MODEL VERDICT
Sunstone Hotel Investors, Inc. (SHO)
Relative Valuation•Peer multiples, Monte Carlo simulation & quality-adjusted fair value
Popular:
Composite score derived from valuation, quality, and risk factors
Quantitative model thresholds · For educational and research purposes only
Each row records the model's monthly assessment. High Conviction = the model detected notable undervaluation vs peers. Neutral = no notable divergence was found. The return column shows the actual price change over 90 days for reference. This is a quantitative observation log — not investment advice.
| Date | Assessment | Score | Price | Status | 90d Fwd Return |
|---|---|---|---|---|---|
| May 1, 2026 | NEUTRAL | 0.23 | $9.89 | CURRENT | — |
| Apr 24, 2026 | NEUTRAL | 0.23 | $9.64 | CURRENT | — |
| Apr 17, 2026 | NEUTRAL | 0.23 | $9.65 | CURRENT | — |
| Apr 16, 2026 | NEUTRAL | 0.23 | $9.57 | CURRENT | — |
| Apr 10, 2026 | NEUTRAL | 0.26 | $9.55 | CURRENT | — |
Historical model observations for research purposes only. Past quantitative patterns do not predict future results. Not a recommendation to buy, sell, or hold any security.
| Methodology | Fair Value | vs Current | Weight | Quality | Status |
|---|---|---|---|---|---|
| Price / FFO 9 REIT peers | $8.32 | -15.9% | 30% | A | REIT Primary |
| EV/EBITDA 9 industry peers | $12.96 | +31.0% | 15% | A- | Peer Data |
| Dividend Yield 6 industry peers | $3.73 | -62.3% | 12% | B | Supplementary |
| Price / Book 9 industry peers | $10.76 | +8.8% | 8% | B | Model Driven |
| Industry Median P/E 6 industry peers | $1.00 | -89.9% | 5% | A | Peer Data |
| Forward P/E 6 analyst estimates | $1.76 | -82.2% | 5% | A- | Analyst Est. |
| EV To Revenue 9 industry peers | $18.56 | +87.7% | 3% | B | Data |
| Price / Sales 9 industry peers | $9.37 | -5.3% | 2% | B | Model Driven |
| Weighted Output Blended model output | $8.88 | -10.2% | 100% | 79 | SLIGHTLY OVERVALUED |
| EPS Growth ↓ | P/E Multiple → | 207× | 227× | 247× (Current) | 267× | 287× |
|---|---|---|---|---|---|
| Bear Case (4%) | $9 | $9 | $10 | $11 | $12 |
| Conservative (7%) | $9 | $10 | $11 | $11 | $12 |
| Base Case (10.0%) | $9 | $10 | $11 | $12 | $13 |
| Bull Case (14%) | $9 | $10 | $11 | $12 | $13 |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 74.52 | 50.86 | 11.54 | 223.50 | 78.44 |
| EV/EBIT | 26.43 | 22.67 | 10.04 | 47.07 | 14.71 |
| EV/EBITDA | 21.24 | 13.89 | 2.95 | 70.56 | 24.60 |
| P/FCF | 23.14 | 14.08 | 10.80 | 54.23 | 18.37 |
| P/FFO | 9.98 | 10.27 | 2.87 | 15.57 | 4.75 |
| P/TBV | 1.08 | 1.14 | 0.89 | 1.20 | 0.11 |
| P/AFFO | 17.52 | 24.14 | 2.87 | 25.55 | 12.70 |
| P/B Ratio | 1.08 | 1.13 | 0.89 | 1.20 | 0.11 |
| Div Yield | 0.03 | 0.02 | 0.01 | 0.06 | 0.02 |
| P/S Ratio | 3.70 | 2.65 | 1.81 | 9.13 | 2.61 |
Based on our peer multiples analysis with 23 valuation metrics, the model estimates SHO's fair value at $8.88 vs the current price of $9.89, implying -10.2% downside potential. Model verdict: Slightly Overvalued. Confidence: 79/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $8.88 is calculated using four lenses: industry median multiples (40%), historical multiples (30%), forward estimates (20%), and quality-adjusted multiples (10%). Monte Carlo simulation (10,000 iterations) gives a range of $7.38 (P10) to $12.31 (P90), with a median of $9.43.
SHO's current P/E of 247.3x compares to the industry median of 25.1x (6 peers in the group). This represents a +886.1% premium to the industry. The historical average P/E is 74.5x over 6 years. Signal: High Premium.
28 analysts cover SHO with a consensus rating of Hold. The consensus price target is $10.50 (range: $10.00 — $11.00), implying +6.2% upside from the current price. Grade breakdown: Strong Buy (0), Buy (8), Hold (14), Sell (6), Strong Sell (0).
The model confidence score is 79/100, based on: data completeness (26), peer quality (25), historical depth (20), earnings stability (4), and model agreement (4). Cyclicality penalty: -0 points. The model shows strong agreement across inputs.
The model flags several key risks: (1) Multiple compression: SHO trades at the 8750th percentile of its historical P/E range. A reversion to median (74.5×) would imply significant downside. (2) Macro/regulatory risks are not captured in this model but remain material.
Peak earnings risk refers to the possibility that SHO's current profitability is above its sustainable long-term trend. The model detects a margin Z-score of -0.8σ, meaning margins are 0.8 standard deviations below their historical average. If margins revert to the 6-year mean (8.2%), the model estimates fair value drops by 380.0% to approximately $10. This isn't a prediction — it's a scenario analysis.
No. This dashboard is a quantitative research tool for educational and informational purposes only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any security. The operator of this platform is not a registered investment advisor (RIA), broker-dealer, or financial planner. All model outputs, fair value estimates, signals, and scenarios are the result of automated quantitative computations and should not be construed as professional financial guidance. You should consult a qualified, licensed financial advisor before making any investment decisions. Past model performance is not indicative of future results.