Yahoo Finance Sabra Health Care REIT, Inc. Just Released Its Annual Results And Analysts Are Updating Their Estimates
Sabra Health Care REIT, Inc. (NASDAQ:SBRA) shares fell 3.0% to US$21.22 in the week since its latest yearly results. Sabra Health Care REIT reported US$662m in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$0.37 beat expectations, being 2.3% higher than what analysts expected. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether analysts have changed their earnings models, following these results.
Check out our latest analysis for Sabra Health Care REIT
Taking into account the latest results, the current consensus, from the four analysts covering Sabra Health Care REIT, is for revenues of US$637.5m in 2020, which would reflect a perceptible 3.7% reduction in Sabra Health Care REIT's sales over the past 12 months. Statutory earnings per share are expected to soar 139% to US$0.88. Yet prior to the latest earnings, analysts had been forecasting revenues of US$615.1m and earnings per share (EPS) of US$0.81 in 2020. It looks like there's been a modest increase in sentiment following the latest results, with analysts becoming a bit more optimistic in their predictions for both revenues and earnings.
Despite these upgrades, analysts have not made any major changes to their price target of US$22.18, suggesting that the higher estimates are not likely to have a long term impact on what the stock is worth. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Sabra Health Care REIT, with the most bullish analyst valuing it at US$27.00 and the most bearish at US$20.00 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
It can be useful to take a broader overview by seeing how analyst forecasts compare, both to the Sabra Health Care REIT's past performance and to peers in the same market. These estimates imply that sales are expected to slow, with a forecast revenue decline of 3.7% a significant reduction from annual growth of 28% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same market are forecast to see their revenue grow 4.9% annually for the foreseeable future. It's pretty clear that Sabra Health Care REIT's revenues are expected to perform substantially worse than the wider market.
The Bottom Line
The most important thing to take away from this is that analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Sabra Health Care REIT following these results. Fortunately, analysts also upgraded their revenue estimates, although our data indicates sales are expected to perform worse than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Sabra Health Care REIT analysts - going out to 2024, and you can see them free on our platform here.
It might also be worth considering whether Sabra Health Care REIT's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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