Sunstone Hotel (SHO) AI Stock Analysis

• Market Cap: $1.80B
• Dividend Yield: 3.88%
• Average Volume (3M): 1.25M
• Price to Earnings (P/E): 1890.0
• Beta (1Y): 0.93
• Revenue Growth: 3.04%
• EPS Growth: -98.77%
• Country: US
• Employees: 36
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Hotel & Motel
• EPS (TTM): -0.02
• Shares Outstanding: 189,969,350
• 10 Day Avg. Volume: 1,268,210
• 30 Day Avg. Volume: 1,253,936
• PEG Ratio: -0.65
• Price to Book (P/B): 1.14
• Price to Sales (P/S): 2.64
• P/FCF Ratio: 14.02
• Enterprise Value/Market Cap: 1.55
• Enterprise Value/Revenue: 2.97
• Enterprise Value/Gross Profit: 6.39
• Enterprise Value/Ebitda: 14.02
• 1Y Price Target: $9.83
• Price Target Upside: 8.14% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 61 Neutral
• Price Target: $9.50 ▲(4.51% Upside)

Sunstone Hotel's overall stock score is driven by its stable financial performance and positive earnings call sentiment, despite challenges in valuation and technical indicators. The company's strong balance sheet and optimistic future outlook contribute positively, while high P/E ratio and mixed technical signals weigh on the score.

Positive Factors

Strong Balance Sheet

A strong balance sheet with low leverage and high liquidity enhances financial stability and flexibility, supporting long-term growth initiatives.

Positive Group Booking Trends

Increased group bookings indicate strong demand recovery and potential revenue growth, benefiting from improved market conditions and strategic positioning.

Credit Facility Recast

Recasting credit facilities to extend maturities and reduce costs strengthens financial resilience and supports strategic investments, enhancing long-term competitiveness.

Negative Factors

Challenging Operating Environment

A challenging operating environment with potential government disruptions can hinder demand and revenue stability, affecting long-term operational performance.

Softer Resort Portfolio Performance

Underperformance in key resort markets can limit revenue growth and profitability, challenging the company's ability to capitalize on high-margin segments.

Low Net Profit Margin

A low net profit margin indicates limited profitability, which can constrain reinvestment capabilities and shareholder returns, impacting long-term financial health.

Sunstone Hotel Business Overview & Revenue Model

Company Description

Sunstone Hotel (SHO) is a hospitality investment company that focuses on acquiring and developing premium hotels in key urban and resort markets across the United States. The company operates a diversified portfolio of properties, which includes both luxury and select-service hotels, catering to a variety of travelers. Sunstone Hotel aims to enhance guest experiences through strategic property upgrades and exceptional customer service, positioning itself as a leader in the hospitality sector.

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 streams include direct sales from guest accommodations, which constitute the largest portion of revenue, as well as revenue from partnerships with travel agencies and online booking platforms. Additionally, Sunstone may benefit from management fees by operating hotels on behalf of third-party owners. The company also focuses on maximizing asset value through strategic renovations and operational efficiencies, contributing to increased revenue over time.

Sunstone Hotel Financial Statement Overview

Summary

Sunstone Hotel demonstrates a stable financial position with strong gross margins and efficient cash flow management. However, the company faces challenges in improving net profitability and return on equity. The moderate leverage and strong equity base provide a solid foundation for future growth.

Income Statement

Sunstone Hotel's income statement shows a modest revenue growth of 1.33% TTM, with a gross profit margin of 54.42% and a net profit margin of 2.15%. While the gross profit margin is strong, the net profit margin indicates limited profitability. The EBIT and EBITDA margins are 7.40% and 21.39% respectively, suggesting operational efficiency but room for improvement in profitability.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.44, indicating moderate leverage. The return on equity is low at 0.97%, suggesting limited returns for shareholders. The equity ratio stands at 65.75%, showing a strong equity base relative to total assets.

Cash Flow

Cash flow analysis reveals a healthy free cash flow growth of 2.40% TTM and a strong operating cash flow to net income ratio of 1.71. The free cash flow to net income ratio is 1.0, indicating efficient cash generation relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	937.93M	905.81M	986.48M	912.05M	509.15M	267.91M
Gross Profit	435.49M	421.74M	476.96M	447.66M	206.83M	16.22M
EBITDA	198.56M	214.29M	387.31M	249.23M	193.51M	-216.68M
Net Income	18.19M	43.26M	206.71M	87.29M	34.30M	-404.69M
Balance Sheet
Total Assets	3.05B	3.11B	3.15B	3.08B	3.04B	2.99B
Cash, Cash Equivalents and Short-Term Investments	121.14M	107.20M	426.40M	101.22M	120.48M	368.41M
Total Debt	926.03M	853.07M	831.29M	831.69M	634.55M	790.31M
Total Liabilities	1.09B	1.00B	982.68M	997.86M	801.27M	896.34M
Stockholders Equity	1.96B	2.10B	2.17B	2.08B	2.20B	2.05B
Cash Flow
Free Cash Flow	157.97M	170.38M	198.13M	80.81M	-35.29M	-116.70M
Operating Cash Flow	175.63M	170.38M	198.13M	209.38M	28.37M	-116.70M
Investing Cash Flow	-70.76M	-386.28M	258.08M	-165.72M	-239.69M	113.79M
Financing Cash Flow	-99.86M	-97.52M	-119.72M	-49.17M	-42.10M	-445.92M

Sunstone Hotel Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 9.09
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 9.09 is below the 20-day moving average (MA) of 9.24, below the 50-day MA of 9.26, and above the 200-day MA of 9.07, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 54.27 is Neutral, neither overbought nor oversold. The STOCH value of 54.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SHO.

Sunstone Hotel Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
XHR	65 Neutral	$1.33B	25.00	4.58%	3.84%	4.29%	141.01%
DRH	64 Neutral	$1.87B	34.90	3.98%	5.16%	0.95%	-8.40%
RLJ	62 Neutral	$1.10B	150.10	1.49%	7.88%	-0.58%	-83.32%
SHO	61 Neutral	$1.80B	1,890.00	0.88%	3.88%	3.04%	-98.77%
PEB	52 Neutral	$1.29B	―	-3.74%	0.35%	0.99%	-360.58%
PK	52 Neutral	$2.16B	―	-0.36%	13.05%	-3.57%	-104.55%

Sunstone Hotel Corporate Events

Sunstone Hotel Investors’ Earnings Call: Mixed Sentiment with Optimistic Outlook

The recent earnings call for Sunstone Hotel Investors revealed a mixed sentiment among stakeholders. While the company celebrated notable achievements in markets like San Francisco and demonstrated robust financial management, it also faced challenges such as disruptions from natural events and a generally challenging operating environment. Despite these hurdles, the company remains optimistic about its future growth prospects.

Sunstone Hotel Investors Reports Mixed Q3 2025 Results

Sunstone Hotel Investors, Inc. is a real estate investment trust (REIT) specializing in the ownership of upper upscale and luxury hotels, operating primarily under nationally recognized brands across convention, urban, and resort destinations.

Sunstone Hotel Secures $1.35 Billion Credit Agreement

On September 24, 2025, Sunstone Hotel Investors, Inc. entered into a Third Amended and Restated Credit Agreement with a total borrowing capacity of $1.35 billion. This agreement, which includes a $500 million revolving credit facility and three term loans totaling $850 million, aims to address near-term maturities, extend loan durations, and strengthen the company’s balance sheet. The credit facilities, led by major financial institutions, are designed to enhance Sunstone’s financial flexibility and lower borrowing costs through interest rate swaps, with over 75% of its debt now subject to fixed rates. The company plans to use the proceeds to consolidate its prior loans and repay its revolving credit facility, delaying the draw of $90 million until January 2026 to repay Series A Senior Notes, ensuring no debt maturities until 2028.

The most recent analyst rating on (SHO) stock is a Hold with a $10.00 price target. To see the full list of analyst forecasts on Sunstone Hotel stock, see the SHO Stock Forecast page.