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CareTrust REIT (CTRE)
NYSE:CTRE
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CareTrust REIT
(NYSE:CTRE)
Rating:80Outperform
Price Target:
$33.00
▲( 15.38% Upside)
Positive Factors
Financial Performance
The acquisition is expected to increase CTRE's normalized FFO by 5.9%, indicating a positive financial impact.
Portfolio Diversification
The acquisition of Care REIT in the U.K. is seen as a well-timed move to diversify CTRE's tenancy amid potential U.S. Medicaid cuts.
Strategic Expansion
The strategic expansion in the UK is viewed positively.
Negative Factors
Acquisition Uncertainty
The acquisition is contingent on a shareholder vote and could be terminated if not completed by July 9, 2025, creating uncertainty.
Guidance Expectations
Raised guidance figures are below Street and BMO expectations.
Leverage Concerns
Leverage is expected to rise to 1.7x (midpoint) from the current 0.5x.
CareTrust REIT (CTRE) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.48B
Dividend Yield4.25%
Average Volume (3M)1.46M
Price to Earnings (P/E)31.2
Beta (1Y)0.24
Revenue Growth43.27%
EPS Growth80.97%
CountryUS
Employees21
SectorReal Estate
Sector Strength64
IndustryREIT - Healthcare Facilities
Share Statistics
EPS (TTM)0.35
Shares Outstanding191,689,000
10 Day Avg. Volume1,508,957
30 Day Avg. Volume1,462,230
Financial Highlights & Ratios
PEG Ratio2.18
Price to Book (P/B)1.87
Price to Sales (P/S)0.00
P/FCF Ratio21.58
Enterprise Value/Market Cap1.02
Enterprise Value/Revenue6.13
Enterprise Value/Gross Profit23.88
Enterprise Value/Ebitda6.57
Forecast
1Y Price Target
$31.43Price Target Upside9.90% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
CareTrust REIT Business Overview & Revenue Model
Company DescriptionCareTrust REIT, Inc. (CTRE) is a real estate investment trust specializing in the ownership, acquisition, and leasing of healthcare-related properties, primarily focused on skilled nursing facilities, assisted living facilities, and independent living facilities. The company operates across the United States, providing capital and operational support to healthcare operators, thereby facilitating the delivery of healthcare services to the aging population.
How the Company Makes MoneyCareTrust REIT generates revenue primarily through leasing its portfolio of healthcare-related properties to third-party operators. The company enters into long-term, triple-net lease agreements, where tenants are responsible for property-related expenses such as maintenance, insurance, and taxes. This structure provides CareTrust REIT with a steady stream of rental income. Additionally, the company may engage in strategic acquisitions and sales of properties to optimize its portfolio and enhance returns. Partnerships with healthcare operators are crucial, as they help maintain high occupancy rates and ensure reliable rental payments, contributing to the company's financial performance.
CareTrust REIT Financial Statement Overview
Summary
CareTrust REIT exhibits strong financial performance with excellent profitability metrics, robust revenue growth, and efficient cash flow management. The income statement shows healthy profit margins and consistent growth, while the balance sheet reflects financial stability despite rising debt levels. The cash flow situation is positive with substantial operating cash flow and effective cash management.Income Statement
CareTrust REIT demonstrates strong income statement metrics with a solid gross profit margin and consistent revenue growth. The TTM data highlights a gross profit margin of 94.62% and a net profit margin of 65.78%, indicating excellent profitability. Revenue has grown from $187.51 million in 2022 to $246.41 million in TTM 2025, reflecting a robust growth rate. The company also maintains healthy EBIT and EBITDA margins, at 55.15% and 101.80%, respectively. Overall, the income statement reflects a strong financial performance with stable and growing profitability.85
Very Positive
Balance Sheet
The balance sheet of CareTrust REIT reveals financial stability with a manageable debt-to-equity ratio of 0.28 in TTM 2025. The equity ratio stands at 75.36%, indicating a strong equity position relative to total assets. Return on equity is impressive at 5.54%, showcasing efficient utilization of equity to generate profits. However, the increasing total debt from $545.59 million in 2020 to $822.15 million in TTM 2025 presents a potential risk if not managed carefully. Overall, the balance sheet reflects a solid financial position with a strong equity base but a rising debt trend that warrants monitoring.78
Positive
Cash Flow
CareTrust REIT shows a positive cash flow scenario with a substantial operating cash flow of $266.81 million in TTM 2025, indicating strong cash generation capability. The free cash flow growth rate from 2024 to TTM 2025 is 8.75%, reflecting a healthy increase. The operating cash flow to net income ratio is 1.65, and the free cash flow to net income ratio is 1.58, both indicating efficient cash flow management relative to earnings. The cash flow analysis highlights robust cash generation and efficient handling of operating activities, contributing to overall financial strength.82
Very Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 246.41M | 228.26M | 217.77M | 187.51M | 190.19M | 175.69M | Gross Profit |
| 233.14M | 214.71M | 208.18M | 178.13M | 186.62M | 170.98M | EBIT |
| 135.91M | 124.06M | 186.37M | 112.44M | 106.56M | 104.56M | EBITDA |
| 250.82M | 211.54M | 145.80M | 162.81M | 161.96M | 157.38M | Net Income Common Stockholders |
| 162.14M | 125.08M | 53.73M | 42.87M | 48.30M | 57.21M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 26.51M | 213.82M | 294.45M | 13.18M | 19.89M | 18.92M | Total Assets |
| 3.88B | 3.44B | 2.08B | 1.62B | 1.64B | 1.50B | Total Debt |
| 822.15M | 396.93M | 595.60M | 719.50M | 673.40M | 545.59M | Net Debt |
| 795.64M | 183.10M | 301.15M | 706.32M | 653.50M | 526.67M | Total Liabilities |
| 936.27M | 507.63M | 666.12M | 771.41M | 725.09M | 589.42M | Stockholders Equity |
| 2.93B | 2.91B | 1.42B | 849.37M | 915.76M | 914.14M |
| Cash Flow | Free Cash Flow | ||||
| 256.88M | 236.20M | 143.79M | 137.12M | 150.86M | 137.44M | Operating Cash Flow |
| 266.81M | 244.25M | 154.77M | 144.41M | 156.87M | 145.74M | Investing Cash Flow |
| -1.43B | -1.51B | -267.81M | -127.40M | -192.63M | -41.58M | Financing Cash Flow |
| 1.34B | 1.19B | 394.32M | -23.73M | 36.74M | -105.56M |
CareTrust REIT Technical Analysis
Neutral
28.60
Price Trends
28.49
Positive
27.29
Positive
28.17
Positive
Market Momentum
0.14
Positive
49.56
Neutral
42.10
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CTRE, the sentiment is Neutral. The current price of 28.6 is below the 20-day moving average (MA) of 28.86, above the 50-day MA of 28.49, and above the 200-day MA of 28.17, indicating a neutral trend. The MACD of 0.14 indicates Positive momentum. The RSI at 49.56 is Neutral, neither overbought nor oversold. The STOCH value of 42.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CTRE.
CareTrust REIT Risk Analysis
CareTrust REIT disclosed 40 risk factors in its most recent earnings report. CareTrust REIT 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 face potential adverse consequences of bankruptcy, insolvency or financial deterioration of our tenants or borrowers. Q4, 2024
CareTrust REIT Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $5.48B | 31.16 | 7.02% | 4.25% | 43.27% | 80.97% | |
76 Outperform | $3.38B | 23.00 | 10.56% | 4.99% | 7.44% | 4.23% | |
76 Outperform | $4.07B | 28.93 | 5.15% | 7.02% | 7.81% | 179.16% | |
72 Outperform | $5.54B | ― | -1.93% | 2.94% | 11.66% | ― | |
60 Neutral | $2.76B | 10.33 | 0.49% | 8508.28% | 5.95% | -17.56% | |
49 Neutral | $5.04B | ― | -6.83% | 8.65% | -7.26% | 18.45% | |
44 Neutral | $2.74B | ― | -28.86% | 8.55% | 19.56% | -12.73% |
* Real Estate Sector Average
Performance Comparison
CTRE
CareTrust REIT
28.60
4.47
18.52%
NHI
National Health Investors
72.47
10.81
17.53%
SBRA
Sabra Healthcare REIT
17.44
4.14
31.13%
MPW
Medical Properties
4.58
-0.15
-3.17%
HR
Healthcare Realty Trust
14.35
-0.23
-1.58%
AHR
American Healthcare REIT, Inc.
34.33
20.87
155.05%
CareTrust REIT Earnings Call Summary
Earnings Call Date:May 01, 2025
(Q1-2025)
| % Change Since: -1.62%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
The earnings call was predominantly positive, highlighting a significant strategic acquisition, robust financial performance, and strong investment pipeline. However, there are some concerns about potential Medicaid cuts and the performance of specific tenants which add a cautious note.Q1-2025 Updates
Positive Updates
Strategic Acquisition of Care REIT
CareTrust REIT announced the acquisition of the UK-based Care REIT for approximately $856 million. This marks CareTrust's first M&A activity and entry into the UK market, diversifying operator concentration, geography, payer sources, and asset classes.
Record Investment Pipeline
CareTrust has a robust investment pipeline amounting to approximately $500 million, predominantly consisting of real estate acquisitions in the U.S. and not including the UK acquisition of Care REIT.
Significant Financial Performance Improvement
Normalized FFO increased by 67.4% over the prior year quarter to $77.8 million, and normalized FAD increased by 66% to $80.8 million. On a per share basis, normalized FFO increased by $0.07 or 20% to $0.42 per share, and normalized FAD increased by $0.06 or 16.2% to $0.43 per share.
Successful Financing and Low Leverage
CareTrust secured commitments for a $500 million five-year term loan and raised roughly $100 million via the ATM, maintaining a low net debt to normalized EBITDA ratio of 0.5 times and net debt to enterprise value at 2.9%.
Negative Updates
Concerns Over Medicaid Cuts
There is ongoing uncertainty regarding potential Medicaid cuts, with no definitive outcomes yet, although there remains bipartisan support for Medicaid.
Challenges with Tenant PACs
Specific performance details about tenant PACs could not be provided, indicating potential concerns or uncertainties regarding their financial disclosures.
Company Guidance
During the CareTrust REIT first quarter 2025 earnings call, several key metrics were discussed regarding the company's strategic initiatives and financial performance. Dave Sedgwick, President and CEO, highlighted the acquisition of Care REIT for approximately $856 million, which is expected to generate $68.6 million in annual rent and diversify the company's operations geographically and by asset class. James Callister, Chief Investment Officer, reported on U.S. investments totaling $82 million with a yield of approximately 10%, and mentioned a strong investment pipeline of $500 million focused primarily on skilled nursing facilities. Financially, Bill Wagner, CFO, noted a 67.4% increase in normalized FFO to $77.8 million and a 66% increase in normalized FAD to $80.8 million for the quarter. Guidance was raised, with normalized FFO per share expected between $1.69 and $1.73 and normalized FAD per share between $1.73 and $1.77 for the year. Wagner also discussed a $500 million term loan to support the acquisition and pipeline. The company's net debt to normalized EBITDA ratio is expected to remain below 2.5 times post-transaction, indicating strong liquidity and financial stability.CareTrust REIT Corporate Events
M&A Transactions
CareTrust REIT Completes Acquisition of Care REIT plc
Positive
May 14, 2025
On May 8, 2025, CareTrust REIT, Inc. completed the acquisition of Care REIT plc through a court-sanctioned scheme of arrangement. The acquisition, valued at approximately $840.5 million, was funded through cash and borrowing under an existing credit facility, enhancing CareTrust’s portfolio in the healthcare real estate sector.
The most recent analyst rating on (CTRE) stock is a Buy with a $35.00 price target. To see the full list of analyst forecasts on CareTrust REIT stock, see the CTRE Stock Forecast page.
M&A TransactionsDividendsBusiness Operations and StrategyFinancial Disclosures
CareTrust REIT Q1 2025 Results and Acquisition News
Positive
May 1, 2025
CareTrust REIT reported its first quarter 2025 results, highlighting a net income of $65.8 million and a planned acquisition of Care REIT plc, which was approved by Care REIT’s shareholders. The acquisition is expected to enhance CareTrust’s portfolio diversification and growth potential. The company also increased its quarterly dividend and announced plans to upsize its credit facility, reflecting a strong financial position and commitment to shareholder returns.
M&A Transactions
CareTrust REIT Announces Acquisition of Care REIT plc
Positive
Mar 11, 2025
On March 11, 2025, CareTrust REIT, Inc. announced its intention to acquire Care REIT plc through its subsidiary CR United Bidco Limited for approximately $817 million. The acquisition, subject to court and shareholder approval, aims to capitalize on the fragmented UK care home market, driven by an aging population and limited new inventory. The acquisition has been unanimously approved by both companies’ boards and is expected to close in the second quarter of 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.