of the last four quarters were weak. A P/E of 4.8 and a 4.63% dividend yield look cheap, but the portal's model implies 24% downside to the current price, and that yardstick is decisive for us. The key question for a holder is whether the margin holds as revenue keeps falling. Our conclusion: rather unattractive – the 24% downside on the portal's model outweighs the low multiple and the dividend. Our view: the share is rather unattractive at the current price; upside on the portal model -24%.