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CareTrust REIT (CTRE)
NYSE:CTRE
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CareTrust REIT
(NYSE:CTRE)
81Outperform
Positive Factors
Earnings Growth
The acquisition of Care REIT diversifies CTRE's portfolio and strengthens earnings growth by expanding into the UK and reducing US Medicaid exposure.
Financial Performance
CTRE expects the acquisition to be accretive by 5.9% to normalized funds from operations.
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.
Financial Guidance
Raised guidance figures are below Street and BMO expectations.
Leverage Impact
Leverage is expected to rise to 1.7x (midpoint) from the current 0.5x.
CareTrust REIT (CTRE) vs. S&P 500 (SPY)
Market Cap
$5.49B
Dividend Yield4.12%
Average Volume (3M)1.71M
Price to Earnings (P/E)36.4
Beta (1Y)0.24
Revenue Growth36.06%
EPS Growth61.55%
CountryUS
Employees21
SectorReal Estate
Sector Strength83
IndustryREIT - Healthcare Facilities
Share Statistics
EPS (TTM)0.78
Shares Outstanding187,661,900
10 Day Avg. Volume1,349,567
30 Day Avg. Volume1,713,095
Financial Highlights & Ratios
PEG Ratio0.59
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap0.93
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit17.38
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$31.63Price Target Upside8.81% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
CareTrust REIT Business Overview & Revenue Model
Company DescriptionCareTrust REIT, Inc. is a self-administered, publicly-traded real estate investment trust engaged in the ownership, acquisition, development and leasing of skilled nursing, seniors housing and other healthcare-related properties. With a nationwide portfolio of long-term net-leased properties, and a growing portfolio of quality operators leasing them, CareTrust REIT is pursuing both external and organic growth opportunities across the United States.
How the Company Makes MoneyCareTrust REIT makes money primarily through the leasing of its properties to healthcare operators. The company's revenue model is based on a triple-net lease structure, where tenants are responsible for the majority of the property-related expenses, including maintenance, insurance, and taxes. This model provides a stable and predictable cash flow for CareTrust REIT. Additionally, the company occasionally engages in property acquisitions and dispositions to optimize its portfolio and enhance profitability. Strategic partnerships with reliable healthcare operators are crucial for maintaining occupancy rates and securing long-term leases, which directly contribute to the company's earnings.
CareTrust REIT Financial Statement Overview
Summary
CareTrust REIT has shown strong revenue growth and profitability, with impressive gross and EBIT margins. The balance sheet is robust with zero debt and a strong equity ratio. Cash flow is healthy, though there are potential volatilities in investment and capital structure strategies.Income Statement
CareTrust REIT has demonstrated strong revenue growth, with total revenue increasing from $159.06 million in 2019 to $296.29 million in 2024. The company maintains impressive gross profit and EBIT margins, consistently above 90% and 70%, respectively, in recent years. Net profit margin shows significant improvement, reaching 42.22% in 2024 from 11.46% in 2019, indicating enhanced profitability. However, fluctuations in EBITDA margin, which decreased in 2023, suggest potential volatility in operational efficiency.82
Very Positive
Balance Sheet
CareTrust REIT boasts a solid balance sheet with zero total debt in 2024, showcasing excellent financial health and risk management. The equity ratio improved to 84.64% in 2024, reflecting a strong equity base relative to assets. Return on equity (ROE) has substantially increased, reaching 4.30% in 2024, up from 1.97% in 2019, indicating effective utilization of shareholders' equity to generate profits. The absence of debt enhances financial stability and lowers risk exposure.88
Very Positive
Cash Flow
The company exhibits robust cash flow generation, with operating cash flow reaching $244.25 million in 2024, up from $126.30 million in 2019. Free cash flow also shows strong growth, reflecting efficient capital expenditure management with consistent positive free cash flow. The operating cash flow to net income ratio remained healthy at 1.95 in 2024, demonstrating strong cash generation relative to net income. However, significant fluctuations in investing and financing cash flows highlight potential volatility in investment and capital structure strategies.79
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 296.29M | 217.77M | 187.51M | 190.19M | 175.69M | Gross Profit |
| 294.96M | 208.18M | 178.13M | 186.62M | 170.98M | EBIT |
| 266.04M | 186.37M | 112.44M | 106.56M | 104.56M | EBITDA |
| 211.54M | 145.80M | 162.81M | 161.96M | 157.38M | Net Income Common Stockholders |
| 125.08M | 53.73M | 42.87M | 48.30M | 57.21M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 213.82M | 294.45M | 13.18M | 19.89M | 18.92M | Total Assets |
| 3.44B | 2.08B | 1.62B | 1.64B | 1.50B | Total Debt |
| 396.93M | 595.60M | 719.50M | 673.40M | 545.59M | Net Debt |
| 183.10M | 301.15M | 706.32M | 653.50M | 526.67M | Total Liabilities |
| 507.63M | 666.12M | 771.41M | 725.09M | 589.42M | Stockholders Equity |
| 2.91B | 1.42B | 849.37M | 915.76M | 914.14M |
| Cash Flow | Free Cash Flow | |||
| 244.25M | 143.79M | 137.12M | 150.86M | 137.44M | Operating Cash Flow |
| 244.25M | 154.77M | 144.41M | 156.87M | 145.74M | Investing Cash Flow |
| -1.51B | -267.81M | -127.40M | -192.63M | -41.58M | Financing Cash Flow |
| 1.19B | 394.32M | -23.73M | 36.74M | -105.56M |
CareTrust REIT Technical Analysis
Positive
29.07
Price Trends
27.50
Positive
27.07
Positive
27.94
Positive
Market Momentum
0.33
Negative
60.30
Neutral
84.43
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CTRE, the sentiment is Positive. The current price of 29.07 is above the 20-day moving average (MA) of 28.20, above the 50-day MA of 27.50, and above the 200-day MA of 27.94, indicating a bullish trend. The MACD of 0.33 indicates Negative momentum. The RSI at 60.30 is Neutral, neither overbought nor oversold. The STOCH value of 84.43 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 0 New Risks
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 |
|---|---|---|---|---|---|---|---|
81 Outperform | $5.49B | 36.44 | 5.76% | 4.12% | 36.06% | 61.55% | |
77 Outperform | $3.53B | 24.21 | 10.53% | 4.76% | 4.88% | 0.41% | |
72 Outperform | $5.11B | ― | -2.14% | 3.10% | 11.17% | ― | |
63 Neutral | $4.19B | 32.82 | 4.57% | 6.72% | 7.22% | 809.92% | |
60 Neutral | $2.74B | 11.40 | 0.08% | 8531.66% | 5.98% | -15.71% | |
54 Neutral | $5.58B | ― | -10.95% | 7.98% | -5.62% | -140.10% | |
49 Neutral | $3.12B | ― | -38.69% | 7.07% | 14.19% | -331.18% |
* Real Estate Sector Average
Performance Comparison
CTRE
CareTrust REIT
29.07
5.17
21.63%
NHI
National Health Investors
75.37
13.77
22.35%
SBRA
Sabra Healthcare REIT
17.62
4.30
32.28%
MPW
Medical Properties
5.14
0.64
14.22%
HR
Healthcare Realty Trust
15.89
2.07
14.98%
AHR
American Healthcare REIT, Inc.
31.81
18.67
142.09%
CareTrust REIT Earnings Call Summary
Earnings Call Date:May 01, 2025
(Q1-2025)
| % Change Since: 0.00%|
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 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.
Spark’s Take on CTRE Stock
According to Spark, TipRanks’ AI Analyst, CTRE is a Outperform.
CareTrust REIT presents a solid investment case with strong financial health and growth prospects. The robust balance sheet and revenue growth are key strengths, while the high P/E ratio suggests careful consideration of valuation. Positive technical indicators and strategic corporate events add to the stock’s appeal, despite minor risks related to political uncertainties and operator performance.
To see Spark’s full report on CTRE stock, click here.
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.
Private Placements and FinancingDividendsBusiness Operations and StrategyFinancial Disclosures
CareTrust REIT Reports Strong 2024 Financial Performance
Positive
Feb 12, 2025
CareTrust REIT announced its operating results for the fourth quarter and full year of 2024, reporting significant financial achievements including investments of $696.5 million and a public stock offering yielding $507.8 million. The company also expanded its credit line and maintained a strong balance sheet with no outstanding borrowings. The results reflect a robust year with upgrades to investment-grade credit, a solid dividend payout, and a positive outlook for future growth opportunities.
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.