SABRA HEALTH CARE REIT INC (NASDAQ:SBRA) reported financial results for the fourth quarter of 2025 that exceeded analyst expectations on key profitability metrics, while revenue came in above forecasts. The healthcare-focused real estate investment trust also provided initial guidance for 2026 that projects continued growth.
Earnings and Revenue Performance
The company’s fourth-quarter performance demonstrated strength in its core funds from operations, a critical metric for REITs. Sabra reported normalized funds from operations (FFO) of $0.36 per diluted share and normalized adjusted funds from operations (AFFO) of $0.38 per share.
- Normalized AFFO per share: Reported $0.38, significantly above the analyst consensus estimate of $0.1763.
- Total Revenue: Reported $211.9 million, surpassing the analyst estimate of approximately $188.4 million.
The outperformance was driven by robust growth in the company’s managed senior housing portfolio. Same-property cash net operating income (NOI) for managed senior housing increased 12.6% year-over-year in the fourth quarter.
Market Reaction and Price Action
Following the earnings release, Sabra’s stock experienced a decline in after-market trading. This movement suggests investors may be weighing the strong quarterly beat against the company’s forward-looking guidance and broader market conditions. It is important to note that short-term price action can be influenced by numerous factors beyond the headline earnings numbers, including profit-taking, guidance interpretation, and sector sentiment.
Recent stock performance leading into the report had been positive:
- The stock gained approximately 5.1% over the past month.
- It was up about 5.6% over the past week.
2026 Guidance and Investment Pipeline
Management introduced formal earnings guidance for the full year 2026, projecting mid-single-digit growth in key per-share metrics. The outlook is based on continued operational strength across its portfolio.
2026 Guidance (per diluted share):
- Net Income: $0.60 - $0.64
- FFO / Normalized FFO: $1.49 - $1.53
- AFFO / Normalized AFFO: $1.55 - $1.59
At the midpoint, this Normalized AFFO guidance of $1.57 represents a 5.4% increase over the 2025 result. The guidance assumes:
- Low-single-digit Cash NOI growth for the triple-net lease portfolio.
- Average full-year Cash NOI growth for the same-store senior housing managed portfolio in the “low to mid-teens.”
CEO Rick Matros cited a “robust” investment pipeline, noting the company has been awarded an additional $240 million in primarily managed senior housing investments with an estimated initial cash yield of approximately 8.0%. Sabra expects to exceed its 2025 investment total of roughly $450 million.
Portfolio and Operational Highlights
The press release outlined several key operational and financial highlights for the quarter:
- Strong Rent Coverage: EBITDARM coverage ratios remained healthy across segments:
- Skilled Nursing/Transitional Care: 2.38x
- Senior Housing - Leased: 1.52x
- Behavioral Health & Specialty: 3.99x
- Capital Recycling: The company acquired four managed senior housing properties for $150.5 million and disposed of seven skilled nursing facilities for $51.0 million, continuing its strategic shift toward the senior housing segment.
- Solid Balance Sheet: As of December 31, 2025, Sabra reported total liquidity of approximately $1.2 billion and a net debt to adjusted EBITDA ratio of 5.00x.
- Dividend: The board declared a quarterly cash dividend of $0.30 per share, payable in February 2026.
Conclusion
Sabra Health Care REIT delivered a strong finish to 2025, beating earnings and revenue estimates with particular strength in its growing managed senior housing operations. The company’s initial 2026 guidance points to a continuation of this steady, mid-single-digit growth trajectory, supported by an active acquisition pipeline. The after-market stock dip presents a contrast to the positive operational results, highlighting the complex factors that influence short-term market sentiment. Investors will likely focus on the execution of the 2026 investment plan and the sustained performance of the senior housing portfolio in the coming quarters.
For a detailed look at Sabra’s historical earnings and future analyst estimates, you can review the data here.
Disclaimer: This article is for informational purposes only and does not constitute investment advice, an endorsement, or a recommendation to buy, sell, or hold any security. Investors should conduct their own research and consult with a qualified financial advisor before making any investment decisions.
