Here's What Brookdale's Occupancy Growth Story Tells Us

Brookdale Senior Living Inc. BKD recently announced that its February 2025 weighted average occupancy grew 140 basis points (bps) from the year-ago level to 79.3%, thanks to favorable move-in and move-out levels. Its January 2025 weighted average occupancy grew 120 bps year over year to 79.2%. This indicates a positive start for 2025, maintaining its recent trend.

The weighted average occupancy for 2024 increased 140 bps year over year to 78.6%. Its fourth-quarter figure was 79.4%, which was higher than the 2025 first quarter-to-date level of 79.2%.

Importance of Growing Occupancy

This uptick in February highlights stronger operational performance and increased demand compared to the prior year's metrics. This positive trend is expected to persist, driven by the projected growth in the senior population. If the company manages to restore its occupancy rate to the pre-pandemic level of 84.5%, it is projected to generate an additional $190 million in revenues. This highlights the significant financial impact of higher occupancy rates.

The company is expected to have witnessed 40 straight months of year-over-year increases in weighted average occupancy, which is contributing to higher resident fee revenues.

In 2024, resident fee revenues increased 4% year over year to $3 billion, while RevPAR (revenue per available unit) and Adjusted EBITDA grew 6.1% and 15.1% year over year, respectively. However, rising facility operating expenses, elevated general and administrative costs and declining interest income offset the positives from higher occupancy.

Per BKD’s guidance, 2025 RevPAR is expected to grow 4.75-5.75% year over year, and adjusted EBITDA is projected to be in the $430-$445 million range compared with $386 million in 2024. The increases in RevPAR and occupancy will likely contribute positively to its results.

2025 Estimates for BKD

The Zacks Consensus Estimate for the 2025 bottom line is pegged at a loss of 56 cents per share, which witnessed one upward movement in the past month against no downward revisions. The estimate signals a 37.1% year-over-year improvement. Further, the consensus mark for its 2025 revenues indicates 4.5% growth from a year ago.

BKD’s Price Performance

Shares of Brookdale Senior Living have gained 6% in the past month, compared with the 0.9% increase of the industry.

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Zacks Rank & Other Stocks to Consider

BKD currently carries a Zacks Rank #2 (Buy). Some other top-ranked and promising stocks in the broader Medical sector are Pediatrix Medical Group, Inc. MD, The Ensign Group, Inc. ENSG and Addus HomeCare Corporation ADUS. While Pediatrix Medical currently sports a Zacks Rank #1 (Strong Buy), Ensign and Addus HomeCare carry a Zacks Rank #2 each. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Pediatrix Medical’s current-year earnings increased 3 cents in the past week. MD beat earnings estimates in each of the trailing four quarters, with an average surprise of 19.4%. The consensus mark for its current-year revenues is pegged at $1.9 billion.

The Zacks Consensus Estimate for Ensign’s current-year earnings indicates 13.5% year-over-year growth. ENSG beat earnings estimates in each of the trailing four quarters, with an average surprise of 1.5%. The consensus mark for revenues implies a 14.3% increase from the year-ago period.

The Zacks Consensus Estimate for Addus HomeCare’s current-year earnings signals a 13.5% increase from the year-ago reported figure. ADUS beat earnings estimates in three of the trailing four quarters and met once, with an average surprise of 5.8%. The consensus mark for its current-year revenues is pegged at $1.4 billion, which indicates 21.7% year-over-year growth.

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This article originally published on Zacks Investment Research (zacks.com).

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