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Senior Housing Properties (SNH) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research

Senior Housing Properties (SNH) closed at $8.10 in the latest trading session, marking a -0.98% move from the prior day. This change lagged the S&P 500's daily gain of 0.47%. Elsewhere, the Dow gained 0.31%, while the tech-heavy Nasdaq added 0.34%.

Heading into today, shares of the residential care real estate investment trust had lost 30.5% over the past month, lagging the Finance sector's gain of 5.13% and the S&P 500's gain of 4.67% in that time.

Wall Street will be looking for positivity from SNH as it approaches its next earnings report date. This is expected to be May 9, 2019. The company is expected to report EPS of $0.38, down 15.56% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $269.96 million, down 2.13% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.36 per share and revenue of $1.03 billion. These totals would mark changes of -14.47% and -7.44%, respectively, from last year.

Any recent changes to analyst estimates for SNH should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 18.27% lower. SNH currently has a Zacks Rank of #5 (Strong Sell).

In terms of valuation, SNH is currently trading at a Forward P/E ratio of 6.03. This valuation marks a discount compared to its industry's average Forward P/E of 15.08.

Investors should also note that SNH has a PEG ratio of 2.62 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The REIT and Equity Trust - Other industry currently had an average PEG ratio of 2.85 as of yesterday's close.

The REIT and Equity Trust - Other industry is part of the Finance sector. This group has a Zacks Industry Rank of 165, putting it in the bottom 36% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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