Sunstone Hotel Investors (SHO)
NYSE:SHO
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Sunstone Hotel
(NYSE:SHO)
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Rating:69Neutral
Price Target:
$10.50
â–²(8.81% Upside)
Action:ReiteratedDate:05/05/26
The score is supported primarily by improved business momentum and raised 2026 guidance from the earnings call, alongside a meaningfully strengthened balance sheet. Technicals are moderately bullish with the price above key moving averages. Offsetting factors are thin/volatile profitability and weaker 2025 free cash flow, plus a demanding P/E valuation despite a moderate dividend yield.
Positive Factors
Balance sheet strength
Sunstone's materially de-levered capital structure and large equity base increase financial flexibility across cycles, lowering refinancing and liquidity risk. This durable strength supports capital projects, accretive buybacks and resilience through demand downturns, improving long-term stability.
Negative Factors
Free cash flow volatility
Material FCF deterioration reduces consistent capacity for buybacks, dividends and discretionary CapEx. Even with solid operating cash flow, volatile FCF from higher capex or working-capital swings weakens predictability of shareholder returns and long-term reinvestment planning.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance sheet strength
Sunstone's materially de-levered capital structure and large equity base increase financial flexibility across cycles, lowering refinancing and liquidity risk. This durable strength supports capital projects, accretive buybacks and resilience through demand downturns, improving long-term stability.
Read all positive factors
Sunstone Hotel (SHO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.93B
Dividend Yield3.98%
Average Volume (3M)1.25M
Price to Earnings (P/E)22.9
Beta (1Y)0.89
Revenue Growth6.83%
EPS Growth23.48%
CountryUS
Employees36
SectorReal Estate
Sector Strength53
IndustryREIT - Hotel & Motel
Share Statistics
EPS (TTM)0.06
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 Cap1.46
Enterprise Value/Revenue2.93
Enterprise Value/Gross Profit61.71
Enterprise Value/Ebitda13.43
Forecast
1Y Price Target
$10.33Price Target Upside7.08% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)0.08
Revenue Forecast (FY)$991.66M
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:Aug 12, 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
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
9.65
Price Trends
9.20
Positive
9.09
Positive
9.03
Positive
Market Momentum
0.14
Negative
62.63
Neutral
74.16
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 9.65 is above the 20-day moving average (MA) of 9.21, above the 50-day MA of 9.20, and above the 200-day MA of 9.03, indicating a bullish trend. The MACD of 0.14 indicates Negative momentum. The RSI at 62.63 is Neutral, neither overbought nor oversold. The STOCH value of 74.16 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 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 | $2.19B | 33.11 | 6.89% | 5.13% | -0.40% | 136.86% | |
69 Neutral | $1.93B | 22.86 | 1.81% | 3.98% | 6.83% | 23.48% | |
69 Neutral | $1.55B | 17.29 | 5.33% | 3.71% | 2.31% | 208.08% | |
68 Neutral | $1.35B | -793.68 | 1.14% | 7.76% | -0.83% | -103.51% | |
67 Neutral | $1.65B | -18.57 | -2.07% | 0.34% | 2.84% | -83.41% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
62 Neutral | $2.25B | 47.62 | -8.42% | 13.10% | -2.20% | -280.33% |
* Real Estate Sector Average
SHO
Sunstone Hotel
10.49
2.21
26.61%
DRH
Diamondrock
10.79
3.53
48.62%
PEB
Pebblebrook Hotel
14.72
5.02
51.67%
RLJ
RLJ Lodging
8.95
2.15
31.64%
XHR
Xenia Hotels & Resorts
17.03
5.93
53.38%
PK
Park Hotels & Resorts
11.32
1.87
19.73%
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.