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Sunstone Hotel
(NYSE:SHO)
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Rating:64Neutral
Price Target:
$12.50
â–²(29.53% Upside)
Action:Reiterated
Date:06/24/26
SHO scores in the mid-range primarily because financial fundamentals are solid but not exceptional (good cash flow and manageable leverage, but weaker/less consistent profitability). The latest earnings call and corporate actions were notably supportive due to raised 2026 guidance and value-focused capital recycling/buybacks. Technicals are positive but appear overextended, while valuation is the biggest drag given the very high P/E despite a ~3% dividend yield.
Positive Factors
Solid cash generation and positive FCF
Sustained operating cash flow and materially positive free cash flow provide durable internal funding for capex, dividends, and buybacks. This financial flexibility supports execution of value-accretive portfolio moves and cushions the business against cyclical occupancy swings over the medium term.
Negative Factors
Thin and compressed profitability
Low net margins and a depressed ROE (TTM ~1.9%) limit the firm's ability to generate returns on invested capital. Persistent margin compression and earnings volatility reduce predictability of FFO and dividend coverage, constraining sustainable growth and investor returns over multiple quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Solid cash generation and positive FCF
Sustained operating cash flow and materially positive free cash flow provide durable internal funding for capex, dividends, and buybacks. This financial flexibility supports execution of value-accretive portfolio moves and cushions the business against cyclical occupancy swings over the medium term.
Read all positive factors
Sunstone Hotel (SHO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.13B
Dividend Yield3.98%
Average Volume (3M)1.25M
Price to Earnings (P/E)81.6
Beta (1Y)0.87
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-3.02
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/Revenue3.09
Enterprise Value/Gross Profit49.63
Enterprise Value/Ebitda13.52
Forecast
1Y Price Target
$11.63Price Target Upside20.47% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
EPS Forecast (FY)0.08
Revenue Forecast (FY)$991.25M
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:Aug 06, 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
10.69
Positive
9.93
Positive
9.49
Positive
Market Momentum
0.33
Positive
68.52
Neutral
42.71
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 below the 20-day moving average (MA) of 11.55, below the 50-day MA of 10.69, and above the 200-day MA of 9.49, indicating a bullish trend. The MACD of 0.33 indicates Positive momentum. The RSI at 68.52 is Neutral, neither overbought nor oversold. The STOCH value of 42.71 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 | $2.50B | 25.51 | 6.89% | 5.13% | -0.40% | 136.86% | |
67 Neutral | $1.81B | -1,156.80 | 1.14% | 7.76% | -0.83% | -103.51% | |
66 Neutral | $2.20B | -25.02 | -2.07% | 0.34% | 2.84% | -83.41% | |
66 Neutral | $2.87B | -13.26 | -6.59% | 13.10% | -2.20% | -280.33% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
65 Neutral | $1.88B | 30.48 | 5.76% | 3.71% | 2.31% | 208.08% | |
64 Neutral | $2.13B | 81.62 | 1.94% | 3.98% | 6.83% | 23.48% |
* Real Estate Sector Average
SHO
Sunstone Hotel
11.66
3.08
35.85%
DRH
Diamondrock
12.18
4.62
61.11%
PEB
Pebblebrook Hotel
19.41
9.11
88.48%
RLJ
RLJ Lodging
11.85
4.89
70.23%
XHR
Xenia Hotels & Resorts
20.36
7.81
62.24%
PK
Park Hotels & Resorts
14.25
4.48
45.91%
Sunstone Hotel Corporate Events
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...
Business Operations and StrategyStock BuybackFinancial Disclosures
Sunstone Hotel Raises Outlook on Strong First-Quarter Performance
Positive
Jun 1, 2026
On June 1, 2026, Sunstone Hotel Investors, Inc. released an updated investor presentation highlighting strong first-quarter 2026 performance and a higher full-year earnings outlook, after delivering Adjusted EBITDAre of $68 million and Adjusted FF...
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.