Sunstone Hotel Investors (SHO)
NYSE:SHO
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Sunstone Hotel
(NYSE:SHO)
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Rating:66Neutral
Price Target:
$11.50
â–²(19.17% Upside)
Action:Reiterated
Date:05/09/26
SHO scores above average mainly due to a strong, guidance-raising earnings call and supportive technical trend. Offsetting this are only mid-tier underlying financial quality (compressed/volatile profitability despite solid cash flow) and a valuation that looks somewhat rich versus current earnings strength, with short-term technical indicators appearing overextended.
Positive Factors
Strong cash generation
Sustained operating cash flow and positive free cash flow indicate durable internal funding for dividends, maintenance CapEx and opportunistic buybacks. High cash conversion (~84% of net income) supports capital returns and reinvestment without immediate reliance on external financing.
Negative Factors
Compressed, volatile profitability
Margins and ROE have weakened and been uneven year-to-year, reducing earnings resilience. Persistently low net margins limit retained earnings and the firm's ability to absorb shocks or sustain higher dividends without relying on asset sales or leverage adjustments.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Sustained operating cash flow and positive free cash flow indicate durable internal funding for dividends, maintenance CapEx and opportunistic buybacks. High cash conversion (~84% of net income) supports capital returns and reinvestment without immediate reliance on external financing.
Read all positive factors
Sunstone Hotel (SHO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.03B
Dividend Yield3.98%
Average Volume (3M)1.25M
Price to Earnings (P/E)54.3
Beta (1Y)0.92
Revenue Growth6.83%
EPS Growth23.48%
CountryUS
Employees36
SectorReal Estate
Sector Strength53
IndustryREIT - Hotel & Motel
Share Statistics
EPS (TTM)0.14
Shares Outstanding186,291,280
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 Cap1.43
Enterprise Value/Revenue2.93
Enterprise Value/Gross Profit47.11
Enterprise Value/Ebitda12.84
Forecast
1Y Price Target
$10.33Price Target Upside7.08% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)0.08
Revenue Forecast (FY)$999.17M
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 makes money primarily by owning hotel real estate and earning property-level cash flows generated from hotel operations. Its key revenue driver is hotel operating performance at its owned properties—most directly tied to rooms revenue (so...
Sunstone Hotel Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 30, 2026
Earnings Call Sentiment Positive
The call highlighted multiple strong operational and financial wins: double-digit RevPAR growth driven by resorts and Andaz Miami Beach, healthy adjusted EBITDAre and a nearly 29% increase in adjusted FFO per share, margin expansion, on-budget CapEx execution, a conservative but upgraded full-year guidance, and active, accretive share repurchases alongside a strong balance sheet. Offsetting items include weather-related property damage (notably Wailea), urban portfolio RevPAR softness and some group cancellations, modest cost pressures (utilities, G&A), and continued external demand/cost uncertainty. Overall, the positive operational momentum and capital return actions materially outweigh the headwinds, though management remains appropriately cautious given macro and weather risks.Positive Updates
Strong RevPAR Growth
Total RevPAR increased 13.4% in Q1 (company-wide) and RevPAR grew 14.6% in the quarter; excluding Andaz Miami Beach RevPAR still grew 5.7%—demonstrating broad-based revenue improvement.
Negative Updates
Weather-Related Disruption and Property Damage in Hawaii
Severe March storms impacted Wailea Beach Resort: although revenue grew ~14% in Q1, the resort sustained wind and water damage to rooms, public spaces and some roofs; incremental repair CapEx likely pushes 2026 spend to the upper half of prior guidance and insurance recovery remains uncertain.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong RevPAR Growth
Total RevPAR increased 13.4% in Q1 (company-wide) and RevPAR grew 14.6% in the quarter; excluding Andaz Miami Beach RevPAR still grew 5.7%—demonstrating broad-based revenue improvement.
Read all positive updates
Company Guidance
The company raised its 2026 outlook, now expecting total RevPAR growth of 5.0%–7.5% (implying total RevPAR of ~$390–$400) and rooms RevPAR of about $236–$242, with Andaz Miami Beach contributing roughly 400 basis points at the midpoint (Andaz estimated to add ~500 bps in Q2 and ~150–200 bps in Q3–Q4); full‑year adjusted EBITDAre is guided to $238–$252 million and FFO per diluted share to $0.88–$0.96. For context, Q1 RevPAR rose 14.6% (rooms) and total RevPAR rose 13.4%, Q1 adjusted EBITDAre was $68M (+18% YoY) and adjusted FFO per diluted share was $0.27 (+~29% YoY); Q1 represented ~28% of full‑year earnings (midpoint) with Q2 ~28–29% and the remainder split across Q3–Q4. Balance sheet and capital actions: net leverage ~3.5x (4.6x incl. preferred), and roughly $50M of repurchases year‑to‑date (≈$35M common at $9.11 and ≈$14M preferred at $19.84, ~21% discount); the updated guidance does not assume further buyback benefits.Sunstone Hotel Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
66
Positive
Cash Flow
63
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 985.77M | 960.13M | 905.81M | 986.48M | 912.05M | 509.15M |
| Gross Profit | 61.37M | 45.58M | 421.74M | 476.96M | 447.66M | 206.83M |
| EBITDA | 225.18M | 212.26M | 214.29M | 387.31M | 249.23M | 193.51M |
| Net Income | 37.87M | 24.57M | 43.26M | 206.71M | 87.29M | 34.30M |
Balance Sheet | ||||||
| Total Assets | 3.01B | 3.03B | 3.11B | 3.15B | 3.08B | 3.04B |
| Cash, Cash Equivalents and Short-Term Investments | 91.13M | 109.19M | 107.20M | 426.40M | 101.22M | 120.48M |
| Total Debt | 949.53M | 925.43M | 853.07M | 831.29M | 831.69M | 634.55M |
| Total Liabilities | 1.11B | 1.08B | 1.00B | 982.68M | 997.86M | 801.27M |
| Stockholders Equity | 1.90B | 1.94B | 2.10B | 2.17B | 2.08B | 2.20B |
Cash Flow | ||||||
| Free Cash Flow | 164.16M | 78.71M | 170.38M | 198.13M | 80.81M | -35.29M |
| Operating Cash Flow | 195.17M | 181.76M | 170.38M | 198.13M | 209.38M | 28.37M |
| Investing Cash Flow | -47.58M | -48.80M | -386.28M | 258.08M | -165.72M | -239.69M |
| Financing Cash Flow | -129.70M | -127.52M | -97.52M | -119.72M | -49.17M | -42.10M |
Sunstone Hotel Technical Analysis
Positive
9.65
Price Trends
9.73
Positive
9.42
Positive
9.24
Positive
Market Momentum
0.31
Negative
70.32
Negative
88.08
Negative
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 9.65 is below the 20-day moving average (MA) of 10.35, below the 50-day MA of 9.73, and above the 200-day MA of 9.24, indicating a bullish trend. The MACD of 0.31 indicates Negative momentum. The RSI at 70.32 is Negative, neither overbought nor oversold. The STOCH value of 88.08 is Negative, 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 62 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 |
|---|---|---|---|---|---|---|---|
74 Outperform | $2.29B | 21.95 | 6.89% | 5.13% | -0.40% | 136.86% | |
67 Neutral | $1.52B | 60.22 | 1.14% | 7.76% | -0.83% | -103.51% | |
66 Neutral | $2.03B | 54.27 | 1.94% | 3.98% | 6.83% | 23.48% | |
66 Neutral | $1.61B | 24.05 | 5.76% | 3.71% | 2.31% | 208.08% | |
66 Neutral | $1.76B | -33.80 | -2.07% | 0.34% | 2.84% | -83.41% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
62 Neutral | $2.44B | -11.26 | -6.59% | 13.10% | -2.20% | -280.33% |
* Real Estate Sector Average
SHO
Sunstone Hotel
10.82
2.21
25.64%
DRH
Diamondrock
10.99
3.67
50.18%
PEB
Pebblebrook Hotel
15.25
6.10
66.72%
RLJ
RLJ Lodging
9.73
3.00
44.49%
XHR
Xenia Hotels & Resorts
17.37
5.62
47.87%
PK
Park Hotels & Resorts
12.13
2.69
28.54%
Sunstone Hotel Corporate Events
Business Operations and StrategyStock BuybackFinancial DisclosuresShareholder Meetings
Sunstone Hotel Reports Strong Q1 Results and Governance Actions
Positive
May 5, 2026
Sunstone Hotel Investors reported significantly improved first-quarter 2026 results, with net income attributable to common stockholders rising to $16.0 million, or $0.08 per diluted share, from $1.3 million a year earlier, as RevPAR climbed 14.6%...
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.