Value
4.7/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 5.8 |
| EV/EBITDA | 0.9 |
| p ocf | 6.4 |
| Analyst target | 5.0 |
- ▸P/OCF: 17.3x (FFO proxy — REITs gated off P/E)
SUI · Why this verdict
Why Sun Communities (SUI) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictBUY WAIT
Overall score5.8/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Sun Communities has beaten earnings estimates in 3 of the last 4 quarters with an average surprise of 54% and sits at the top of its industry for margins and growth, but trades within 3% of analyst targets and has a notable gap between reported earnings and free cash flow generation.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Sun Communities beat earnings in 3 of the last 4 quarters with an average surprise of 54%, including a 168% beat in February 2026 and 52% beat in October 2025, suggesting analysts consistently underestimate the company's quarterly earnings power. Earnings | The company beats earnings estimates in at least 3 of the next 4 quarters, sustaining the current beat pattern with average positive surprises above 20%. | →Stable |
| CounterThe most recent quarter missed by 26%, and large beats in prior quarters may have been driven by non-recurring items; analysts may already be adjusting estimates upward, making future beats harder. | ||
Sun Communities earns 60% net margins, is classified as an industry growth leader, and ranks in the top tier for margins among residential REITs, indicating a high-quality portfolio of manufactured home and RV communities with strong pricing power. Peer-rank breakdown | Net margins remain above 50% over the next 12 months, confirming the current level is not temporarily elevated. | →Stable |
| CounterA 60% net margin in a REIT often reflects depreciation and amortization accounting rather than economic earnings; the cash flow picture, where FCF is only 38% of net income, tells a more constrained story. | ||
Free cash flow is only 38% of net income, flagged as a red flag in the quality assessment, meaning the company is generating substantially less cash than its income statement suggests, which constrains actual dividend coverage and capital reinvestment capacity. Quality breakdown | Free cash flow as a percentage of net income improves to above 60% within 12 months, narrowing the gap between reported earnings and cash generation. | →Stable |
| CounterREITs by definition have heavy real property asset bases requiring reinvestment; a FCF-to-earnings ratio well below 100% is structurally expected in the sector, and funds from operations is a more relevant metric than GAAP FCF. | ||
The stock is trading at $124.41, only 2.7% below the analyst consensus target of $127.80, meaning the market has already priced in nearly all of the near-term fundamental improvement that analysts expect. Targets | Analyst consensus price target rises above $140, more than 12% above the current price of $124.41, reflecting upward estimate revisions driven by continued earnings beats. | →Stable |
| CounterResidential REIT stocks can trade above analyst targets for extended periods when interest rate expectations improve; the 3-quarter beat streak may drive analyst upgrades rather than a price pullback. | ||
Sun Communities beat earnings in 3 of the last 4 quarters with an average surprise of 54%, including a 168% beat in February 2026 and 52% beat in October 2025, suggesting analysts consistently underestimate the company's quarterly earnings power.
→StableEarnings
- Expectation
- The company beats earnings estimates in at least 3 of the next 4 quarters, sustaining the current beat pattern with average positive surprises above 20%.
CounterThe most recent quarter missed by 26%, and large beats in prior quarters may have been driven by non-recurring items; analysts may already be adjusting estimates upward, making future beats harder.
Sun Communities earns 60% net margins, is classified as an industry growth leader, and ranks in the top tier for margins among residential REITs, indicating a high-quality portfolio of manufactured home and RV communities with strong pricing power.
→StablePeer-rank breakdown
- Expectation
- Net margins remain above 50% over the next 12 months, confirming the current level is not temporarily elevated.
CounterA 60% net margin in a REIT often reflects depreciation and amortization accounting rather than economic earnings; the cash flow picture, where FCF is only 38% of net income, tells a more constrained story.
Free cash flow is only 38% of net income, flagged as a red flag in the quality assessment, meaning the company is generating substantially less cash than its income statement suggests, which constrains actual dividend coverage and capital reinvestment capacity.
→StableQuality breakdown
- Expectation
- Free cash flow as a percentage of net income improves to above 60% within 12 months, narrowing the gap between reported earnings and cash generation.
CounterREITs by definition have heavy real property asset bases requiring reinvestment; a FCF-to-earnings ratio well below 100% is structurally expected in the sector, and funds from operations is a more relevant metric than GAAP FCF.
The stock is trading at $124.41, only 2.7% below the analyst consensus target of $127.80, meaning the market has already priced in nearly all of the near-term fundamental improvement that analysts expect.
→StableTargets
- Expectation
- Analyst consensus price target rises above $140, more than 12% above the current price of $124.41, reflecting upward estimate revisions driven by continued earnings beats.
CounterResidential REIT stocks can trade above analyst targets for extended periods when interest rate expectations improve; the 3-quarter beat streak may drive analyst upgrades rather than a price pullback.
Per-dimension breakdown
Quality
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.1 |
| ROA | 1.5 |
| Gross margin | 6.6 |
| Op margin | 5.4 |
| Net margin | 10.0 |
| Current ratio | 8.5 |
| FCF quality | 3.0 |
| Moat | 6.5 |
| Piotroski F | 8.9 |
- ▸Strong margins: 60%
- ▸Earnings quality RED FLAG: 38% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
4.6/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 4.6 |
Momentum
7.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 9.7 |
| OBV | 10.0 |
| MA position | 7.0 |
| Volume | 7.9 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA (recent, shallow — too early to call)
Sentiment
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.5 |
| Price target | 7.1 |
| erm sentiment | 5.0 |
Insider
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Modest insider selling — $5,958,000 (0.038% of mkt cap)
- ▸Institutions accumulating
Peer rank
6.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.3 |
| quality rank | 4.7 |
| growth rank | 7.6 |
- ▸Best-in-class margins
- ▸Conservative debt levels
Technical
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.5 |
| support resistance | 4.3 |
| 52w position | 8.0 |
Risk (lower is worse)
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.1 |
| days to cover | 8.2 |
| volatility | 7.7 |
| put call | 0.0 |
| implied vol | 6.9 |
| beta | 8.2 |
| debt equity | 7.2 |
- ▸Elevated put/call: 2.14
Catalyst
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 4.0 |
- ▸Strong earnings: 3B/1M
- ▸Earnings in 1 days
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Earnings in 1 day. Wait until post-earnings.
Engine technical detail
verdict_path:
L3:NEWS_BLOCK|ENTRY_STICKY:PRIOR_STILL_VIABLEPassed (5)
- MOMENTUM:7.8>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- ASYMMETRY:0.7<1.5@spot
- 8K_CRITICAL:4.01,4.01
- EARNINGS_PROXIMITY:1d<=7d
Warning (1)
- DEATH_CROSS:momentum=7.8>=5.0 recovering
Reward-to-Risk
0.73
Upside
+3.7%
Downside
5.0%
Sizing output
STARTER
SetupRecovery — Death cross but MACD improving, RSI 49
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
A recent news event triggered an L3 news-block on the verdict path. Trigger: Earnings in 1 day. Wait until post-earnings. The 10-dimension scores remain Momentum at 7.8 (strongest), but ASYMMETRY:0.7<1.5@spot also fails — the news block is the proximate trigger, not the sole driver.
The strongest dimensions are Momentum at 7.8, Sentiment at 6.7, and Peer rank at 6.6; the weakest are Growth at 4.6, Value at 4.7, and Technical at 4.9. The V9 engine flagged 3 failed gates with 1 warning, producing an asymmetric reward-to-risk of 0.73 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Strong Earnings Beat Large Surprises
Trip ifEPS surprise falls below 0% in at least 3 of the next 4 quarters, reversing the current strong beat pattern.
- P2Best In Class Reit Margins Growth
Trip ifNet margin falls below 40%, declining more than 20 percentage points from the current 60% level.
- P3Fcf Quality Gap
Trip ifFree cash flow as a percentage of net income falls below 20%, worsening more than 18 percentage points from the current 38%.
- P4Limited Upside At Analyst Target
Trip ifPrice drops below $112, more than 10% below the current $124.41, suggesting the market is revising the fundamental outlook lower.