Rating Change #6
Sabra Health Care REIT Inc (SBRA) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its unimpressive growth in net income and weak operating cash flow.
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Highlights from the ratings report include:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Real Estate Investment Trusts (REITs) industry. The net income has significantly decreased by 44.7% when compared to the same quarter one year ago, falling from $7.16 million to $3.96 million.
- Net operating cash flow has decreased to $8.35 million or 18.10% when compared to the same quarter last year. Despite a decrease in cash flow SABRA HEALTH CARE REIT INC is still fairing well by exceeding its industry average cash flow growth rate of -42.58%.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Real Estate Investment Trusts (REITs) industry and the overall market, SABRA HEALTH CARE REIT INC's return on equity is below that of both the industry average and the S&P 500.
- 47.30% is the gross profit margin for SABRA HEALTH CARE REIT INC which we consider to be strong. Regardless of SBRA's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SBRA's net profit margin of 13.99% is significantly lower than the industry average.
- SABRA HEALTH CARE REIT INC's earnings per share declined by 42.1% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SABRA HEALTH CARE REIT INC increased its bottom line by earning $0.53 versus $0.39 in the prior year. This year, the market expects an improvement in earnings ($1.32 versus $0.53).