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1. Company Snapshot

1.a. Company Description

Sonida Senior Living, Inc.develops, owns, operates, and manages senior housing communities in the United States.The company provides independent living services, which include daily meals, transportation, social and recreational activities, laundry, housekeeping, and 24-hour staffing; and access to health screenings, periodic special services, and dietary and similar programs, as well as exercise and fitness classes.


It also offers assisted living services consist of personal care services, such as assistance with activities of daily living, including ambulation, bathing, dressing, eating, grooming, personal hygiene, and monitoring or assistance with medications; support services, such as meals, assistance with social and recreational activities, laundry, general housekeeping, maintenance, and transportation services; and supplemental services, which include extra transportation, personal maintenance, and extra laundry services, as well as special care services for residents with various forms of dementia.In addition, the company provides memory care services; and home care services through third-party providers.As of December 31, 2021, it operated 75 senior housing communities in 18 states with an aggregate capacity of approximately 9,500 residents, including 60 senior housing communities.


The company was formerly known as Capital Senior Living Corporation and changed its name to Sonida Senior Living, Inc.in November 2021.Sonida Senior Living, Inc.


was founded in 1990 and is based in Addison, Texas.

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1.b. Last Insights on SNDA

Negative drivers behind Sonida Senior Living's recent stock performance include: 1. **Slowing Same-Store Revenue Growth**: Despite a focus on operational and financial strategies, Sonida's same-store revenue growth has slowed, indicating a potential plateau in its core business. 2. **Increased Competition**: The senior living industry is highly competitive, and Sonida faces challenges from other operators and investors, which may impact its ability to attract and retain residents. 3. **General Counsel Transition**: The upcoming transition of General Counsel, David Brickman, to a new role may create uncertainty and disrupt the company's leadership structure. 4. **Acquisition Integration Challenges**: Sonida's recent acquisition of $48 million in investments may pose integration challenges, potentially affecting its operational efficiency and financial performance. 5. **Capital Allocation Strategy**: While Sonida's accretive growth strategy aims to expand its portfolio, it may also lead to increased debt and financial obligations, potentially weighing on its stock performance.

1.c. Company Highlights

2. Sonida Senior Living's Q3 Earnings: A Mixed Bag

Sonida Senior Living's third-quarter results showed a mixed financial performance. Revenue growth was driven by occupancy and rate growth, with total portfolio Net Operating Income (NOI) growing 21% year-over-year, and Adjusted EBITDA improving more than 30%. However, the company's EPS came out at -$1.56, missing estimates of -$0.75. The company's total portfolio NOI growth was largely driven by same-store occupancy, which increased 90 basis points in sequential quarters to 87.7%, and average occupancy for the month of October reached a record high of 88%. As Kevin J. Detz noted, "the company has seen significant progress in overall labor management, and the availability of more robust technology related to labor has allowed for increased visibility in communities where costs have not flexed with the pace of occupancy growth."

Publication Date: Nov -18

📋 Highlights
  • Merger Agreement: Signed with CNL Healthcare Properties for $1.8 billion, expected to boost AFFO per share and reduce leverage.
  • Q3 Financial Growth: Total portfolio NOI rose 21% YoY, Adjusted EBITDA improved >30%, and same-store occupancy reached 87.7% (post-COVID high).
  • Labor Efficiency: Labor metrics stabilized post-restructuring, with technology enabling better cost visibility in high-occupancy communities.
  • Acquisition Portfolio: Occupancy increased 180 bps, driving $10M annualized revenue growth and 50% of communities achieving ≥10% YoY NOI growth.
  • Merger Costs: $6.2M incurred in Q3, part of $75M total transaction costs, with plans to expand margins to 30% by 2026 via rate growth and labor cost reduction.

Operational Highlights

The company's operational performance was a bright spot, with same-store occupancy reaching 87.7% in Q3, the highest quarter post-COVID. The acquisition portfolio also showed significant improvement, with occupancy increasing 180 basis points, leading to an increase in annualized revenues of $10 million for the same period. The company's focus on labor management and operational excellence has started to pay off, with labor metrics remaining steady in the early stages of the fourth quarter.

Merger and Acquisition Update

Sonida Senior Living announced a merger agreement to acquire CNL Healthcare Properties (CHP) for $1.8 billion, which is expected to accelerate the company's growth profile and deliver significant value to shareholders. The transaction is expected to be accretive to Adjusted Funds From Operations (AFFO) per share and materially reduce leverage. The company's management is working on integration plans, including strategic discussions with CHP's current operators to identify a clear path forward post-closing.

Valuation Metrics

Sonida Senior Living's valuation metrics are mixed, with a P/S Ratio of 1.6 and an EV/EBITDA ratio of 88.62, indicating a potentially high valuation. The company's P/E Ratio is -12.09, and the ROE is -51.69%, indicating a challenging earnings environment. Analysts estimate next year's revenue growth at 6.2%, which may help improve the company's valuation metrics.

Outlook

The company's guidance is focused on delivering excellent clinical care and services, and driving NOI flow-through with a strong occupancy base. The operations team is focused on performance improvement at communities with weak or negative year-over-year NOI growth. The merger with CHP is expected to bring significant opportunities for growth, but also poses integration risks. Overall, Sonida Senior Living's Q3 earnings report highlights the company's progress in operational performance, but also raises concerns about its financial performance and valuation metrics.

3. NewsRoom

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Seniors Housing REITs: Generational Compounding Opportunity

Dec -04

Source: seekingalpha.com

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Sonida Senior Living, Inc. (SNDA) Q3 2025 Earnings Call Transcript

Nov -10

Source: seekingalpha.com

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Sonida Senior Living (SNDA) Reports Q3 Loss, Tops Revenue Estimates

Nov -10

Source: zacks.com

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Sonida Senior Living (SNDA) Soars 14.7%: Is Further Upside Left in the Stock?

Nov -06

Source: zacks.com

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Newmark Serves as Real Estate Advisor on $1.8 Billion Strategic Merger Between Sonida Senior Living and CNL Healthcare Properties

Nov -05

Source: prnewswire.com

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Sonida Senior Living Investor Alert By The Former Attorney General Of Louisiana: Kahn Swick & Foti, LLC Investigates Merger of Sonida Senior Living, Inc. - SNDA

Nov -05

Source: businesswire.com

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$HAREHOLDER ALERT: The M&A Class Action Firm Announces An Investigation of Sonida Senior Living, Inc. (NYSE: SNDA)

Nov -05

Source: globenewswire.com

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SNDA Stock Alert: Halper Sadeh LLC is Investigating Whether the Merger of Sonida Senior Living, Inc. is Fair to Shareholders

Nov -05

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.76%)

6. Segments

Resident

Expected Growth: 4.73%

Strong demand for senior living services, driven by an aging population and increasing life expectancy, contributes to Sonida Senior Living's 4.73% growth. Additionally, the company's strategic expansion into new markets, focus on high-quality care, and effective cost management also support this growth.

Managed Community Reimbursement

Expected Growth: 4.73%

The 4.73% growth in Managed Community Reimbursement from Sonida Senior Living, Inc. is driven by increasing demand for senior living services, expansion of managed communities, and favorable reimbursement rates. Additionally, the company's focus on providing high-quality care and services, as well as its strategic partnerships, contribute to the growth.

Management Fees

Expected Growth: 8.37%

Sonida Senior Living's 8.37% management fee growth is driven by increasing demand for senior living services, 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. Furthermore, the aging population and increasing life expectancy have led to a rise in senior living occupancy rates, resulting in higher management fees.

7. Detailed Products

Independent Living

Residential living for seniors who require minimal assistance with daily activities

Assisted Living

Personalized care and support for seniors who require assistance with daily activities

Memory Care

Specialized care and support for seniors with Alzheimer's disease or other dementias

Skilled Nursing

24/7 medical care and rehabilitation services for seniors who require intensive medical attention

Home Health

Medical and non-medical care services provided in the comfort of the senior's own home

Hospice Care

Compassionate care and support for seniors with terminal illnesses

8. Sonida Senior Living, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Sonida Senior Living, Inc. is medium due to the availability of alternative options for senior living and care services.

Bargaining Power Of Customers

The bargaining power of customers for Sonida Senior Living, Inc. is low due to the lack of negotiating power of individual customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Sonida Senior Living, Inc. is medium due to the presence of multiple suppliers for goods and services.

Threat Of New Entrants

The threat of new entrants for Sonida Senior Living, Inc. is high due to the growing demand for senior living and care services.

Intensity Of Rivalry

The intensity of rivalry for Sonida Senior Living, Inc. is high due to the presence of multiple competitors in the senior living and care services market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 111.82%
Debt Cost 5.67%
Equity Weight -11.82%
Equity Cost 13.31%
WACC 4.77%
Leverage -945.80%

11. Quality Control: Sonida Senior Living, Inc. passed 1 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

Stock-Card
DocGo

A-Score: 4.1/10

Value: 9.8

Growth: 8.3

Quality: 4.4

Yield: 0.0

Momentum: 0.0

Volatility: 2.0

1-Year Total Return ->

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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

A-Score: 3.9/10

Value: 5.8

Growth: 2.7

Quality: 2.1

Yield: 0.0

Momentum: 7.5

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

Momentum: 0.0

Volatility: 3.7

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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

1-Year Total Return ->

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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

30.79$

Current Price

30.79$

Potential

-0.00%

Expected Cash-Flows