SUN COMMUNITIES, INC (SUI): what the price assumes

Generated: 2026-08-08 · Exported: 2026-08-09 · Source: https://boothcheck.com/report/SUI

Headline

Field	Value
Ticker	SUI
Company	SUN COMMUNITIES, INC
Sector / Industry	Real Estate
Current price	$120.88/sh

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

Field	Value
Inversion basis	reit
Price-to-FFO	8.0x
FFO yield	12.6%

The price sits below what even a 5%/yr funds-from-operations decline would warrant; the inversion reports a bound, not a solved growth path.

Solve inputs: computed at a 9.1% cost of equity with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range

Reference	Value
vs own history	-0.55σ
cohort percentile (of 105 peers)	11
implied end-window share	0%

Valuation X-Ray

The price is supported by asset-based and relative-multiple and growth-DCF value. A value/asset-supported name, not a pure growth bet.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Family	Median price/FV	Models	Reads
Asset	0.90x	1	justifies
Earnings	1.43x	4	expensive
Relative	0.58x	3	justifies
Growth	1.03x	5	expensive

Families that justify the price: Asset, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.1%); the inversion above states its own rate.

Per-Model Detail (n=13)

Model	Family	FV	Price/FV	Applicable	Methodology
DCF Perpetual Growth	Growth	$146.19	0.83x	yes	FCF base $0.9B, growth 4% (input: historical growth), terminal g 3.8%, WACC 8.1%, 5yr projection
DCF Exit Multiple	Growth	$123.12	0.98x	yes	Exit EV/EBITDA: 32.1x / 34.1x / 36.1x (bear / base = today's held flat / bull), 5yr
Relative Valuation	Relative	—	—	no	P/E 24.24x (blended: static sector reference 35x + trailing (TTM) 8x), scenarios: 20.3x / 24.2x / 28.2x (bear / base = reference held flat / bull), EV/EBITDA 24.24x
Simple DDM	Growth	$46.47	2.60x	yes	DPS $4.27, g=0.1% (sustainable: ROE (TTM) × retention; not the terminal-growth assumption), ke=9.3%
Two-Stage DDM	Growth	$116.84	1.03x	yes	Stage 1: 13% for 5yr, Stage 2: 3.5% perpetual
Simple Excess Return	Asset	$0.32	377.73x	yes	BV/sh $53.81, ROE (TTM) 0.1%, ke 9.3% (excluded from median)
Two-Stage Excess Return	Asset	$0.16	755.47x	yes	5yr excess ROE then converge to ke=9.3% (excluded from median)
Discounted Future Market Cap	Growth	$91.24	1.32x	yes	Rev $2.3B, growth 4% (input: historical growth; tapered), Terminal P/S: 5.4x / 6.5x / 7.5x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair Value	Relative	$200.59	0.60x	yes	FFO/share $14.90, growth 13% (input: historical FFO/share growth, 10y median), PEG=304.54 (Overvalued)
Margin Trajectory	Growth	—	—	no	—
Earnings Power Value	Earnings	—	—	no	—
Residual Income	Asset	$0.11	1098.86x	yes	BV $53.81 + 5yr PV of (ROE (TTM) 0.1% − Kₑ 9.3%) × BV; BV grows 0.0%/yr (excluded from median)
Graham Number	Asset	$134.32	0.90x	yes	√(22.5 × FFO/share $14.90 × BVPS $53.81) — Graham's conservative floor
EV/EBITDA Relative	Relative	—	—	no	EBITDA $0.52B × sector EV/EBITDA 20.0x
FCF Yield	Earnings	$57.04	2.12x	yes	FCF $889.6M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF Yield	Earnings	$52.97	2.28x	yes	SBC-adj FCF $0.84B (FCF $0.89B − SBC $0.05B) capitalized at Kₑ
Ben Graham Formula	Earnings	$442.38	0.27x	yes	FFO/share $14.90 × (8.5 + 2×13.5%) × (4.4 / 5.3%)
ROIC-Justified P/B	Asset	—	—	no	—
P/Sales Sector	Relative	—	—	no	Revenue $2.34B × sector P/S 6.0x
PEG Fair Value	Relative	$300.89	0.40x	yes	FFO/share $14.90 × (PEG 1.5 × growth 13.5% (input: historical FFO/share growth, 10y median)) → PE 20.2x
Earnings Yield	Earnings	$161.08	0.75x	yes	FFO/share $14.90 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations Multiple	Relative	$209.58	0.58x	yes	FFO/share $14.90 × 14.1x P/FFO (route cohort median, n=85); FFO $1.87B (FFO incl. D&A + impairments, FY2025, companyfacts), shares 126M
Clinical Phase NPV	Growth	—	—	no	—
Merton	Asset	—	—	no	—
V5 Mechanical	—	—	—	no	—

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

Unit	Role	Valuation basis	Revenue	Reported profit	Value evidence	Status
MH (Manufactured Housing)	operating	enterprise	0.0B reported-currency	—	withheld	unresolved no unit value
RV (Recreational Vehicle)	operating	enterprise	0.0B reported-currency	—	withheld	unresolved no unit value
Marina	operating	enterprise	0.0B reported-currency	—	withheld	unresolved no unit value

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Field	Value
Funds from operations (trailing)	$1.9b
Share count CAGR (dilution)	2.0%
Burning cash	no

REIT basis: leverage is read against funds from operations (FFO), not depreciation-gutted operating income. The header's implied growth runs on ADJUSTED FFO — FFO minus recurring maintenance capex — so the header's multiple and this leverage ratio use bases that differ by that capex; neither substitutes for the other. Net debt could not be resolved from the corporate debt tags in the filings (REIT notes and mortgage debt are often tagged outside the corporate ladder), so the leverage ratio is withheld rather than rendered from incomplete tags. Interest expense is not separately reported in the cached statements, so fixed-charge coverage cannot be computed.

Bullet Takeaways

• Sun Communities owns the land under manufactured-housing and RV communities, a business where residents own the homes but not the lots, and its FY2025 10-K reports Same Property blended occupancy for MH and RV rising 40 basis points to 99.1 percent, occupancy most property types never see.
• After selling its marina platform, the company has turned into a capital-return story: a $1 billion buyback authorization announced in May 2026, $60.1 million repurchased in the first quarter, and full-year Core FFO guidance raised to $6.87 to $7.07 per share.
• The watch items are the soft edges: the filing shows RV Same Property NOI declining 1.4 percent on weak transient revenue, and cost lines the 10-K flags ("insurance premiums, real estate taxes, and utilities") are the main threat to the mid-single-digit NOI growth the guidance assumes.

Bull Case

Watch what management has done with the balance sheet over the past eighteen months, because it amounts to a controlled demolition of everything investors disliked about the old Sun Communities. The sprawling marina platform is sold; proceeds went to debt reduction and shareholders; and the 10-K states the intent plainly: "We intend to maintain our strong financial position and lower leverage profile by focusing on our core fundamentals, which are generating positive cash flows from operations, maintaining appropriate debt levels and leverage ratios, and controlling overhead costs". The follow-through is measurable: roughly $60.1 million of stock repurchased in the first quarter, then a new $1 billion buyback authorization in May 2026, effective through May 2027, against a $14.9 billion market cap. A REIT buying back its own stock in size is management telling you where it thinks the cheapest real estate is.

The remaining core is the strongest small niche in residential real estate. Manufactured-housing residents own their homes but rent the land beneath them; moving a home is expensive and disruptive, so occupancy behaves like infrastructure: the 10-K reports Same Property adjusted blended occupancy of 99.1 percent, up 40 basis points year over year, and the first quarter of 2026 showed the pricing power that comes with it, North America Same Property NOI up 6.3 percent with blended occupancy at 98.7 percent. Supply is structurally constrained because few municipalities approve new manufactured-housing communities, which the filing acknowledges from the other side when it lists "an oversupply of, or a reduced demand for, manufactured homes" as a risk that in practice rarely materializes in its markets.

The first quarter delivered Core FFO of $1.40 per share against consensus near $1.31, and management raised full-year Core FFO guidance to $6.87 to $7.07. With the price at $118.82, the market pays about 17 times the midpoint of that guided Core FFO for a landlord with 99 percent occupancy, annual-lease pricing power, mid-single-digit NOI growth, a deleveraged balance sheet, a $4.27 per-share dividend, and a billion-dollar authorization to shrink the denominator. The bull case is simply that boring, near-full, rent-raising land ownership compounds quietly while the buyback works.

Bear Case

The moat here is real, but its edges are eroding where the growth was supposed to come from. The RV side, the part of the portfolio that behaves like hospitality rather than housing, is already leaking: the FY2025 10-K reports RV Same Property NOI declining 1.4 percent, "driven by lower than anticipated real property - transient revenues". Transient RV stays are discretionary consumer spending wearing a real-estate costume, and they soften exactly when household budgets do. Meanwhile the crown-jewel MH side faces the quieter erosion the filing itself lists: "increased operating costs, including insurance premiums, real estate taxes, and utilities", cost lines that have been repricing upward across Sun Belt markets faster than annual lot-rent increases can politely absorb, plus "competition from other available MH and RV communities and alternative forms of housing (such as apartment buildings" in markets where apartment supply has surged.

The strategic bear is that Sun sold its growth engine and kept its steady state. The marina platform was the external-growth story; what remains is a portfolio whose occupancy, at 99.1 percent, has essentially nowhere to go. From full occupancy, NOI growth is rent increases minus cost inflation, full stop, and the affordability politics of raising lot rents on fixed-income homeowners put a soft ceiling on the first term just as insurance and taxes lift the second. First-quarter GAAP results printed a net loss of $8.7 million even as Core FFO beat, a reminder of how much definitional distance sits between the headline metric and the bottom line.

And the cheap-looking multiple deserves scrutiny before it is trusted. The trailing funds-from-operations base includes the divestiture year, inflated by disposal-related items, which is why backward-looking reads sit so low; on the company's own forward Core FFO guidance the price is about 17 times, a normal manufactured-housing multiple, not a distressed one. The growth-oriented lenses read the price as more than double what the divestiture-shrunk trailing trajectory supports, which is the mechanical way of saying the market is already crediting the post-sale company with a clean slate. If NOI growth fades from 6 percent toward the cost-inflation line, the re-rating case evaporates and the stock is a bond proxy with a 3.6 percent yield in a market where treasuries compete hard for that money.

Valuation

A real-estate trust is read on adjusted funds from operations, the cash the properties generate after the maintenance capex that keeps them leasable, and on that trailing basis the price looks almost implausibly low: about 8 times, below what even a 5 percent annual decline in funds from operations would warrant, and in the lower half of the REIT group. That number needs its bridge stated once: the trailing FY2025 base (FFO of $14.90 per share on the companyfacts basis) includes the marina-divestiture year with its disposal-related items, while the company's own post-sale Core FFO guidance midpoint of $6.97 puts today's $118.82 (July 10, 2026) at roughly 17 times forward Core FFO, a company-defined non-GAAP measure. The first basis says the market prices decline; the second says it prices a fair, unheroic multiple for a full-occupancy landlord. Both are true on their own bases, and the truth in between is that the post-sale Sun is neither distressed nor expensive.

The method families sort along the same seam. The asset-value and peer-multiple lenses support the price, with the cohort funds-from-operations read (a 13.5x multiple against the trailing base, cohort of 86 REITs) landing well above it. The earnings-power and growth lenses read the price as 1.5 to 2.4 times what they defend, but their inputs inherit the divestiture: trailing revenue shrank double digits because the marinas left the ledger, not because the communities weakened. The cleaner operating signals point the other way, with first-quarter Same Property NOI up 6.3 percent and occupancy at 98.7 percent.

On the balance sheet, the corporate debt could not be cleanly aggregated from the filings' tags (REIT mortgage and note structures sit outside the standard corporate ladder), so the honest statement is qualitative: the stated strategy is a "strong financial position and lower leverage profile", the marina proceeds went substantially to deleveraging, and the company funds a $4.27 per-share dividend (about a 3.6 percent yield) alongside its buyback from operating cash flow. What has to be true at today's price is modest: same-property NOI growth near the guided 4.7 percent midpoint, RV transient softness staying contained to its roughly one-seventh share of the story, and cost inflation in insurance and taxes not swallowing the rent escalators. The decisive variable is the spread between lot-rent growth and operating-cost growth, and it is printed every quarter in the same-property table.

Catalysts

The second-quarter report, due in early August on the company's cadence, gets measured against a raised bar: full-year Core FFO guidance of $6.87 to $7.07 per share (midpoint $6.97) and North America same-property NOI growth around a 4.7 percent midpoint, set after first-quarter Core FFO of $1.40 beat consensus of about $1.31 with 6.3 percent NOI growth. The internal split to watch is MH annual leases versus RV transient revenue, the line that dragged RV same-property NOI negative in fiscal 2025.

Capital deployment is the second track. The $1 billion repurchase authorization announced in May 2026 runs through May 27, 2027, following $60.1 million of buybacks in the first quarter; the pace of execution against it, and whether management supplements buybacks with acquisitions (guidance incorporates only deals completed through April 27, 2026), will define the per-share compounding rate. Any large MH portfolio acquisition would signal a pivot from shrinking the share count back to external growth.

The macro channels are the standard REIT pair: interest rates, which set both the discount on a bond-proxy income stream and the refinancing cost of the debt stack, and Sun Belt cost inflation, especially property insurance and real estate taxes, the expense lines the 10-K flags and the main threat to the NOI spread. Seasonally, the summer quarters carry the RV transient revenue, so this print and the next are the year's cleanest read on whether that softness is stabilizing.

Peer Cohorts (Per Segment, With Filing Citations)

MH (Manufactured Housing) / RV (Recreational Vehicle) / Marina (reported)

• ELS (EQUITY LIFESTYLE PROPERTIES, INC.)
• FY2025 10-K: 3- Leases Lessor Rental income derived from customers renting our Sites is recognized over the term of the respective operating lease or the length of a customer's stay. MH Sites are generally leased on an annual basis to residents who own or lease factory-built homes, including manufactured homes. Annual RV and…
• FY2025 10-K: …or other unit placed on the site, including those Northern properties that are open for the summer season. Seasonal RV and marina Sites are leased to customers generally for one to six months. Transient RV and marina Sites are leased to customers on a short-term basis. The revenue from seasonal and transient Sites is…
• UMH (UMH Properties, Inc.)
• FY2025 10-K: …communities supply these services on-site. Typically, our leases are on an annual or month-to-month basis, renewable upon the consent of both parties. In some of our states, we offer 25-year leases to purchasers of new homes that limit rent increases to 5% or CPI, whichever is greater. The community manager sells or…
• FY2025 10-K: …rules and regulations and maintenance. Manufactured homes are accepted by the public as a viable and economically attractive alternative to conventional site-built single-family housing. The affordability of the modern manufactured home makes it a very attractive housing alternative. Depending on the region of the…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

company Q1 2026 results and May 2026 announcement · company announcements, May 2026 · company FY2025 10-K; Q1 2026 results · company Q1 2026 results · company 2026 guidance · company Q1 2026 results and raised guidance, May 2026 · company announcements, May-June 2026