Diversified Healthcare Trust (DHC) AI Stock Analysis

• Market Cap: $919.79M
• Dividend Yield: 1.06%
• Average Volume (3M): 726.13K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.61
• Revenue Growth: 4.29%
• EPS Growth: 18.89%
• Country: US
• Employees: 600
• Sector: Real Estate
• Sector Strength: 49
• Industry: REIT - Healthcare Facilities
• EPS (TTM): 0.08
• Shares Outstanding: 241,414,350
• 10 Day Avg. Volume: 584,355
• 30 Day Avg. Volume: 726,129
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 3.66
• Enterprise Value/Revenue: 2.21
• Enterprise Value/Gross Profit: 6.54
• Enterprise Value/Ebitda: 14.17
• 1Y Price Target: $3.00
• Price Target Upside: -19.79% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 1

• Rating: 59 Neutral
• Price Target: $4.00 ▲(6.95% Upside)

Diversified Healthcare Trust's overall stock score reflects a mix of strengths and challenges. The company's strong technical momentum and strategic corporate actions are positive, but profitability issues and high leverage remain significant concerns. The earnings call provided a cautiously optimistic outlook, with growth in key financial metrics and improved liquidity.

Positive Factors

Debt Refinancing

DHC intends to issue agency-secured debt to repay the $440mm of 2025 notes at a 9.75% interest rate, aiming for new notes around 6%.

Earnings

DHC reported a 2Q24 earnings beat, generating Core FFO of $0.03 versus consensus at $0.02 and Citizens JMP at $0.01 per share.

NOI Growth

DHC’s same-store cash NOI increased 16.1% year-over-year, with a 38.4% increase to SHOP, partially offset by a slight change in the Medical Office / Life Science Portfolio.

Negative Factors

Core FFO Performance

The company reported Core FFO of $0.02, below consensus at $0.04, reflecting lower SHOP NOI and underperformance in the office/life science portfolio.

Guidance Revision

Management lowered FY 2024 SHOP NOI guidance to $102mm to $107mm from the previous range of $120mm to $140mm due to disappointing occupancy trends and expense challenges.

Occupancy Issues

Occupancy within the SHOP was below expectations this quarter as there was no functional change sequentially.

Diversified Healthcare Trust Business Overview & Revenue Model

Company Description

DHC is a real estate investment trust, or REIT, that owns medical office and life science properties, senior living communities and wellness centers throughout the United States. DHC is managed by the operating subsidiary of The RMR Group Inc., an alternative asset management company that is headquartered in Newton, MA.

How the Company Makes Money

DHC generates revenue primarily through leasing its properties to healthcare operators and tenants, which include senior living facilities and medical office spaces. The company collects rent payments from these tenants, which serve as its main source of income. Additionally, DHC may earn revenue through property management fees and other ancillary services associated with its real estate assets. Partnerships with leading healthcare providers and operators enhance its ability to attract and retain tenants, thereby stabilizing its cash flow. Moreover, the demand for healthcare real estate, driven by demographic trends such as an aging population, contributes to DHC's revenue potential.

Diversified Healthcare Trust Financial Statement Overview

Summary

Diversified Healthcare Trust is experiencing growth in revenue but faces challenges in profitability and leverage. The company has improved its cash flow position, but high debt levels and negative returns on equity remain concerns. Continued focus on cost management and debt reduction could enhance financial stability.

Income Statement

The income statement shows a mixed performance. While there is a positive revenue growth trend, the company is struggling with negative net and EBIT margins, indicating profitability issues. The gross profit margin has improved significantly in the TTM period, but the net profit margin remains negative, suggesting ongoing challenges in cost management and operational efficiency.

Balance Sheet

The balance sheet reflects a high debt-to-equity ratio, which poses a risk of financial leverage. The return on equity is negative, indicating that the company is not generating sufficient returns on shareholders' investments. However, the equity ratio is relatively stable, suggesting a balanced asset structure.

Cash Flow

The cash flow statement shows improvement in free cash flow growth, indicating better cash management. The operating cash flow to net income ratio is positive, suggesting that the company is generating cash from its operations despite net losses. However, the high free cash flow to net income ratio indicates reliance on non-operational cash sources.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.52B	1.50B	1.41B	1.28B	1.38B	1.63B
Gross Profit	514.38M	258.88M	236.16M	174.50M	291.40M	395.67M
EBITDA	237.52M	229.86M	203.19M	163.99M	708.25M	383.30M
Net Income	-286.76M	-370.25M	-293.57M	-21.83M	174.51M	-134.31M
Balance Sheet
Total Assets	4.76B	5.14B	5.45B	6.00B	6.62B	6.48B
Cash, Cash Equivalents and Short-Term Investments	141.77M	144.58M	245.94M	658.07M	634.85M	74.42M
Total Debt	2.66B	2.91B	2.82B	3.05B	3.68B	3.57B
Total Liabilities	2.90B	3.18B	3.11B	3.36B	3.96B	3.86B
Stockholders Equity	1.85B	1.96B	2.34B	2.64B	2.66B	2.62B
Cash Flow
Free Cash Flow	142.65M	112.22M	10.48M	-339.74M	-290.93M	-27.04M
Operating Cash Flow	89.11M	112.22M	10.48M	-40.35M	-63.32M	158.54M
Investing Cash Flow	178.71M	-187.02M	-202.11M	387.71M	242.70M	-40.44M
Financing Cash Flow	-389.32M	-22.31M	-249.71M	-676.00M	746.72M	-79.48M

Diversified Healthcare Trust Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3.74
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DHC, the sentiment is Positive. The current price of 3.74 is above the 20-day moving average (MA) of 3.59, above the 50-day MA of 3.57, and above the 200-day MA of 2.83, indicating a bullish trend. The MACD of 0.08 indicates Negative momentum. The RSI at 57.84 is Neutral, neither overbought nor oversold. The STOCH value of 72.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DHC.

Diversified Healthcare Trust Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
STRW	72 Outperform	$156.95M	20.08	51.91%	4.58%	24.72%	30.05%
SILA	71 Outperform	$1.36B	34.82	2.71%	6.42%	0.43%	58.57%
GMRE	64 Neutral	$545.69M	108.77	1.94%	10.60%	0.90%	―
UHT	63 Neutral	$563.15M	31.42	10.08%	7.26%	0.14%	-0.76%
DHC	59 Neutral	$919.79M	―	-14.32%	1.06%	4.29%	18.89%
Sector *	53 Neutral	$1.23B	2.98	-5.63%	5.85%	-6.20%	-79.02%
CHCT	48 Neutral	$437.13M	―	-2.22%	12.41%	2.96%	-877.53%

Diversified Healthcare Trust Corporate Events

Diversified Healthcare Trust Sells Senior Living Management

On September 3, 2025, Diversified Healthcare Trust announced the sale of management agreements for 116 senior living communities to seven different operators, as part of AlerisLife Inc.’s asset sale and business wind-down. This strategic move is expected to impact DHC’s operations by aligning with its capital recycling plans and enhancing its focus on core assets, potentially benefiting stakeholders through improved financial stability and positioning within the healthcare real estate market.