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Sienna Senior Living (TSE:SIA)
TSX:SIA

Sienna Senior Living (SIA) AI Stock Analysis

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Sienna Senior Living

(TSX:SIA)

66Neutral
Sienna Senior Living's overall score reflects strong revenue growth, improved profitability, and positive momentum in technical indicators. While strategic acquisitions and expansions bolster growth potential, high leverage, a lofty P/E ratio, and cash flow concerns temper the outlook. The attractive dividend yield and successful corporate events provide additional support, but operational challenges and high leverage remain key risks.
Positive Factors
Macroeconomic Trends
The company's strategy aligns well with favorable macroeconomic trends in the Canadian seniors housing market.
Retirement Segment Growth
Sienna expects significant growth in its retirement segment, with improvements in rent rates and occupancy expected to boost margins.
Negative Factors
Valuation Concerns
Valuation is seen as attractive as Sienna trades at a discount relative to its historical average multiple and a 14% discount to NAV.

Sienna Senior Living (SIA) vs. S&P 500 (SPY)

Sienna Senior Living Business Overview & Revenue Model

Company DescriptionSienna Senior Living Inc. (SIA) is a leading provider of senior living and long-term care services in Canada. The company operates in the healthcare and real estate sectors, offering a wide range of accommodations and services to meet the diverse needs of older adults. Its core offerings include independent living, assisted living, long-term care, and specialized programs for memory care. Sienna Senior Living is committed to enhancing the quality of life for its residents through personalized care and a supportive environment.
How the Company Makes MoneySienna Senior Living generates revenue primarily through the provision of senior living and long-term care services. The company's key revenue streams include resident fees from its independent living, assisted living, and long-term care facilities. These fees typically cover accommodation, meals, personal care, and various support services. Additionally, Sienna may earn income through government funding and subsidies, particularly for its long-term care operations. The company benefits from strategic partnerships with healthcare providers and suppliers to enhance service delivery and maintain operational efficiency. Factors such as demographic trends, government policies, and real estate market conditions can significantly impact Sienna's earnings.

Sienna Senior Living Financial Statement Overview

Summary
Sienna Senior Living shows a promising revenue growth and improved net profit margin. However, the company's financial health is marred by negative free cash flow and high leverage, indicating potential risk areas despite improved ROE.
Income Statement
65
Positive
Sienna Senior Living showed strong revenue growth of 13.7% from 2023 to 2024. However, the gross profit margin for 2024 appears to be incorrectly calculated as 100%, indicating a possible data discrepancy. The net profit margin improved significantly from 0.9% in 2023 to 4.3% in 2024, showing enhanced profitability. However, EBIT margin is currently zero, suggesting operational challenges.
Balance Sheet
60
Neutral
The debt-to-equity ratio is approximately 2.1, indicating high leverage which could be risky. The return on equity improved to 8% in 2024, indicating better returns for shareholders. However, the equity ratio is relatively low at 25.8%, suggesting a higher reliance on debt for asset financing.
Cash Flow
50
Neutral
The free cash flow turned negative in 2024, a concerning shift from previous positive levels, indicating potential liquidity issues. The operating cash flow to net income ratio improved, reflecting better cash generation relative to net income, but the negative free cash flow remains a concern.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
893.16M785.37M718.59M668.49M664.23M
Gross Profit
893.16M96.68M91.00M81.85M70.33M
EBIT
0.0065.77M38.04M56.83M18.41M
EBITDA
142.29M100.27M106.11M114.24M83.19M
Net Income Common Stockholders
38.40M7.04M10.67M20.65M-24.49M
Balance SheetCash, Cash Equivalents and Short-Term Investments
127.20M24.40M38.05M29.05M95.68M
Total Assets
1.86B1.70B1.68B1.61B1.68B
Total Debt
1.01B1.01B977.96M950.28M1.03B
Net Debt
885.14M982.25M939.91M921.23M936.95M
Total Liabilities
1.38B1.32B1.25B1.20B1.23B
Stockholders Equity
480.72M373.77M434.69M405.85M447.44M
Cash FlowFree Cash Flow
-172.00K62.60M48.43M56.69M49.51M
Operating Cash Flow
149.93M126.70M106.08M98.52M69.24M
Investing Cash Flow
-116.48M-74.02M-134.73M-18.05M-8.76M
Financing Cash Flow
69.35M-66.34M37.65M-147.09M14.43M

Sienna Senior Living Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price15.81
Price Trends
50DMA
15.43
Positive
100DMA
15.93
Negative
200DMA
15.39
Positive
Market Momentum
MACD
0.11
Negative
RSI
52.12
Neutral
STOCH
62.33
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:SIA, the sentiment is Neutral. The current price of 15.81 is above the 20-day moving average (MA) of 15.75, above the 50-day MA of 15.43, and above the 200-day MA of 15.39, indicating a bullish trend. The MACD of 0.11 indicates Negative momentum. The RSI at 52.12 is Neutral, neither overbought nor oversold. The STOCH value of 62.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:SIA.

Sienna Senior Living Peers Comparison

Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSEXE
81
Outperform
C$1.09B14.6570.86%3.67%12.36%123.26%
TSALC
73
Outperform
C$602.84M6.4910.92%5.19%-2.46%4.75%
TSSIA
66
Neutral
C$1.47B31.768.99%5.92%13.72%429.22%
60
Neutral
C$4.62B194.652.36%3.65%15.38%-84.98%
49
Neutral
$6.90B-0.08-53.01%2.43%24.84%-3.06%
* Healthcare Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:SIA
Sienna Senior Living
15.87
3.55
28.81%
TSE:EXE
Extendicare
13.09
6.08
86.73%
TSE:ALC
Algoma Central
14.99
0.90
6.39%
TSE:CSH.UN
Chartwell Retirement Residences
16.94
5.21
44.42%

Sienna Senior Living Earnings Call Summary

Earnings Call Date: Feb 19, 2025 | % Change Since: -0.63% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Positive
Sienna Senior Living Inc. demonstrated strong financial and operational performance with continuous NOI growth, record occupancy levels, and successful acquisitions. However, the company faces challenges in optimizing certain assets and managing inflationary expenses. Overall, the positive achievements outweigh the challenges, indicating a strong position for future growth.
Highlights
Eighth Consecutive Quarter of NOI Growth
Sienna Senior Living Inc. achieved its eighth consecutive quarter of NOI growth, with adjusted same property NOI increasing by 29% in the Long-Term Care segment and by 15.3% in the Retirement segment.
Record Occupancy Levels
The Retirement segment's same property occupancy increased by 300 basis points year-over-year to 92.9% in Q4, reaching 93.1% in January, with a target to achieve 95% stabilized occupancy in the next 12 months.
Successful Acquisitions and Expansions
Sienna announced two new acquisitions in Ottawa and Mississauga, totaling approximately $80.6 million at capitalization rates of 6.25% and 6.75%. The acquisitions are expected to be immediately accretive to AFFO per share.
Strong Financial Performance
Q4 2024 total adjusted revenues increased by 12.5% year-over-year to $246.3 million, with adjusted funds from operations increasing by 41.3%. The AFFO payout ratio improved to 77.1%.
Improved Liquidity and Debt Management
Sienna ended Q4 2024 with liquidity of $435 million and improved its debt to adjusted EBITDA to 6.4 times. The interest coverage ratio improved to 3.9 times.
Significant Development Pipeline
Sienna is on track to complete several development projects with a combined cost exceeding $300 million, expected to grow AFFO per share by about 3% once operational.
Lowlights
Challenges with Asset Optimization
Five assets in the Retirement portfolio are undergoing optimization initiatives, with current occupancy at 76% and margins at 22%, indicating room for improvement.
Inflationary Expense Increases
Despite significant revenue growth, inflationary expense increases have offset some of the financial gains in the Long-Term Care segment.
Potential Delays in Development
Some development projects face challenges in timelines and yields due to external factors such as government policies and construction costs.
Company Guidance
In the recent conference call, Sienna Senior Living Inc. provided detailed guidance for the upcoming fiscal year, highlighting key metrics. The company reported its eighth consecutive quarter of NOI growth, with adjusted same property NOI increasing by 29% in the Long-Term Care segment and by 15.3% in the Retirement segment for Q4 2024. Occupancy rates in the Retirement segment improved by 300 basis points year-over-year, reaching 92.9% in Q4 and 93.1% in January, setting a path towards a 95% stabilization target within the next 12 months. Financially, total adjusted revenues rose by 12.5% year-over-year to $246.3 million, and operating funds from operations grew by 33.1% to $29.4 million. Adjusted funds from operations increased by 41.3% to $25.1 million, with an AFFO payout ratio of 77.1%. Sienna also outlined a significant acquisition and development strategy, with nearly $300 million in acquisitions under contract and development projects costing over $300 million, expected to boost AFFO per share by about 3% once operational. The company aims for low single-digit percentage growth in Long-Term Care NOI and approximately 10% growth in the Retirement segment for 2025.

Sienna Senior Living Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Sienna Senior Living Raises $144 Million Through Share Offering
Positive
Feb 27, 2025

Sienna Senior Living has successfully closed a bought deal offering of common shares, raising approximately $144 million. The proceeds will be used to fund acquisitions of retirement and long-term care residences in Ontario and support strategic growth initiatives, positioning Sienna for future expansion in the senior living industry.

Private Placements and FinancingM&A Transactions
Sienna Senior Living Launches $125 Million Equity Offering for Strategic Acquisitions
Positive
Feb 20, 2025

Sienna Senior Living has announced a $125 million equity offering through a bought deal public equity offering led by TD Securities. The proceeds will be used to fund the acquisition of two properties, Wildpine Residence and Cawthra Gardens, and for other corporate purposes. These acquisitions are expected to be immediately accretive to Sienna’s AFFO per share and are being acquired at a significant discount to replacement cost, enhancing the company’s balance sheet flexibility and supporting its strategic growth objectives.

M&A TransactionsFinancial Disclosures
Sienna Senior Living Reports Strong Q4 Results and Announces Ontario Acquisitions
Positive
Feb 19, 2025

Sienna Senior Living Inc. reported significant financial growth in its fourth quarter of 2024, marking its eighth consecutive quarter of year-over-year adjusted same property net operating income growth. This has been driven by significant increases in both the retirement and long-term care segments, improved occupancy rates, and effective cost management strategies. The company also announced the acquisition of two properties in Ontario, valued at $81 million, which is expected to enhance its asset base and provide immediate accretive benefits to its financial metrics, further solidifying its market position and growth potential.

Dividends
Sienna Senior Living Declares February 2025 Dividend and Reinvestment Opportunity
Positive
Feb 14, 2025

Sienna Senior Living has declared a dividend of $0.078 per common share for February 2025, which translates to an annualized amount of $0.936 per share. Eligible shareholders can reinvest their dividends into additional common shares at a 3% discount through the company’s Dividend Reinvestment Plan, potentially increasing their investment value. This announcement underscores Sienna’s commitment to providing value to its shareholders while maintaining a strong market position within the senior living industry.

Sienna Senior Living Declares January 2025 Dividend
Jan 15, 2025

Sienna Senior Living announced a monthly dividend of $0.078 per common share for January 2025, translating to an annualized dividend of $0.936 per share. The dividend will be paid on February 14, 2025, to shareholders recorded by January 31, 2025, and is eligible for Canadian tax purposes. Sienna offers a Dividend Reinvestment Plan allowing shareholders to reinvest dividends in additional shares at a 3% discount, potentially enhancing shareholder value while maintaining flexibility for those preferring cash dividends.

Sienna Senior Living to Announce Q4 2024 Financial Results
Jan 8, 2025

Sienna Senior Living Inc. has announced that it will release its fourth quarter results for 2024 on February 19, 2025, after the market closes. The following day, a conference call hosted by the company’s President and CEO, Nitin Jain, and CFO and EVP of Investments, David Hung, will take place to discuss these results with the investment community. This announcement could provide insights into the company’s financial performance and strategic direction, potentially impacting its positioning in the senior living industry and influencing stakeholder perceptions.

Sienna Senior Living Announces December Dividend
Dec 13, 2024

Sienna Senior Living has declared a December dividend of $0.078 per common share, amounting to an annualized $0.936 per share, payable on January 15, 2025. The company offers a Dividend Reinvestment Plan, allowing shareholders to reinvest their dividends at a 3% discount. Sienna provides a variety of senior living options and employs approximately 12,500 people dedicated to enhancing the quality of life for seniors.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.