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Sunstone Hotel
(NYSE:SHO)
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Rating:64Neutral
Price Target:
$12.00
â–²(6.86% Upside)
Action:Reiterated
Date:09/07/26
The score is primarily supported by solid financial stability (notably very low leverage) and strong recent revenue momentum, plus constructive corporate actions (asset sale and buybacks improving liquidity and flexibility). It is held back by weaker technical momentum, elevated P/E valuation, and mixed earnings/cash-flow consistency with a declining TTM free-cash-flow trend.
Positive Factors
Strong Revenue Growth
The sharp TTM revenue increase indicates stronger property-level demand and improved portfolio earning capacity. If sustained, this growth can support higher operating cash flow, strengthen Sunstone’s ability to reinvest in hotels, and improve its competitive position over the next several quarters.
Negative Factors
Volatile Profitability
The sustained move from unusually strong 2023 profitability to much lower recent margins shows that revenue growth has not translated consistently into earnings. Margin volatility makes future profitability harder to predict and may limit internally generated capital for reinvestment or shareholder distributions.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Revenue Growth
The sharp TTM revenue increase indicates stronger property-level demand and improved portfolio earning capacity. If sustained, this growth can support higher operating cash flow, strengthen Sunstone’s ability to reinvest in hotels, and improve its competitive position over the next several quarters.
Read all positive factors
Sunstone Hotel (SHO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.06B
Dividend Yield3.31%
Average Volume (3M)2.40M
Price to Earnings (P/E)44.0
Beta (1Y)0.74
Revenue Growth7.28%
EPS Growth945.58%
CountryUS
Employees37
SectorReal Estate
Sector Strength53
IndustryREIT - Hotel & Motel
Share Statistics
EPS (TTM)0.25
Shares Outstanding185,943,940
10 Day Avg. Volume2,214,395
30 Day Avg. Volume2,397,323
Financial Highlights & Ratios
PEG Ratio-3.02
Price to Book (P/B)0.89
Price to Sales (P/S)1.80
P/FCF Ratio21.99
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$11.83Price Target Upside5.37% Upside
Rating ConsensusHold
Number of Analyst Covering4
EPS Forecast (FY)0.28
Revenue Forecast (FY)$970.05M
Sunstone Hotel Business Overview & Revenue Model
Company Description
Sunstone Hotel Investors, Inc. functions as a real estate investment trust (REIT) focused on the hospitality sector. As of the current date, its holdings include interests in 19 hotel properties, which collectively offer 9,997 guest rooms. Sunston...
How the Company Makes Money
Sunstone makes money primarily by owning hotel real estate and earning hotel-level cash flow generated from guest and on-property spending. Its core revenue streams come from (1) rooms revenue (nightly rates paid by transient and group travelers),...
Sunstone Hotel Earnings Call Summary
Earnings Call Date:May 05, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Nov 10, 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
86
Very Positive
Cash Flow
58
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.00B | 960.13M | 905.81M | 986.48M | 912.05M | 509.15M |
| Gross Profit | 207.93M | 45.58M | 421.74M | 476.96M | 447.66M | 206.83M |
| EBITDA | 240.27M | 212.26M | 214.29M | 387.31M | 249.23M | 193.51M |
| Net Income | 53.12M | 24.57M | 43.26M | 206.71M | 87.29M | 34.30M |
Balance Sheet | ||||||
| Total Assets | 3.03B | 3.03B | 3.11B | 3.15B | 3.08B | 3.04B |
| Cash, Cash Equivalents and Short-Term Investments | 94.43M | 109.19M | 107.20M | 426.40M | 101.22M | 120.48M |
| Total Debt | 974.90M | 925.43M | 853.07M | 831.29M | 831.69M | 634.55M |
| Total Liabilities | 1.15B | 1.08B | 1.00B | 982.68M | 997.86M | 801.27M |
| Stockholders Equity | 1.88B | 1.94B | 2.10B | 2.17B | 2.08B | 2.20B |
Cash Flow | ||||||
| Free Cash Flow | 115.72M | 78.71M | 170.38M | 198.13M | 80.81M | -35.29M |
| Operating Cash Flow | 198.44M | 181.76M | 170.38M | 198.13M | 209.38M | 28.37M |
| Investing Cash Flow | -67.36M | -48.80M | -386.28M | 258.08M | -165.72M | -239.69M |
| Financing Cash Flow | -72.29M | -127.52M | -97.52M | -119.72M | -49.17M | -42.10M |
Sunstone Hotel Technical Analysis
Negative
11.23
Price Trends
11.32
Negative
10.97
Negative
9.98
Positive
Market Momentum
-0.09
Positive
38.70
Neutral
15.43
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SHO, the sentiment is Negative. The current price of 11.23 is above the 20-day moving average (MA) of 11.07, below the 50-day MA of 11.32, and above the 200-day MA of 9.98, indicating a neutral trend. The MACD of -0.09 indicates Positive momentum. The RSI at 38.70 is Neutral, neither overbought nor oversold. The STOCH value of 15.43 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
73 Outperform | $1.66B | -236.63 | -0.62% | 3.16% | 1.65% | -112.43% | |
70 Outperform | $2.48B | 16.38 | 10.27% | 3.51% | 1.03% | 159.56% | |
68 Neutral | $2.03B | -26.33 | -1.90% | 0.23% | 2.08% | -25.62% | |
66 Neutral | $3.07B | -18.43 | -5.14% | 6.62% | -1.36% | -405.10% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
64 Neutral | $2.06B | 44.04 | 2.76% | 3.31% | 7.28% | 945.58% | |
62 Neutral | $1.67B | 261.37 | 1.26% | 5.61% | 1.07% | -96.66% |
* Real Estate Sector Average
SHO
Sunstone Hotel
10.86
1.82
20.17%
DRH
Diamondrock
11.97
3.94
49.05%
PEB
Pebblebrook Hotel
17.64
6.24
54.67%
RLJ
RLJ Lodging
10.69
3.62
51.14%
XHR
Xenia Hotels & Resorts
17.70
3.87
27.96%
PK
Park Hotels & Resorts
15.11
4.37
40.72%
Sunstone Hotel Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Sunstone Hotel Launches New $300 Million Equity Program
Positive
Aug 11, 2026
On August 10, 2026, Sunstone Hotel Investors and its operating partnership launched a new at-the-market equity distribution program, allowing the company to issue and sell up to $300 million of common stock through a syndicate of major broker-deal...
Business Operations and StrategyStock BuybackM&A Transactions
Sunstone Hotel Sells Hyatt Regency San Francisco Asset
Positive
Jun 23, 2026
On June 23, 2026, Sunstone Hotel Investors announced a definitive agreement to sell the 821-room Hyatt Regency San Francisco to Blackstone Real Estate-affiliated funds for $279 million, or about $340,000 per key, implying a 21.4x multiple on Hotel...
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.