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1. Company Snapshot

1.a. Company Description

Brookdale Senior Living Inc.owns, manages, and operates senior living communities in the United States.It operates in three segments: Independent Living, Assisted Living and Memory Care, and Continuing Care Retirement Communities (CCRCs).


The Independent Living segment owns or leases communities comprising independent and assisted living units in a single community that are primarily designed for middle to upper income seniors.The Assisted Living and Memory Care segment owns or leases communities consisting of freestanding multi-story communities and freestanding single-story communities, which offer housing and 24-hour assistance with activities of daily living for the Company's residents.This segment also operates memory care communities for residents with Alzheimer's and other dementias.


The CCRCs segment owns or leases communities that provides various living arrangements, such as independent and assisted living, memory care, and skilled nursing; and services to accommodate various levels of physical ability and healthcare needs.It also manages communities on behalf of others.As of December 31, 2021, the company owned 347 communities, leased 299 communities, and managed 33 communities on behalf of others.


Brookdale Senior Living Inc.was incorporated in 2005 and is headquartered in Brentwood, Tennessee.

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1.b. Last Insights on BKD

Recent positive drivers behind Brookdale Senior Living Inc.'s performance include improved weighted average occupancy rates, growing 10 bps sequentially in November. The company's Q4 results reflect escalating general and administrative costs, partly offset by improved occupancy rates. Brookdale also projects 2025 adjusted EBITDA within $430-$445 million. Additionally, the company has completed two strategic portfolio acquisitions, expanding its real estate footprint and increasing its ownership position. Wall Street analysts' average price target indicates a potential upside of 35.4%.

1.c. Company Highlights

2. Brookdale Senior Living's Q3 2025 Earnings: A Strong Performance

Brookdale Senior Living reported a solid Q3 2025 performance, with revenues driven by a 5.9% increase in RevPAR, resulting in a 4.2% year-over-year increase in resident and management fees to $778 million. However, the company's EPS came in at -$0.2, slightly below estimates of -$0.16. The adjusted EBITDA increased by 20% year-over-year to $111.1 million, and the company generated positive adjusted free cash flow of $21.8 million, up 57% from the prior year. The company's same-community operating income grew 6% from the prior year, and the operating income margin improved by 10 basis points.

Publication Date: Nov -20

📋 Highlights
  • Occupancy Growth:: Q3 consolidated occupancy reached 83.8%, up 170 bps sequentially, with same-community occupancy at 82.3% (highest since Q1 2020).
  • Adjusted EBITDA Surge:: Adjusted EBITDA rose 20% YoY to $111.1M, driven by 5.3% same-community RevPAR growth and improved operating margins.
  • Free Cash Flow Expansion:: Generated $21.8M in adjusted free cash flow, a 57% YoY increase, marking the third consecutive quarter of positive results.
  • Portfolio Optimization:: Reduced low-occupancy communities (<70%) to 89 from 143 in Q1, while transitioning 13 Ventas assets and exiting 10 communities.
  • Leverage Improvement:: Adjusted annualized leverage dropped to 9.0x EBITDA (from 9.9x in 2024), with a goal to reach <6x over several years via growth and dispositions.

Operational Highlights

The company's occupancy achieved a weighted average of 81.8% and 82.3% on a same-community basis, the highest level since Q1 2020. Brookdale closed the quarter with a consolidated occupancy of 83.8% and 84.0% on a same-store basis. The company is making progress against its five-pronged strategy, including improving operating performance, optimizing its real estate portfolio, reinvesting capital, reducing leverage, and elevating quality. As Nick Stengle, the new CEO, noted, "We're pivoting to a more offensive posture, doubling down on our cultural mindset as an operating company built on a real estate foundation."

Valuation and Outlook

Analysts estimate next year's revenue growth at -5.1%. Given the current valuation metrics, with a P/S Ratio of 0.79 and EV/EBITDA of 10.35, the market is pricing in a certain level of growth. The company's adjusted annualized leverage improved to 9x, and it expects it to continue declining significantly in coming years via adjusted EBITDA growth and disposition activity. Brookdale is confident in its ability to achieve mid-teen EBITDA growth over the next few years, driven by market dynamics, including scarcity of supply and increasing demand.

Financial Flexibility and Leverage

The company's total liquidity was $351.6 million as of September 30, up $1.6 million from the second quarter. Brookdale's adjusted annualized leverage improved to 9x, and it expects it to continue declining significantly in coming years. The company's net debt to EBITDA ratio is 2.74, indicating a manageable level of leverage. With a Free Cash Flow Yield of 3.29%, the company is generating cash, which should help drive down leverage and create shareholder value.

3. NewsRoom

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BROOKDALE ANNOUNCES CHIEF OPERATING OFFICER

Nov -18

Source: prnewswire.com

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Brookdale Senior Living Honors Veterans with Donation to Folds of Honor

Nov -11

Source: prnewswire.com

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Brookdale Senior Living Inc. (BKD) Q3 2025 Earnings Call Transcript

Nov -08

Source: seekingalpha.com

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Brookdale Announces Third Quarter 2025 Results and Increases Adjusted EBITDA Annual Guidance

Nov -06

Source: prnewswire.com

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Brookdale Announces Third Quarter 2025 Earnings Release and Conference Call Dates

Oct -22

Source: prnewswire.com

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Brookdale (BKD) Stock Jumps 9.4%: Will It Continue to Soar?

Oct -10

Source: zacks.com

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Why Brookdale Senior Living Stock Blasted 9% Higher Today

Oct -09

Source: fool.com

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Brookdale Posts Strong YoY Rise in September 2025 Occupancy

Oct -09

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.51%)

6. Segments

Assisted Living and Memory Care

Expected Growth: 6.5%

Brookdale Senior Living Inc.'s Assisted Living and Memory Care segment growth of 6.5% is driven by increasing demand for senior housing, aging population, and rising prevalence of Alzheimer's and dementia. Additionally, Brookdale's strategic expansion into new markets, investments in technology, and focus on person-centered care are contributing to the segment's growth.

Independent Living

Expected Growth: 6.2%

Brookdale Senior Living Inc.'s Independent Living segment growth of 6.2% is driven by increasing demand for senior housing, aging population, and expanding private pay opportunities. Additionally, strategic partnerships, investments in technology, and enhanced resident experiences contribute to the segment's growth.

Continuing Care Retirement Communities

Expected Growth: 6.8%

Brookdale Senior Living Inc.'s Continuing Care Retirement Communities (CCRCs) growth of 6.8% is driven by increasing demand for senior housing, aging population, and need for care services. Additionally, Brookdale's diversified portfolio, strategic partnerships, and focus on person-centered care contribute to its growth. The company's ability to offer a range of services, from independent living to skilled nursing, also supports its growth in the CCRC segment.

Management Services

Expected Growth: 7.2%

Brookdale Senior Living Inc.'s 7.2% growth in Management Services is driven by increasing demand for senior living communities, strategic partnerships, and expansion into new markets. Additionally, the company's focus on operational efficiency, cost savings initiatives, and investments in technology have contributed to the growth.

7. Detailed Products

Independent Living

Residential living for active seniors who want to maintain their independence, with access to amenities and services.

Assisted Living

Supportive care for seniors who need assistance with daily living activities, such as bathing, dressing, and medication management.

Memory Care

Specialized care for seniors with Alzheimer's disease or other dementias, with a focus on safety, comfort, and engagement.

Skilled Nursing

Short-term rehabilitation and long-term care for seniors who require medical attention and therapy.

Home Health

In-home medical and non-medical care for seniors who prefer to receive care in the comfort of their own homes.

Outpatient Therapy

Physical, occupational, and speech therapy services for seniors who require rehabilitation.

Hospice Care

Compassionate care for seniors with terminal illnesses, focusing on comfort and quality of life.

8. Brookdale Senior Living Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Brookdale Senior Living Inc. faces moderate threat from substitutes as seniors have limited alternatives for senior living services. However, the company's focus on providing high-quality care and amenities helps to differentiate it from potential substitutes.

Bargaining Power Of Customers

Brookdale Senior Living Inc. has a low bargaining power of customers due to the emotional and personal nature of senior living services. Seniors and their families often prioritize quality of care over cost, reducing their bargaining power.

Bargaining Power Of Suppliers

Brookdale Senior Living Inc. faces moderate bargaining power from suppliers, primarily due to the availability of alternative suppliers for food, medical supplies, and other essential services. However, the company's scale and reputation help to mitigate supplier power.

Threat Of New Entrants

Brookdale Senior Living Inc. faces a low threat from new entrants due to the high barriers to entry in the senior living industry, including regulatory hurdles, high capital expenditures, and the need for specialized expertise.

Intensity Of Rivalry

Brookdale Senior Living Inc. operates in a highly competitive senior living industry, with numerous established players and a growing demand for services. The company must continually innovate and improve its services to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 92.13%
Debt Cost 4.68%
Equity Weight 7.87%
Equity Cost 10.54%
WACC 5.14%
Leverage 1170.69%

11. Quality Control: Brookdale Senior Living Inc. passed 0 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Healthcare Services Group

A-Score: 4.8/10

Value: 4.0

Growth: 2.9

Quality: 5.8

Yield: 2.0

Momentum: 9.5

Volatility: 4.7

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Brookdale Senior Living

A-Score: 3.9/10

Value: 5.1

Growth: 3.1

Quality: 2.1

Yield: 0.0

Momentum: 9.0

Volatility: 4.3

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Sonida Senior Living

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Value: 5.8

Growth: 2.7

Quality: 2.1

Yield: 0.0

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Volatility: 5.3

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AirSculpt Technologies

A-Score: 3.7/10

Value: 4.6

Growth: 4.8

Quality: 2.5

Yield: 1.0

Momentum: 8.0

Volatility: 1.3

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AMN Healthcare Services

A-Score: 3.4/10

Value: 9.2

Growth: 4.7

Quality: 3.0

Yield: 0.0

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The Joint

A-Score: 3.2/10

Value: 3.3

Growth: 3.3

Quality: 4.9

Yield: 0.0

Momentum: 3.5

Volatility: 4.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

10.78$

Current Price

10.78$

Potential

-0.00%

Expected Cash-Flows