Sunstone Hotel Investors, Inc.
Sunstone Hotel Investors, Inc. Fundamental Analysis
Sunstone Hotel Investors, Inc. (SHO) shows weak financial fundamentals with a PE ratio of 95.89, profit margin of 1.94%, and ROE of 0.90%. The company generates $0.9B in annual revenue with weak year-over-year growth of -8.13%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 20.7/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze SHO's fundamental strength across five key dimensions:
Efficiency Score
WeakSHO struggles to generate sufficient returns from assets.
Valuation Score
ModerateSHO shows balanced valuation metrics.
Growth Score
WeakSHO faces weak or negative growth trends.
Financial Health Score
ExcellentSHO maintains a strong and stable balance sheet.
Profitability Score
ModerateSHO maintains healthy but balanced margins.
Key Financial Metrics
Is SHO Expensive or Cheap?
P/E Ratio
SHO trades at 95.89 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, SHO's PEG of -1.64 indicates potential undervaluation.
Price to Book
The market values Sunstone Hotel Investors, Inc. at 0.89 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 4.76 times EBITDA. This is generally considered low.
How Well Does SHO Make Money?
Net Profit Margin
For every $100 in sales, Sunstone Hotel Investors, Inc. keeps $1.94 as profit after all expenses.
Operating Margin
Core operations generate 7.27 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $0.90 in profit for every $100 of shareholder equity.
ROA
Sunstone Hotel Investors, Inc. generates $0.60 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Sunstone Hotel Investors, Inc. produces operating cash flow of $176.23M, showing steady but balanced cash generation.
Free Cash Flow
Sunstone Hotel Investors, Inc. generates strong free cash flow of $158.52M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $0.83 in free cash annually.
FCF Yield
SHO converts 9.00% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
95.89
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-1.64
vs 25 benchmark
P/B Ratio
Price to book value ratio
0.89
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.87
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.47
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.36
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.009
vs 25 benchmark
ROA
Return on assets percentage
0.006
vs 25 benchmark
ROCE
Return on capital employed
0.02
vs 25 benchmark
How SHO Stacks Against Its Sector Peers
| Metric | SHO Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 95.89 | 24.42 | Worse (Expensive) |
| ROE | 0.90% | 679.00% | Weak |
| Net Margin | 1.94% | 4578.00% | Weak |
| Debt/Equity | 0.47 | -22.07 (disorted) | Distorted |
| Current Ratio | 2.36 | 14.99 | Strong Liquidity |
| ROA | 0.60% | -1370.00% (disorted) | Weak |
SHO outperforms its industry in 1 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Sunstone Hotel Investors, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
-9.13%
Industry Style: Income, Inflation Hedge, REIT
DecliningEPS CAGR
-64.34%
Industry Style: Income, Inflation Hedge, REIT
DecliningFCF CAGR
-34.49%
Industry Style: Income, Inflation Hedge, REIT
Declining