What happened
Shares of Brookdale Senior Living (BKD) were up by 39.6% for the week as of early Friday morning, according to data provided by S&P Global Market Intelligence. The company, which owns 673 retirement homes across 41 states, closed at $2.86 last week, then climbed as high as $4.27 a share on Wednesday. The stock rose after the company announced preliminary first-quarter earnings results.
So what
The healthcare company isn't scheduled to release first-quarter earnings results until May 8, but on Monday, it sent out a preliminary report that showed the company expected year-over-year revenue per available room (RevPAR) growth of 12.9%, and added that it expected operational income, revenue, and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to be higher than earlier estimates. The company also said it expected a quarterly occupancy rate of 76.3%, which while down sequentially, would be up 290 basis points, year over year.
Now what
The stock is down more than 43% over the past 12 months, but is up more than 53% so far this year and has come a long way from its 52-week low on March 24. Investors are encouraged Brookdale may be turning a corner, with the company reporting improved occupancy numbers for 17 consecutive quarters. Its revenue climbed last year, showing the company may be on its way to returning to pre-pandemic revenue levels. Unfortunately, the company lost $238.43 million last year, compared to a $99.29 million loss in 2021, partly due to increased labor costs. The high numbers of deaths in retirement homes during the COVID-19 pandemic have led more seniors to consider aging in place. However, for many seniors with health difficulties, that's not realistic. The growth of the senior population means the company should benefit from long-term tailwinds.
