Sunstone Hotel Investors (SHO)
NYSE:SHO
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Sunstone Hotel
(NYSE:SHO)
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Rating:64Neutral
Price Target:
$10.00
â–²(7.99% Upside)
Action:ReiteratedDate:03/02/26
The score is driven primarily by improved financial resilience from the much stronger balance sheet and a positive forward outlook from the latest earnings call (RevPAR/FFO growth and active capital returns). These positives are tempered by weak/volatile profitability and free-cash-flow consistency, and a very high P/E that creates valuation risk; technicals add only modest support.
Positive Factors
Balance sheet strength
Sunstone's 2025 balance-sheet repair — very low debt-to-equity, sizeable equity (~$1.94B) versus ~$3.03B assets — materially improves resilience in the cyclical lodging sector. Lower leverage increases financial flexibility for capital spending, acquisitions or stress periods.
Negative Factors
Free cash flow volatility
A sharp drop to ~$32M FCF in 2025 after stronger prior years signals capital spending or working-capital pressure that reduces the consistency of owner-level cash available for dividends, buybacks, or deleveraging, undermining predictability of shareholder returns.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance sheet strength
Sunstone's 2025 balance-sheet repair — very low debt-to-equity, sizeable equity (~$1.94B) versus ~$3.03B assets — materially improves resilience in the cyclical lodging sector. Lower leverage increases financial flexibility for capital spending, acquisitions or stress periods.
Read all positive factors
Sunstone Hotel (SHO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.75B
Dividend Yield3.98%
Average Volume (3M)1.25M
Price to Earnings (P/E)70.5
Beta (1Y)0.94
Revenue Growth3.04%
EPS Growth-98.77%
CountryUS
Employees36
SectorReal Estate
Sector Strength53
IndustryREIT - Hotel & Motel
Share Statistics
EPS (TTM)0.02
Shares Outstanding189,519,490
10 Day Avg. Volume1,268,210
30 Day Avg. Volume1,253,936
Financial Highlights & Ratios
PEG Ratio-1.01
Price to Book (P/B)0.89
Price to Sales (P/S)1.80
P/FCF Ratio21.99
Enterprise Value/Market Cap1.47
Enterprise Value/Revenue2.68
Enterprise Value/Gross Profit56.37
Enterprise Value/Ebitda12.27
Forecast
1Y Price Target
$10.00Price Target Upside7.99% Upside
Rating ConsensusHold
Number of Analyst Covering6
EPS Forecast (FY)0.11
Revenue Forecast (FY)$986.68M
Sunstone Hotel Business Overview & Revenue Model
Company Description
Sunstone Hotel Investors, Inc. is a lodging real estate investment trust (REIT) that as of the date of this release has interests in 19 hotels comprised of 9,997 rooms. Sunstone's business is to acquire, own, asset manage and renovate or repositio...
How the Company Makes Money
Sunstone Hotel generates revenue primarily through the leasing and management of its hotel properties. The company earns income from room bookings, food and beverage sales, and ancillary services like event hosting and catering. Key revenue stream...
Sunstone Hotel Earnings Call Summary
Earnings Call Date:Feb 27, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call conveyed a predominantly positive operational and financial picture: stronger-than-expected Q4 results, notable RevPAR and margin improvements, accretive capital returns, robust liquidity and constructive guidance for 2026. Management remains appropriately cautious given specific market headwinds (notably D.C., San Diego and renovation-related displacement), one-time items in 2025 that will not repeat, and the possibility that some cost efficiencies may be harder to sustain. Overall, the positives (broad RevPAR gains, margin expansion, balance sheet strength, active capital returns and Andaz momentum) outweigh the localized and manageable challenges.Positive Updates
Quarterly RevPAR Outperformance
Total RevPAR grew 7.4% in Q4 and 12.5% in Q4 including the contribution from Andaz Miami Beach; rooms RevPAR grew 9.6% in the quarter (including a 540 bps benefit from Andaz). Ancillary spend growth outpaced rooms, contributing to the higher total RevPAR.
Negative Updates
Market-Specific Weaknesses (D.C., San Diego, San Antonio)
Washington, D.C. underperformed in 2025 due to government spending cuts, policy changes and a government shutdown; ongoing uncertainty in D.C. is expected to weigh on 2026. San Diego experienced softer transient demand and international travel headwinds, with some displacement from meeting-space renovation causing modest Q1 earnings headwinds. San Antonio was softer in 2025 because of a lighter group calendar and renovation displacement.
Read all updates
Q4-2025 Updates
Positive
Negative
Quarterly RevPAR Outperformance
Total RevPAR grew 7.4% in Q4 and 12.5% in Q4 including the contribution from Andaz Miami Beach; rooms RevPAR grew 9.6% in the quarter (including a 540 bps benefit from Andaz). Ancillary spend growth outpaced rooms, contributing to the higher total RevPAR.
Read all positive updates
Company Guidance
The company’s 2026 guidance calls for rooms RevPAR growth of 4%–7% to $234–$241 (with Andaz Miami Beach expected to contribute ~400 bps at the midpoint) and total RevPAR growth of 3.5%–6.5% to $385–$396 (also ~400 bps Andaz benefit); management expects adjusted EBITDAre of $225M–$250M (midpoint ≈ 5% growth ex ~ $10M of one‑time items) and FFO per diluted share of $0.81–$0.94 (midpoint ≈ 8% growth adjusting for the same one‑timers). First quarter is forecast to represent ~25% of full‑year results at the midpoint (Q2 ~30%, with the remainder split roughly evenly), capex is guided to $95M–$115M (front‑loaded with ~1/3 in Q1 and San Diego ~ $25M), comparable portfolio expense growth is roughly 3% (about 5% including the full‑year impact of Andaz), and the plan assumes defended margins versus 2025 (which delivered 40 bps of comparable margin expansion on 3.5% RevPAR growth). Recent operating and balance‑sheet metrics cited in support of the outlook include Q4 adjusted EBITDAre of $57M and adjusted FFO of $0.20, Q4 rooms RevPAR +9.6% (540 bps Andaz benefit) and total RevPAR +12.5% (510 bps Andaz benefit), Andaz YTD RevPAR near $475 with occupancy >80% at a mid‑$500 rate and ~8,000 group room nights (>50% of budgeted group nights), net leverage ~3.5x (4.7x incl. preferred), >$200M cash pro forma and >$700M total liquidity, ~$108M of common buybacks year‑to‑date at $8.83 avg (preferred purchases $3.1M at $20.46 avg), a board reauthorization to repurchase up to $500M, and a $0.09 per share Q1 common dividend.Sunstone Hotel Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
78
Positive
Cash Flow
55
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 960.13M | 905.81M | 986.48M | 912.05M | 509.15M |
| Gross Profit | 45.58M | 421.74M | 476.96M | 447.66M | 206.83M |
| EBITDA | 212.26M | 214.29M | 387.31M | 249.23M | 193.51M |
| Net Income | 24.57M | 43.26M | 206.71M | 87.29M | 34.30M |
Balance Sheet | |||||
| Total Assets | 3.03B | 3.11B | 3.15B | 3.08B | 3.04B |
| Cash, Cash Equivalents and Short-Term Investments | 109.19M | 107.20M | 426.40M | 101.22M | 120.48M |
| Total Debt | 925.43M | 853.07M | 831.29M | 831.69M | 634.55M |
| Total Liabilities | 1.08B | 1.00B | 982.68M | 997.86M | 801.27M |
| Stockholders Equity | 1.94B | 2.10B | 2.17B | 2.08B | 2.20B |
Cash Flow | |||||
| Free Cash Flow | 78.71M | 170.38M | 198.13M | 80.81M | -35.29M |
| Operating Cash Flow | 181.76M | 170.38M | 198.13M | 209.38M | 28.37M |
| Investing Cash Flow | -48.80M | -386.28M | 258.08M | -165.72M | -239.69M |
| Financing Cash Flow | -127.52M | -97.52M | -119.72M | -49.17M | -42.10M |
Sunstone Hotel Technical Analysis
Positive
9.26
Price Trends
9.18
Positive
9.18
Positive
9.12
Positive
Market Momentum
-0.05
Positive
52.09
Neutral
63.08
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SHO, the sentiment is Positive. The current price of 9.26 is below the 20-day moving average (MA) of 9.26, above the 50-day MA of 9.18, and above the 200-day MA of 9.12, indicating a neutral trend. The MACD of -0.05 indicates Positive momentum. The RSI at 52.09 is Neutral, neither overbought nor oversold. The STOCH value of 63.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SHO.
Sunstone Hotel Risk Analysis
Sunstone Hotel disclosed 63 risk factors in its most recent earnings report. Sunstone Hotel reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Sunstone Hotel Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $1.96B | 18.22 | 6.59% | 5.13% | 0.95% | -8.40% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
64 Neutral | $1.75B | 70.45 | 0.88% | 3.98% | 3.04% | -98.77% | |
63 Neutral | $2.16B | -2.54 | -8.42% | 13.10% | -3.57% | -104.55% | |
62 Neutral | $1.44B | -20.13 | -2.57% | 0.34% | 0.99% | -360.58% | |
62 Neutral | $1.18B | 39.11 | 1.29% | 7.76% | -0.58% | -83.32% | |
62 Neutral | $1.39B | 21.68 | 4.58% | 3.71% | 4.29% | 141.01% |
* Real Estate Sector Average
SHO
Sunstone Hotel
9.25
-0.16
-1.71%
DRH
Diamondrock
9.59
2.04
26.94%
PEB
Pebblebrook Hotel
12.70
2.41
23.42%
RLJ
RLJ Lodging
7.73
0.01
0.13%
XHR
Xenia Hotels & Resorts
15.11
3.39
28.95%
PK
Park Hotels & Resorts
10.72
0.32
3.04%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.