As of May 27, 2025, Sabra Health Care REIT Inc's estimated intrinsic value ranges from $14.10 to $24.22 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $22.45 | +28.8% |
| Discounted Cash Flow (5Y) | $20.87 | +19.7% |
| Dividend Discount Model (Multi-Stage) | $14.10 | -19.2% |
| Dividend Discount Model (Stable) | $16.04 | -8.0% |
| Earnings Power Value | $24.22 | +38.9% |
Is Sabra Health Care REIT Inc (SBRA) undervalued or overvalued?
With the current market price at $17.44, the stock appears to be moderately undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Sabra Health Care REIT Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.49 | 0.56 |
| Cost of equity | 6.1% | 8.0% |
| Cost of debt | 4.0% | 7.0% |
| Tax rate | 1.3% | 1.6% |
| Debt/Equity ratio | 0.58 | 0.58 |
| After-tax WACC | 5.3% | 7.6% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $21 | $7,337M | 85.0% |
| 10-Year Growth | $22 | $7,714M | 72.1% |
| 5-Year EBITDA | $15 | $6,018M | 81.7% |
| 10-Year EBITDA | $18 | $6,537M | 67.1% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $509M |
| Discount Rate (WACC) | 7.6% - 5.3% |
| Enterprise Value | $6,716M - $9,554M |
| Net Debt | $2,371M |
| Equity Value | $4,345M - $7,182M |
| Outstanding Shares | 238M |
| Fair Value | $18 - $30 |
| Selected Fair Value | $24.22 |
| Metric | Value |
|---|---|
| Market Capitalization | $4150M |
| Enterprise Value | $6521M |
| Trailing P/E | 29.48 |
| Forward P/E | 31.05 |
| Trailing EV/EBITDA | 15.80 |
| Current Dividend Yield | 679.76% |
| Dividend Growth Rate (5Y) | 0.17% |
| Debt-to-Equity Ratio | 0.58 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $6.74 |
| Discounted Cash Flow (5Y) | 25% | $5.22 |
| Dividend Discount Model (Multi-Stage) | 20% | $2.82 |
| Dividend Discount Model (Stable) | 15% | $2.41 |
| Earnings Power Value | 10% | $2.42 |
| Weighted Average | 100% | $19.60 |
Based on our comprehensive valuation analysis, Sabra Health Care REIT Inc's weighted average intrinsic value is $19.60, which is approximately 12.4% above the current market price of $17.44.
Key investment considerations:
Given these factors, we believe Sabra Health Care REIT Inc is currently moderately undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.