Value
5.1/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 6.3 |
| EV/EBITDA | 2.3 |
| p ocf | 7.5 |
| Analyst target | 5.0 |
- ▸P/OCF: 13.1x (FFO proxy — REITs gated off P/E)
SBRA · Why this verdict
Why Sabra Health Care REIT (SBRA) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score6.0/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Sabra Health Care REIT combines high-quality fundamentals — 127% free cash flow conversion, a Piotroski score of 8/9, and 22% revenue growth — with a long-term moving average that is still rising, but weak near-term price momentum and a high short interest of 16% create near-term headwinds.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Revenue grew 22% year over year, placing Sabra among the faster-growing healthcare REITs, likely reflecting occupancy recovery in skilled nursing and senior housing facilities post-pandemic. Growth breakdown | Revenue growth remains above 10% year over year in the next reported annual period. | →Stable |
| CounterHealthcare REIT revenue growth driven by occupancy recovery is a one-time catch-up effect; once occupancy normalizes, growth rates are likely to revert toward low single digits. | ||
Free cash flow equals 127% of net income with a Piotroski financial health score of 8 out of 9, indicating the business generates more cash than its earnings suggest and has a highly disciplined balance sheet. Quality breakdown | Free cash flow as a percentage of net income remains above 100% in at least 3 of the next 4 quarters. | →Stable |
| CounterHigh free cash flow conversion in healthcare REITs can reflect low capital expenditure rather than operational strength; if tenant buildings require significant renovation capital, the ratio may deteriorate quickly. | ||
Price momentum is very weak at 2.3 out of 10, with falling on-balance volume confirming institutional distribution, and the stock has fallen below its 200-day moving average even as the longer-term slope of that average remains positive at +1.8% over 30 days. Momentum breakdown | Price recovers above the 200-day moving average and on-balance volume reverses from distribution to accumulation within 90 days. | →Stable |
| CounterThe rising long-term moving average trend suggests the current selloff is a pullback within an intact uptrend, and the 23% analyst upside target may reflect a recovery that is already underway. | ||
Short interest stands at 16% of float with implied volatility at 96%, creating a combination of active bearish positioning and elevated option market uncertainty that typically precedes either a sharp recovery (short squeeze) or continued price weakness. Risk breakdown | Short interest falls below 8% over 12 months as the company's fundamentals attract long-side investors who force short covering. | →Stable |
| Counter16% short interest in a healthcare REIT may reflect specific concerns about tenant credit quality or the company's dividend sustainability; a high yield with a warning flag in the data suggests the bear case has real structural support. | ||
Revenue grew 22% year over year, placing Sabra among the faster-growing healthcare REITs, likely reflecting occupancy recovery in skilled nursing and senior housing facilities post-pandemic.
→StableGrowth breakdown
- Expectation
- Revenue growth remains above 10% year over year in the next reported annual period.
CounterHealthcare REIT revenue growth driven by occupancy recovery is a one-time catch-up effect; once occupancy normalizes, growth rates are likely to revert toward low single digits.
Free cash flow equals 127% of net income with a Piotroski financial health score of 8 out of 9, indicating the business generates more cash than its earnings suggest and has a highly disciplined balance sheet.
→StableQuality breakdown
- Expectation
- Free cash flow as a percentage of net income remains above 100% in at least 3 of the next 4 quarters.
CounterHigh free cash flow conversion in healthcare REITs can reflect low capital expenditure rather than operational strength; if tenant buildings require significant renovation capital, the ratio may deteriorate quickly.
Price momentum is very weak at 2.3 out of 10, with falling on-balance volume confirming institutional distribution, and the stock has fallen below its 200-day moving average even as the longer-term slope of that average remains positive at +1.8% over 30 days.
→StableMomentum breakdown
- Expectation
- Price recovers above the 200-day moving average and on-balance volume reverses from distribution to accumulation within 90 days.
CounterThe rising long-term moving average trend suggests the current selloff is a pullback within an intact uptrend, and the 23% analyst upside target may reflect a recovery that is already underway.
Short interest stands at 16% of float with implied volatility at 96%, creating a combination of active bearish positioning and elevated option market uncertainty that typically precedes either a sharp recovery (short squeeze) or continued price weakness.
→StableRisk breakdown
- Expectation
- Short interest falls below 8% over 12 months as the company's fundamentals attract long-side investors who force short covering.
Counter16% short interest in a healthcare REIT may reflect specific concerns about tenant credit quality or the company's dividend sustainability; a high yield with a warning flag in the data suggests the bear case has real structural support.
Per-dimension breakdown
Quality
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 1.9 |
| ROA | 2.1 |
| Gross margin | 8.7 |
| Op margin | 10.0 |
| Net margin | 9.6 |
| Current ratio | 8.9 |
| FCF quality | 9.2 |
| Moat | 6.4 |
| Piotroski F | 8.9 |
- ▸Strong margins: 19%
- ▸Excellent cash conversion: 127% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
6.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 7.9 |
| EPS growth | 5.6 |
- ▸Strong growth: 22% YoY
Momentum
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 8.1 |
| OBV | 10.0 |
| MA position | 7.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 2.5 |
| Analyst rating | 7.2 |
| Price target | 7.2 |
- ▸LLM news sentiment: -0.50 (n=1)
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
6.1/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.6 |
| quality rank | 6.2 |
| growth rank | 7.7 |
Technical
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 3.2 |
| support resistance | 4.9 |
| 52w position | 8.0 |
Risk (lower is worse)
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 2.0 |
| days to cover | 0.0 |
| volatility | 5.4 |
| put call | 7.8 |
| implied vol | 6.6 |
| beta | 9.2 |
| debt equity | 5.2 |
| news risk | 6.0 |
- ▸High short interest: 16%
Catalyst
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 7.4 |
| dividend safety | 3.5 |
| news activity | 5.0 |
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more. | News modifier -1 (HOLD_IF_HOLDING → SELL_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD=-1Passed (7)
- MOMENTUM:6.0>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:39d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.1<1.5@spot
Warning (0)
none
Reward-to-Risk
0.10
Upside
+0.9%
Downside
8.2%
Sizing output
AVOID
SetupUNKNOWN — No clear chart pattern; technical signals are mixed
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — MCap $4.8B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:6.0>=5.5. Top dim: Quality at 7.3; weakest: Insider at 5.0. No conviction either direction.
The strongest dimensions are Quality at 7.3, Growth at 6.8, and Peer rank at 6.1; the weakest are Insider at 5.0, Value at 5.1, and Risk (lower is worse) at 5.3. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of 0.10 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Free cash flow equals 127% of net income with a Piotroski financial health score of 8 out of 9, indicating the business generates more cash than its earnings suggest and has a highly disciplined balance sheet.
Trip ifFree cash flow as a percentage of net income falls below 80%, more than 47 percentage points below the current 127% level.
- P2Revenue grew 22% year over year, placing Sabra among the faster-growing healthcare REITs, likely reflecting occupancy recovery in skilled nursing and senior housing facilities post-pandemic.
Trip ifRevenue growth falls below 5% year over year, dropping more than 17 percentage points from the current 22% rate.
- P3Price momentum is very weak at 2.3 out of 10, with falling on-balance volume confirming institutional distribution, and the stock has fallen below its 200-day moving average even as the longer-term slope of that average remains positive at +1.8% over 30 days.
Trip ifMomentum score drops below 2.0 or price falls more than 10% below the 200-day moving average.
- P4Short interest stands at 16% of float with implied volatility at 96%, creating a combination of active bearish positioning and elevated option market uncertainty that typically precedes either a sharp recovery (short squeeze) or continued price weakness.
Trip ifShort interest rises above 20% of float, indicating bears have added to positions rather than reducing them.