Sabra Health Care REIT, Inc. (SBRA) Share Strong as 2025 Housing Drives Control

0 8 3 minutes read

Shares of Sabra Health Care REIT, Inc. (SBRA) rose 1.22% to $21.49 in Friday trading following the release of its fourth quarter and full year 2025 results. The stock is currently trading near its 52-week high of $21.98, having recovered from the 52-week low of $13.41. The company presented guidance for 2026 and highlighted a record year of growth in its senior real estate portfolio.

Company Description

Sabra Health Care REIT, Inc. is a privately held, independent real estate investment trust that owns and invests in real estate serving the healthcare industry. The company’s portfolio primarily consists of skilled nursing and respite care facilities, senior housing communities (both leased and managed), and behavioral health and specialty hospitals. As of December 31, 2025, Sabra’s investment portfolio included 376 properties across the United States and Canada.

Current Stock Price

$21.49 (Feb 13, 2026)

Market Capitalization

Approximately 5.42 billion (based on 252.1 million shares outstanding)

Measurement

Sabra trades at a Price-to-FFO (Fund from Operations) multiple of 15.1x based on its 2026 guidance horizon. This number reflects the continued stabilization of housing and labor costs in the health care sector.

Financial Results for the Fourth Quarter and Full Year 2025

Sabra reported operating gains for the financial year ended 31 December 2025, supported by strong performance in its senior housing segment managed by RIDEA.

Quarterly Net Income: Net income attributable to common shareholders was $26.3 million, or $0.11 per diluted share, in the fourth quarter.
FFO and AFFO: Fourth Quarter Standardized FFO was $0.36 per share, while Adjusted FFO (AFFO) came in at $0.37 per share.
Full Year Performance: For the full year 2025, Common FFO totaled $1.41 per share, up from $1.34 in 2024. Full year AFFO was $1.44 per share.
Segment Growth: Senior real estate owned in the same area Cash Net Operating Income (NOI) increased 12.6% year-over-year in the fourth quarter. The full year average increase for this category was 15.0%.
Investment Activity: Sabra has closed approximately $450 million in total investment through 2025 at an average initial income of 7.5% on real estate acquisitions.

Management Outlook and direction for 2026

The company presented its financial goals for the fiscal year ending December 31, 2026:

2026 EPS Guidance: Net income is estimated between $0.51 and $0.55 per share.
2026 FFO Guidance: Average FFO is expected to be $1.40 to $1.44 per share, while Average AFFO is expected to be $1.43 to $1.47 per share.
Acquisitions: In the fourth quarter, Sabra acquired four senior real estate properties for $150.5 million for an initial capital gain of 7.0%.
Healthcare Portfolio: EBITDARM coverage for the Skilled Nursing/Respite Care portfolio was 2.38x at year end.

Major stresses and surface exposures

Sabra continues to manage industry-wide pressures related to labor shortages and government refund policies.

Labor and Inflation: Rising labor costs and labor shortages remain a key risk factor for employers and managed properties.
Geopolitical/Tariff Exposure: Sabra operates in the US and Canada, leaving it with little direct exposure to international trade charges. However, it remains sensitive to fluctuations in the Canadian dollar exchange rate.
Capital Structure: As of December 31, 2025, the company maintained a Total Debt to Adjusted EBITDA ratio of 5.45x, including its share of joint debt.

Sabra Health Care REIT (SBRA) SWOT Analysis

Power

Record Owned Growth: 15.0% average quarterly year-over-year increase in Cash NOI for owned properties through 2025.
Diversified Portfolio: Investments across 376 properties in five asset classes, including behavioral health and specialty hospitals.
Liquidity Position: Access to a $1.0 billion revolving credit facility for future acquisitions.

Weakness

Reliance on Government Payments: Significant reliance on Medicare and Medicaid reimbursements for skilled nursing facilities.
Tenant Concentration: Profits are at stake in the financial health of a concentrated group of health workers.
Interest Rate Sensitivity: A high level of debt makes the company more sensitive to rising interest rates in the market.

Opportunities

Aging Demographics: Long-term demand for nursing homes driven by North America’s aging population.
Behavioral Health Expansion: High-yield investment opportunities in the behavioral health specialty sector.
Investment Pipeline: Ability to leverage existing capital to leverage its annual investment velocity of $450 million.

Threats

Regulatory Changes: The possibility of legislative changes contrary to health care regulations or tax laws affecting REITs.
Macroeconomic volatility: Uncertainty in global financial markets and potential disruptions in access to finance.
Natural Hazards: Exposure to catastrophic weather events and the impacts of climate change on property values.