Sunstone Hotel Investors (SHO) Exceeds Expectations for Q4 FFO and Revenue

Sunstone Hotel Investors (SHO) Exceeds Quarterly FFO and Revenue Expectations

Sunstone Hotel Investors (SHO) reported quarterly funds from operations (FFO) of $0.20 per share, surpassing the Zacks Consensus Estimate of $0.18 per share. This result also marks an increase from the $0.16 per share FFO recorded in the same quarter last year. The reported figures exclude one-time items.

The company delivered a positive FFO surprise of 9.35% for the quarter. In the previous quarter, SHO was anticipated to post FFO of $0.15 per share but achieved $0.17, resulting in a 13.33% surprise. Over the past four quarters, Sunstone Hotel Investors has consistently outperformed consensus FFO estimates.

For the quarter ending December 2025, Sunstone Hotel generated revenues of $236.97 million, exceeding the consensus estimate by 4.29% and improving from $214.77 million a year earlier. The company has topped revenue expectations in three of the last four quarters.

The direction of the stock’s short-term price action will likely depend on management’s insights shared during the earnings call, as well as future FFO projections.

Since the start of the year, Sunstone Hotel shares have climbed approximately 8.1%, outpacing the S&P 500’s 0.9% gain.

What Lies Ahead for Sunstone Hotel?

Although Sunstone Hotel has outperformed the broader market so far this year, investors are now considering the company’s next steps.

One key indicator for future performance is the company’s FFO outlook, which includes both current consensus estimates for upcoming quarters and recent changes to those estimates.

Studies have shown a strong link between short-term stock price movements and trends in estimate revisions. Investors can monitor these changes themselves or use tools like the Zacks Rank, which has a proven record of leveraging estimate revisions for stock selection.

Before this earnings announcement, estimate revisions for Sunstone Hotel were trending negatively. While the latest results may influence future revisions, the current Zacks Rank for SHO is #5 (Strong Sell), suggesting the stock may lag the market in the near term. For a list of Zacks #1 Rank (Strong Buy) stocks, click here.

It remains to be seen how estimates for the next quarters and the current fiscal year will evolve. Presently, consensus projects FFO of $0.24 per share on $234.95 million in revenue for the next quarter, and $0.91 per share on $973.38 million in revenue for the full year.

Investors should also consider the broader industry outlook, as it can significantly impact individual stock performance. The Zacks Industry Rank places the REIT and Equity Trust - Other sector in the bottom 39% of over 250 industries. Historically, the top half of Zacks-ranked industries outperform the bottom half by more than two to one.

Another company in the same sector, One Liberty Properties (OLP), has yet to release its results for the quarter ending December 2025.

OLP is expected to report quarterly earnings of $0.47 per share, reflecting a 6% decline from the prior year. The consensus estimate for OLP’s earnings per share has remained steady over the past month.

Revenue for One Liberty Properties is projected at $24.27 million, representing a 1.7% increase year-over-year.

Is Sunstone Hotel Investors, Inc. (SHO) a Good Investment?

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