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Brookdale (BKD) May 2023 Occupancy Rises: Better Days Ahead?

Brookdale Senior Living Inc. BKD recently announced that its May weighted average occupancy climbed 200 basis points (bps) from the year-ago level to 76.6%. This also indicates a 40 bps jump from the April level. The company has witnessed a favorable start this year, with the first-quarter weighted average occupancy level jumping 290 bps to 76.3%.

In the quarter-to-date period, average monthly move-in and move-out volumes climbed 3.5% and 8.8%, respectively, from the average of the first quarter. At the first-quarter end, it had the capacity to serve more than 60,000 residents in 41 states.

BKD has witnessed 19 straight months of year-over-year increases in weighted average occupancy. This highlights the company’s ongoing improvement in occupancy levels, which is expected to lead to higher resident fee revenues. The momentum is likely to continue in the coming days and buoy its results.

Brookdale Senior Living has a massive revenue opportunity ahead. Its quarterly weighted average occupancy improved significantly from the pandemic low of 69.6% in first-quarter 2021. Currently, the company is trying to reach its pre-pandemic level, which was 84.5% in the fourth quarter of 2019. Reaching that milestone will likely drive more than $300 million of incremental revenues, it expects.

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BKD’s first-quarter 2023 resident fee revenues witnessed 12% year-over-year growth to $713.4 million. Its RevPAR growth for the first quarter was 12.9% year over year, which boosted the top line. For the second quarter, the company expects RevPAR growth to be within 11.5-12%. It expects adjusted EBITDA to be in the range of $72-$77 million.

The Zacks Consensus Estimate for second-quarter 2023 bottom line is pegged at a loss of 20 cents per share. Nevertheless, the estimate indicates an improvement of 55.6% from the year-ago loss of 45 cents per share.

Price Performance

Brookdale Senior Living shares have gained 49.6% in the past six months compared with the industry’s rise of 5.5%.

Zacks Investment Research
Zacks Investment Research


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Zacks Rank & Other Stocks to Consider

The company currently carries a Zacks Rank #2 (Buy). Investors interested in the broader medical space may look at other top-ranked players like Medpace Holdings, Inc. MEDP, GeneDx Holdings Corp. WGS and Establishment Labs Holdings Inc. ESTA, all carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Medpace’s 2023 earnings is pegged at $8.11 per share, indicating an 11.4% improvement from the year-ago level. Also, the consensus estimate for MEDP’s revenues in 2023 suggests a 20.9% year-over-year rise.

The consensus mark for GeneDx’s 2023 earnings indicates 89% year-over-year growth. The Zacks Consensus Estimate for WGS’ revenues in 2023 is pegged at $205 million.

The consensus mark for Establishment Labs’ 2023 earnings has improved 4.5% in the past 30 days. Furthermore, the consensus estimate for ESTA’s revenues in 2023 suggests 27.6% year-over-year growth.

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Brookdale Senior Living Inc. (BKD) : Free Stock Analysis Report

Medpace Holdings, Inc. (MEDP) : Free Stock Analysis Report

Establishment Labs Holdings Inc. (ESTA) : Free Stock Analysis Report

GeneDx Holdings Corp. (WGS) : Free Stock Analysis Report

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Zacks Investment Research