We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why Buying Brookdale (BKD) Stock is a Prudent Move Now
Read MoreHide Full Article
Brookdale Senior Living Inc. (BKD - Free Report) is well poised to grow on the back of revenue per available unit (RevPAR) growth and a rising occupancy level trend. Also, with the growing senior population, demand for BKD’s services is expected to increase in the coming days.
Headquartered in Brentwood, TN, Brookdale is a leading operator of senior living communities. It has a market cap of $754.7 million.
Outperformer & Zacks Rank
Over the past six months, shares of Brookdale have surged 48%, outperforming the industry‘s 3.5% rise and the Zacks Medical Sector’s 2.4% fall. Courtesy of solid prospects, this Zacks Rank #2 (Buy) stock is worth adding to your portfolio at the moment.
Let’s delve deeper.
Brookdale reached 19 straight months of year-over-year increases in weighted average occupancy in May. The first-quarter weighted average occupancy level rose 290 basis points (bps) to 76.3% and its May weighted average occupancy grew 200 bps from the year-ago level to 76.6%. The ongoing growth in occupancy levels is likely to lead to higher resident fee revenues. Its first-quarter 2023 resident fee revenues jumped 12% year over year to $713.4 million.
The company’s growth opportunity is attractive at the moment. From the pandemic low of 69.6% in first-quarter 2021, its quarterly weighted average occupancy has come a long way. Yet, it has more room for growth. If the company can reach its pre-pandemic level, which was 84.5% in the fourth quarter of 2019, it will drive more than $300 million of incremental revenues.
BKD’s RevPAR growth for the first quarter was 12.9% year over year. For the second quarter, the company expects RevPAR growth to be within 11.5-12%. This sends a strong message of a potential sustaining growth trend.
Considering the diminishing staffing challenges, labor costs are likely to normalize, boosting profits. Brookdale expects second-quarter adjusted EBITDA to be in the range of $72-$77 million, signaling a jump from the year-ago level of $50.7 million, which will improve the bottom line.
The Zacks Consensus Estimate for BKD’s second-quarter earnings indicates a 55.6% year-over-year improvement from a loss of 45 cents per share. Furthermore, the consensus estimate for its current-year earnings signals a 37.6% improvement from a loss of $1.25 per share. Brookdale beat on earnings in two of the last four quarters and missed twice, the average surprise being 13.4%.
Brookdale Senior Living Inc. Price and EPS Surprise
There are a few factors that investors should keep an eye on. For example, BKD’s balance sheet weakness can be a cause for concern. Its long-term debt to capital of 88.1% is much higher than the industry average of 72.1%. Its long-term debt, less current portion at the first-quarter end was at around $3.8 billion and the current portion was at $87.7 million. Being on the negative side of free cash flow will not help it to pay those debts. Nevertheless, we believe that a systematic and strategic plan of action will drive its growth in the long term.
The Zacks Consensus Estimate for Humana’s 2023 earnings indicates a 12% year-over-year increase. Humana beat earnings estimates in all the last four quarters, with the average being 8.9%.
The Zacks Consensus Estimate for Apyx Medical’s 2023 earnings indicates a 38.8% improvement from the year-ago reported figure. The consensus estimate for APYX’s 2023 revenues indicates 37.3% year-over-year growth.
The Zacks Consensus Estimate for Boston Scientific’s 2023 bottom line suggests a 14% increase from the prior-year levels. BSX has witnessed 12 upward estimate revisions in the past 60 days against none in the opposite direction.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Here's Why Buying Brookdale (BKD) Stock is a Prudent Move Now
Brookdale Senior Living Inc. (BKD - Free Report) is well poised to grow on the back of revenue per available unit (RevPAR) growth and a rising occupancy level trend. Also, with the growing senior population, demand for BKD’s services is expected to increase in the coming days.
Headquartered in Brentwood, TN, Brookdale is a leading operator of senior living communities. It has a market cap of $754.7 million.
Outperformer & Zacks Rank
Over the past six months, shares of Brookdale have surged 48%, outperforming the industry‘s 3.5% rise and the Zacks Medical Sector’s 2.4% fall. Courtesy of solid prospects, this Zacks Rank #2 (Buy) stock is worth adding to your portfolio at the moment.
Let’s delve deeper.
Brookdale reached 19 straight months of year-over-year increases in weighted average occupancy in May. The first-quarter weighted average occupancy level rose 290 basis points (bps) to 76.3% and its May weighted average occupancy grew 200 bps from the year-ago level to 76.6%. The ongoing growth in occupancy levels is likely to lead to higher resident fee revenues. Its first-quarter 2023 resident fee revenues jumped 12% year over year to $713.4 million.
The company’s growth opportunity is attractive at the moment. From the pandemic low of 69.6% in first-quarter 2021, its quarterly weighted average occupancy has come a long way. Yet, it has more room for growth. If the company can reach its pre-pandemic level, which was 84.5% in the fourth quarter of 2019, it will drive more than $300 million of incremental revenues.
BKD’s RevPAR growth for the first quarter was 12.9% year over year. For the second quarter, the company expects RevPAR growth to be within 11.5-12%. This sends a strong message of a potential sustaining growth trend.
Considering the diminishing staffing challenges, labor costs are likely to normalize, boosting profits. Brookdale expects second-quarter adjusted EBITDA to be in the range of $72-$77 million, signaling a jump from the year-ago level of $50.7 million, which will improve the bottom line.
The Zacks Consensus Estimate for BKD’s second-quarter earnings indicates a 55.6% year-over-year improvement from a loss of 45 cents per share. Furthermore, the consensus estimate for its current-year earnings signals a 37.6% improvement from a loss of $1.25 per share. Brookdale beat on earnings in two of the last four quarters and missed twice, the average surprise being 13.4%.
Brookdale Senior Living Inc. Price and EPS Surprise
Brookdale Senior Living Inc. price-eps-surprise | Brookdale Senior Living Inc. Quote
Key Risk
There are a few factors that investors should keep an eye on. For example, BKD’s balance sheet weakness can be a cause for concern. Its long-term debt to capital of 88.1% is much higher than the industry average of 72.1%. Its long-term debt, less current portion at the first-quarter end was at around $3.8 billion and the current portion was at $87.7 million. Being on the negative side of free cash flow will not help it to pay those debts. Nevertheless, we believe that a systematic and strategic plan of action will drive its growth in the long term.
Other Top-Ranked Players
Some other top-ranked stocks in the broader medical space are Humana Inc. (HUM - Free Report) , Apyx Medical Corporation (APYX - Free Report) and Boston Scientific Corporation (BSX - Free Report) , each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Humana’s 2023 earnings indicates a 12% year-over-year increase. Humana beat earnings estimates in all the last four quarters, with the average being 8.9%.
The Zacks Consensus Estimate for Apyx Medical’s 2023 earnings indicates a 38.8% improvement from the year-ago reported figure. The consensus estimate for APYX’s 2023 revenues indicates 37.3% year-over-year growth.
The Zacks Consensus Estimate for Boston Scientific’s 2023 bottom line suggests a 14% increase from the prior-year levels. BSX has witnessed 12 upward estimate revisions in the past 60 days against none in the opposite direction.