The average target price of SUNS is 13 and suggests 16% upside potential. Usually, this means a BUY recommendation among investment firms, or a recommendation to increase one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 15.0. This translates into 36% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 10.8. This is equivalent to 3% downside potential in the worst case. 

Founded in 2017, Sunrise REIT has served the Canadian rental community's growing need for new property and real estate projects through impressive integrity and a commitment to delivering results with the highest quality standards. Our professional team works closely with both investors and landowners in order to come up with results that exceed expectations.

Sunrise Realty Trust, Inc.

Real Estate

The company pays dividends on rare occasions. There have only been a few years with dividend payments in the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has been outstanding and can be rated excellent compared to its peers. 

SUNS reported revenue of USD 3mn in the last 12 months, down 80% from FY21. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 79% from FY21 to USD 0.15. Market expects EPS to reach USD 1.13 in FY22.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). It has underperformed this peer group by 22ppts over six months and grown 1ppts faster in the past month. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is neutral.

The company has reported very strong EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 60.5% in the last 12 months, a decline from 64.6% in FY23. 

Historically, SUNS has reported very strong net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 60.5%, down from 64.6% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 3.0% in the last 12 months, a decrease from 3.9% in FY23. The market analysts predict that RoA will be 1.2% in FY24, though below its peers in this period. 

In the last 12 months, the return on capital employed (RoCE) declined to 4.7%, above the peers. The consensus estimate for FY24 for RoCE is 3.2%, however, this time below its peers. 

Sunrise Realty Trust, Inc. reported a return on equity (RoE) of 5.5% in the last 12 months, down from 9.4% in FY23. The market consensus projects an RoE of 3.2% in FY24, again behind its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 0.5 in the past several years. This ratio implies a weak shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

SUNS has average trading liquidity. The average private investor can sell his common position in the stock in a single trading day. Liquidity is usually stable and remains favourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a very small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to excessive margin volatility, inadequate interest coverage, and poor cash flow generation. We note resilient historical revenue growth and robust profitability, among the positive credit factors. 

In highly turbulent market conditions, SUNS is volatile. In other words, the stock will fall much more than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be large. 

In normal market circumstances, SUNS is moderately volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will move slightly wider than the index. The stock's losses on its worst days (less than 1-5% of the time) will range from limited to mild. We would also like to highlight the mild intraday volatility of the instrument. 

Considering past and projected metrics, the stock is moderately 'expensive' compared to its peers. Specifically, the stock is fairly valued on P/E, neutral on EV/EBITD. 

Sunrise Realty Trust, Inc.

$ 10.96

4

Sunrise Realty Trust, Inc.

$ 10.96

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

$ 10.96

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