Capital Senior Living Corp.
) have been on an uptrend since late November, aided by
strengthening market fundamentals and an improving outlook for the
U.S. economy. The stock is currently trading at a 52-week high of
$11.58, led by an earnings surprise of 40.0% in the first quarter
of 2012 and an average earnings surprise of 25.6% over the past
This healthcare services company currently retains a Zacks #1 Rank
(Strong Buy). With expected earnings growth of 14.0% in 2012 and
40.4% in 2013, Capital Senior Living promises to be a solid
Strong First Quarter
On May 2, Capital Senior Living reported strong first quarter
results with a 20.7% year-over-year growth in total revenues to
$72.2 million. The healthy top-line was primarily attributable to
incremental contribution from accretive acquisitions since the
second half of 2011.
Adjusted net income increased 16.7% year over year to 7 cents per
share, exceeding the Zacks Consensus Estimate by 2 cents. Adjusted
EBITDAR surged 25.3% year over year to $25.7 million. Adjusted cash
from facility operations (CFFO) increased 13.2% for the quarter to
$6.5 million. Average monthly rent per occupied unit spiked 6.0% to
Marginal Earnings Estimate Revision
Over the past 60 days, the Zacks Consensus Estimate for 2012
increased 3.6% to 29 cents, implying a year-over-year growth of
14.0%. For 2013, the Zacks Consensus Estimate is 40 cents,
representing a year-over-year growth of 40.4%.
Capital Senior Living's valuation looks a bit expensive on a
price-to-earnings (P/E) and price-to-sales (P/S) basis. Shares of
Capital Senior Living are currently trading at a forward P/E of
40.63x versus the peer group average of 13.48x. On a P/S basis,
Capital Senior Living is currently trading at 1.18x versus 0.84x
for the peer group average.
A healthy earnings growth prospect in the current and ensuing year
warrants the premium valuation of the company.
Chart Resonates Growth Potential
Since January 24, 2012, Capital Senior Living shares have
consistently fared better than the simple moving average for 200
days or SMA (200). The continuous uptrend in stock prices, as
mirrored in the following chart, offers an enticing upside
potential going forward. The stock has also outperformed the
S&P 500 index since May 2, 2012 with a stupendous year-to-date
return of 45.84%, compared to an S&P 500 tally of 9.16%. Volume
is fairly strong, averaging 123K daily.
Headquartered in Dallas, Texas, Capital Senior Living operates a
diverse portfolio of healthcare facilities across the U.S. Founded
in 1996, the company is one of the largest operators of residential
communities for the elderly. Its property portfolio includes
independent living, assisted living, skilled nursing, and home care
facilities in geographically concentrated regions with an aggregate
capacity of approximately 12,600 residents. The company currently
has a market cap of $320.7 million.
CAPITAL SR LIVG (CSU): Free Stock Analysis
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