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Community Healthcare Trust (CHCT)
NYSE:CHCT
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Community Healthcare
(NYSE:CHCT)
Rating:64Neutral
Price Target:
$17.00
▲(3.16%Upside)
Positive Factors
Dividend Increase
The Board of Directors approved a dividend increase, continuing its trend of increases since its IPO.
Financial Stability
The company has no debt maturities until 2028, which strengthens its financial stability.
Property Portfolio Expansion
CHCT acquired a property for $9.7 million with a lease extending through 2040, showing growth in their property portfolio.
Negative Factors
Earnings Decline
The estimates imply a 16.9% year-over-year normalized FFO per share decline in 2024, marking the company’s first year-over-year decrease since 2017.
Tenant Payment Uncertainty
The company did not give any update regarding the uncertainty around collecting lease and interest payments from a tenant operating a geriatric inpatient behavioral hospital announced in 2Q.
Community Healthcare (CHCT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$467.01M
Dividend Yield11.7%
Average Volume (3M)192.86K
Price to Earnings (P/E)―
Beta (1Y)0.62
Revenue Growth1.33%
EPS Growth-149.80%
CountryUS
Employees36
SectorReal Estate
Sector Strength69
IndustryREIT - Healthcare Facilities
Share Statistics
EPS (TTM)0.03
Shares Outstanding28,337,778
10 Day Avg. Volume196,067
30 Day Avg. Volume192,862
Financial Highlights & Ratios
PEG Ratio2.22
Price to Book (P/B)0.99
Price to Sales (P/S)0.00
P/FCF Ratio13.28
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$20.75Price Target Upside25.91% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
Community Healthcare Business Overview & Revenue Model
Company DescriptionCommunity Healthcare Trust Incorporated (CHCT) is a real estate investment trust (REIT) that specializes in owning and managing properties leased to healthcare service providers. The company primarily focuses on acquiring medical office buildings, outpatient treatment centers, and other healthcare-related facilities across the United States. CHCT's mission is to support healthcare providers by offering flexible and efficient real estate solutions that facilitate the delivery of quality healthcare services.
How the Company Makes MoneyCommunity Healthcare Trust Incorporated makes money primarily through leasing its properties to healthcare service providers. The company generates revenue from rental income paid by tenants who operate medical facilities within CHCT's property portfolio. As a REIT, CHCT benefits from relatively stable and predictable income streams, as healthcare facilities typically have long-term leases. Additionally, the company's growth strategy includes acquiring new properties and increasing occupancy rates, further enhancing its revenue potential. Partnerships with healthcare providers and strategic property acquisitions are significant factors contributing to CHCT's earnings.
Community Healthcare Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q1-2025)
| % Change Since: 4.30%|
Next Earnings Date:Aug 05, 2025
Earnings Call Sentiment Neutral
The earnings call provided a mixed view of the company's performance. While revenue and acquisitions showed positive growth, challenges with a significant tenant and increased expenses posed concerns. The company's dividend increase and property sale were positives, but the flat occupancy and lease term, along with slight decreases in FFO, balanced the sentiment.Q1-2025 Updates
Positive Updates
Revenue Growth
Total revenue increased from $29.3 million in Q1 2024 to $30.1 million in Q1 2025, representing a 2.5% annual growth.
New Acquisitions
Acquired a behavioral residential treatment facility for approximately $9.7 million with an anticipated return of 9.5% and signed agreements for seven more properties expected to bring returns between 9.1% and 9.75%.
Dividend Increase
Declared a dividend increase to $0.47 per common share, marking an annualized dividend of $1.88 per share, continuing a streak of quarterly dividend increases since IPO.
Successful Property Sale
Sold a building in Ohio for net proceeds of approximately $600,000, resulting in a gain on the property sale.
Negative Updates
Geriatric Psychiatric Hospital Operator Challenges
The geriatric psychiatric hospital operator, a tenant in six properties, is evaluating strategic alternatives including potential sales, and there's uncertainty about future rent and interest payments totaling nearly $6 million annually.
Flat Occupancy and Lease Term
Both occupancy and weighted average remaining lease term remained flat at 90.9% and 6.7 years, respectively, indicating no improvement quarter-over-quarter.
Increased Operating Expenses
Property operating expenses increased by approximately $600,000 quarter-over-quarter to $6.1 million due to higher seasonal utility and snowplow expenses.
FFO and AFFO Marginal Changes
FFO decreased slightly by $77,000 quarter-over-quarter, remaining at $12.7 million, while AFFO increased by $100,000 but remained the same on a diluted common share basis at $0.55.
Company Guidance
During the Community Healthcare Trust's 2025 first quarter earnings call, notable guidance was provided regarding occupancy rates, acquisitions, and financial performance metrics. The company's occupancy remained stable at 90.9% with a weighted average remaining lease term of 6.7 years. In the first quarter, they acquired a behavioral residential treatment facility for approximately $9.7 million, with an anticipated tenant improvement cost of $1.4 million, expecting a 9.5% annual return. Additionally, CHCT has definitive agreements to acquire seven properties, with an aggregate expected investment of $169.5 million, projecting returns between 9.1% and 9.75%. Financially, total revenue increased by 2.5% year-over-year to $30.1 million, while property operating expenses rose by $600,000 to $6.1 million due to higher seasonal costs. The company declared a dividend increase to $0.47 per share, maintaining a trend of quarterly dividend raises since their IPO.Community Healthcare Financial Statement Overview
Summary
Community Healthcare exhibits solid revenue growth and operational efficiency, though recent profitability challenges require attention. A debt-free balance sheet underscores financial resilience, while cash flows remain healthy but with areas for improvement in operational cash generation.Income Statement
The income statement shows a steady revenue growth trajectory with a recent dip in net income leading to a negative net profit margin. Gross and EBITDA margins remain robust, indicating operational efficiency. However, the sharp decrease in net income is a concern, impacting overall profitability.72
Positive
Balance Sheet
The balance sheet reveals a strong equity position with zero debt, highlighting financial stability. The equity ratio is healthy, ensuring lower financial leverage and risk. However, the reduction in stockholders' equity over the past year needs monitoring.85
Very Positive
Cash Flow
The cash flow statement shows strong free cash flow generation with a positive operating cash flow to net income ratio, despite net income turning negative. The free cash flow growth is commendable, but reduced operating cash flow compared to the previous year is a concern.78
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 116.18M | 115.79M | 112.84M | 97.68M | 90.58M | 75.68M | Gross Profit |
| 71.33M | 92.95M | 92.13M | 81.04M | 75.42M | 62.07M | EBIT |
| 30.33M | 21.62M | 25.10M | 33.93M | 32.96M | 28.09M | EBITDA |
| 85.04M | 62.89M | 65.54M | 66.27M | 63.37M | 53.60M | Net Income Common Stockholders |
| -5.91M | -3.18M | 7.71M | 22.02M | 22.49M | 19.08M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 2.27M | 4.38M | 3.49M | 11.23M | 2.35M | 2.48M | Total Assets |
| 985.11M | 992.56M | 945.41M | 876.42M | 754.23M | 668.40M | Total Debt |
| 0.00 | 489.98M | 407.31M | 353.00M | 265.63M | 213.17M | Net Debt |
| 497.76M | 485.60M | 403.82M | 341.76M | 263.27M | 210.68M | Total Liabilities |
| 523.79M | 516.60M | 432.16M | 379.61M | 292.12M | 238.49M | Stockholders Equity |
| 461.32M | 475.96M | 513.26M | 496.81M | 462.11M | 429.92M |
| Cash Flow | Free Cash Flow | ||||
| 36.43M | 34.24M | 42.40M | 49.90M | 49.13M | 41.38M | Operating Cash Flow |
| 60.65M | 58.88M | 61.38M | 60.28M | 56.35M | 48.37M | Investing Cash Flow |
| -66.71M | -92.66M | -113.67M | -113.77M | -104.43M | -125.06M | Financing Cash Flow |
| 3.39M | 33.53M | 44.86M | 62.69M | 48.05M | 77.56M |
Community Healthcare Technical Analysis
Neutral
16.48
Price Trends
16.46
Positive
17.42
Negative
17.10
Negative
Market Momentum
-0.02
Negative
52.68
Neutral
35.75
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CHCT, the sentiment is Neutral. The current price of 16.48 is above the 20-day moving average (MA) of 16.34, above the 50-day MA of 16.46, and below the 200-day MA of 17.10, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 52.68 is Neutral, neither overbought nor oversold. The STOCH value of 35.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CHCT.
Community Healthcare Risk Analysis
Community Healthcare disclosed 84 risk factors in its most recent earnings report. Community Healthcare reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 1 New Risks
1.
We may have difficulty finding suitable replacement tenants in the event of non-renewal of our leases or a tenant default. Q4, 2024
Community Healthcare Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $1.35B | 38.40 | 2.39% | 4.92% | -1.88% | 46.76% | |
66 Neutral | $526.22M | 28.11 | 10.15% | 7.71% | 0.95% | 15.07% | |
64 Neutral | $467.01M | ― | -1.67% | 11.70% | 1.33% | -149.80% | |
62 Neutral | $781.65M | ― | -13.96% | 1.23% | 5.33% | 10.68% | |
60 Neutral | $2.76B | 10.59 | 0.51% | 8507.90% | 5.51% | -19.44% | |
57 Neutral | $461.37M | 203.19 | 1.45% | 13.55% | -1.66% | -86.24% | |
53 Neutral | $123.21M | 16.80 | 36.40% | 5.45% | 22.41% | 37.88% |
* Real Estate Sector Average
Performance Comparison
CHCT
Community Healthcare
16.48
-3.86
-18.98%
DHC
Diversified Healthcare Trust
3.22
0.96
42.48%
GMRE
Global Medical REIT
6.30
-1.91
-23.26%
UHT
Universal Health Realty Income
39.06
4.88
14.28%
STRW
Strawberry Fields REIT Inc
10.26
-0.17
-1.63%
SILA
Sila Realty Trust, Inc.
24.94
7.12
39.96%
Community Healthcare Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Community Healthcare Appoints New Senior VP for Asset Management
Neutral
May 6, 2025
On May 1, 2025, Community Healthcare Trust Incorporated announced the termination of Timothy L. Meyer, Executive Vice President – Asset Management, effective May 31, 2025, with severance compensation and full vesting of equity awards. The company expects to record a charge of approximately $5.8 million for the quarter ended June 30, 2025, related to this separation. On May 6, 2025, the company announced the appointment of Mark E. Kearns as the new Senior Vice President – Asset Management, effective May 12, 2025. Mr. Kearns brings over 25 years of healthcare real estate experience, which is expected to enhance the company’s operational momentum and focus on portfolio leasing, management, and investment.
DividendsFinancial Disclosures
Community Healthcare Reports Q1 2025 Net Income
Neutral
Apr 29, 2025
Community Healthcare Trust reported a net income of $1.6 million for the first quarter of 2025, with funds from operations totaling $0.47 per diluted share. The company acquired a property for $9.7 million and disposed of another for $0.6 million. It has seven properties under purchase agreements, expecting to close between 2025 and 2027. The company declared a quarterly dividend of $0.47 per share, payable on May 23, 2025.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.