SBRA
Sabra Health Care REIT, Inc.
$20.72
Real Estate Investment Trust
85%
P/FFO × Healthcare REIT Multiple
Mild
·
Conviction
Fair Value
Trading 12.8% below fair value
You pay
$20.72
Bear
$18.48
Fair
$23.75
Bull
$29.04
Bear
$18.48
-10.8%
$1.36 FFO × 14x
Fair
$23.75
+14.6%
$1.36 FFO × 18x
Bull
$29.04
+40.2%
$1.36 FFO × 22x
Key Value Driver
FFO/share ($1.36) × healthcare P/FFO multiple
Implied Market Multiple
15.3x
Summary
Our base-case estimate uses P/FFO × Healthcare REIT Multiple. We then blend that result with the average analyst price target of $21.67 from 29 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $23.75 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 5.8% 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