SBRA
Sabra Health Care REIT, Inc.
$19.80
Real Estate Investment Trust
85%
P/FFO × Healthcare REIT Multiple
Moderate
·
Conviction
Fair Value
Trading 16.2% below fair value
You pay
$19.80
Bear
$18.39
Fair
$23.64
Bull
$28.90
Bear
$18.39
-7.2%
$1.36 FFO × 14x
Fair
$23.64
+19.4%
$1.36 FFO × 18x
Bull
$28.90
+45.9%
$1.36 FFO × 22x
Key Value Driver
FFO/share ($1.36) × healthcare P/FFO multiple
Implied Market Multiple
14.6x
Summary
Our base-case estimate uses P/FFO × Healthcare REIT Multiple. We then blend that result with the average analyst price target of $21.20 from 29 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $23.64 per share.
Warnings
Standard profit figures are misleading for real estate companies — large non-cash accounting charges make profits look artificially low. Dividend yield and funds from operations are better measures.
Dividend yield of 6.1% is unusually high — make sure the company generates enough cash to keep paying it.
Key Risks
- P/E and EV/EBITDA are structurally wrong for REITs — use P/FFO and NAV
- Interest rate sensitivity: REIT multiples compress when rates rise
- FFO approximation (NI + D&A) may include gains on property sales — verify