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Diversified Healthcare Trust (DHC)
NASDAQ:DHC
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Diversified Healthcare Trust
(NASDAQ:DHC)
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Rating:54Neutral
Price Target:
$6.00
â–¼(-11.24% Downside)
Action:ReiteratedDate:02/25/26
The score is held down primarily by weak financial performance (recurring losses and 2025 negative EBITDA and operating/free cash flow). Offsetting this, the latest earnings call outlined improving operating momentum and constructive 2026 guidance with better liquidity/deleveraging progress, while technicals are moderately supportive and valuation is mixed due to losses despite a high dividend yield.
Positive Factors
SHOP segment operational momentum
Sustained occupancy and rate gains in the SHOP portfolio signal durable operating improvement: higher occupancy, meaningful rent growth and expanded margins imply recurring cash‑flow uplift. This strengthens revenue resilience and margin sustainability over the next 2–6 months as operator execution normalizes.
Balance sheet / liquidity progress
Material deleveraging, available revolver capacity and no near‑term maturities materially reduce refinancing risk and provide runway for operations and capex. Improved liquidity and capital‑markets access enhance financial flexibility and support a multi‑quarter recovery plan and asset recycling strategy.
MOB & life science leasing strength
Long lease terms, sizable leasing pipeline and positive rent spreads point to durable cash flows and tenant demand in MOB/Life Science. This supports stable rental income and lower vacancy risk, bolstering the REIT's ability to sustain NOI and fund recurring capex across economic cycles.
Negative Factors
Weak profitability and cash flow
Operating profitability and cash generation remain inconsistent: a turn to negative EBITDA and free cash flow in 2025 evidences fragile core earnings. Persistent losses constrain reinvestment, debt paydown and dividend sustainability, requiring several quarters of consistent NOI and cash conversion to restore stability.
Elevated leverage remains
Although improved, leverage at ~8x keeps the company sensitive to interest‑rate or NOI shocks. Modest interest coverage (improved but still limited) restricts discretionary investments and raises refinancing risk if operational momentum slows, making balance‑sheet repair a multi‑quarter task.
Operator transition and underperforming assets
Large operator transitions and pockets of underperforming communities increase execution risk: operator integration lag can suppress occupancy and NOI for multiple quarters, and asset dispositions reduce scale and near‑term income, slowing full recovery of recurring earnings.
Diversified Healthcare Trust (DHC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.64B
Dividend Yield0.8%
Average Volume (3M)1.92M
Price to Earnings (P/E)―
Beta (1Y)0.33
Revenue Growth4.10%
EPS Growth8.96%
CountryUS
Employees600
SectorReal Estate
Sector Strength53
IndustryREIT - Healthcare Facilities
Share Statistics
EPS (TTM)0.09
Shares Outstanding242,121,020
10 Day Avg. Volume2,163,869
30 Day Avg. Volume1,923,763
Financial Highlights & Ratios
PEG Ratio0.18
Price to Book (P/B)0.70
Price to Sales (P/S)0.76
P/FCF Ratio-59.40
Enterprise Value/Market Cap0.94
Enterprise Value/Revenue1.00
Enterprise Value/Gross Profit9.91
Enterprise Value/Ebitda9.04
Forecast
1Y Price Target
$6.50Price Target Upside-3.85% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)-0.58
Revenue Forecast (FY)$1.61B
Diversified Healthcare Trust Business Overview & Revenue Model
Company DescriptionDHC 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 MoneyDHC makes money primarily through rental income from its diversified portfolio of healthcare properties. The company leases its properties to operators and tenants, generating a steady stream of revenue. Key revenue streams include long-term leases with established healthcare providers, which often include built-in rent escalations to ensure income growth over time. Additionally, DHC may benefit from strategic partnerships with healthcare operators that enhance property management efficiency and tenant retention. The company's financial performance is also influenced by market demand for healthcare services, occupancy rates, and the overall economic environment, which can impact rental pricing and property valuations.
Diversified Healthcare Trust Key Performance Indicators (KPIs)
Any
Revenue by Segment
Breaks down revenue by property type and service line—such as skilled nursing, assisted living, behavioral health, and management fees—showing which parts of Diversified Healthcare Trust generate the most cash. Reveals concentration risk, exposure to Medicare/Medicaid and private-pay mix, and whether occupancy or service demand trends are driving growth or decline.
Breaks down revenue by property type and service line—such as skilled nursing, assisted living, behavioral health, and management fees—showing which parts of Diversified Healthcare Trust generate the most cash. Reveals concentration risk, exposure to Medicare/Medicaid and private-pay mix, and whether occupancy or service demand trends are driving growth or decline.
Data provided by:
The Fly
The FlyDiversified Healthcare Trust Earnings Call Summary
Earnings Call Date:Feb 24, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 11, 2026
Earnings Call Sentiment Positive
The call presented a largely positive operational and financial narrative: strong NOI growth (+31.3% FY), meaningful SHOP performance improvement (Q4 SHOP NOI +27.6% YoY, same-store occupancy and rate gains, margin expansion), successful asset dispositions and deleveraging actions (net debt/EBITDAre down to 8.1x, no maturities until 2028), disciplined CapEx and robust liquidity. Challenges were acknowledged — integration/transition noise from the AlerisLife wind-down, remaining elevated leverage above target, pockets of underperforming SHOP assets being sold, and some near-term NOI headwinds in MOB/LS driven by prior sales. On balance the highlights substantially outweigh the lowlights, with clear operational levers and guidance that indicate continued improvement into 2026.Q4-2025 Updates
Positive Updates
Strong Consolidated NOI Growth
Full-year consolidated NOI grew 31.3% in 2025, driven by operational execution and portfolio actions.
SHOP Segment Improvement
SHOP NOI for the quarter improved 27.6% year-over-year to $38.3M and full-year SHOP NOI was $139.3M (toward the high end of guidance). Same-property SHOP occupancy rose 90 bps YoY to 82.4%, average monthly rate increased ~5.8% YoY, and same-property SHOP NOI margins expanded 230 bps YoY.
Same-Property Cash NOI Momentum
Q4 same-property cash basis NOI was $70.4M, up 15.4% YoY and 12.4% sequentially. Consolidated same-property cash-basis NOI for Medical Office & Life Science increased 3.8% YoY with margins improving 100 bps to 59.6%.
Capital Markets and Deleveraging Progress
Completed over $1.4B of capital markets activity in 2025 (financing, asset sales, and a $150M undrawn credit facility). Net debt to adjusted EBITDAre declined from 11.2x (YE 2024) to 8.1x (YE 2025), and there are no debt maturities until 2028.
Asset Dispositions and Balance Sheet Actions
Sold 37 noncore properties in Q4 for ~$250M and 69 properties for ~$605M in 2025; proceeds fully repaid 2026 zero-coupon bonds and released 45 collateral properties with gross book value of ~ $850M.
Q4 Financial Results
Q4 total revenue $379.6M, adjusted EBITDAre $72.4M, normalized FFO $21.8M or $0.09 per share; full-year adjusted EBITDAre $284M (high end of guidance).
Liquidity and Cash Position
Ended quarter with approximately $255M of liquidity (including $105M unrestricted cash and $150M undrawn revolver). Subsequent $27.2M distribution received from AlerisLife wind-down.
MOB & Life Science Leasing Strength
Completed ~81,000 sq ft of leasing in Q4 at weighted average rents 7.9% above prior rents and average lease term >8 years. Leasing pipeline totals ~1.0M sq ft with average term ~6.9 years and GAAP rent spreads >10%.
CapEx Discipline
2025 capital spend totaled $146M (23% reduction vs 2024). 2026 recurring CapEx guidance of $100M–$115M (midpoint >18% decrease vs 2025), including $80M–$90M for SHOP and $20M–$25M for MOB/LS.
2026 Guidance and Outlook
2026 guidance: SHOP NOI $175M–$185M; MOB/LS NOI $94M–$98M; triple-net NOI $28M–$30M; adjusted EBITDAre $290M–$305M; normalized FFO $0.52–$0.58 per share. Management expects continued SHOP NOI improvement, lower interest costs, and lower CapEx to drive free cash flow growth.
Operational Upside Pipeline
Identified opportunity to reposition closed skilled nursing wings to add ~500 SHOP units with potential unlevered mid-teens ROI; estimated total capital to support these projects ~ $125M–$175M (timing multi-year).
Negative Updates
Transition Noise from AlerisLife Wind-Down
Transition of 116 communities to seven operators created operational 'noise' during the year; while largely completed, some transitions weighed on sequential top-line growth and required integration time for operators to realize full benefits.
Remaining Elevated Leverage
Net debt to adjusted EBITDAre remains elevated at 8.1x despite meaningful improvement from 11.2x, above management's target range of 6.5x–7.5x.
Underperforming SHOP Assets Marked for Sale
13 SHOP communities under agreement to sell for $23M (expected to close in March); these 13 properties lost $1.2M in Q4 and $3.0M for the full year, reflecting pockets of underperformance.
MOB/LS NOI Decline Driven by Sales
2026 expected decline in Medical Office and Life Science NOI largely driven by the sale of 31 properties that contributed $12.3M of NOI in 2025; 10.1% of annualized MOB/LS revenue scheduled to expire through 2026 with ~241k sq ft (~3.9% of annualized revenue) expected to vacate.
Interest Coverage Still Modest
Adjusted EBITDAre to interest expense improved to 1.5x in 2025 but remains modest; management expects coverage to be at or above 2.0x by year-end 2026, implying current vulnerability to interest cost volatility.
Dividend Uncertainty
Management indicated the Board will consider the dividend but there is no immediate priority to change it, leaving near-term clarity on dividend policy open for investors.
Company Guidance
On the call DHC gave 2026 guidance calling for SHOP NOI of $175–185 million, Medical Office & Life Science NOI of $94–98 million, and triple‑net senior living/wellness NOI of $28–30 million, supporting consolidated adjusted EBITDAre of $290–305 million and normalized FFO of $0.52–$0.58 per share; recurring CapEx is guided to $100–115 million (SHOP $80–90M, MOB/Life Science $20–25M, including ~$10M of refresh/ROI spend). Management noted liquidity of roughly $255 million (≈$105M unrestricted cash and $150M available on the revolver), no debt maturities until 2028, a year‑end 2025 net debt/adjusted‑EBITDAre of 8.1x (down from 11.2x), a near‑term leverage target of 6.5x–7.5x, and an expectation that adjusted‑EBITDAre/interest expense will be at or above 2.0x by year‑end 2026 (weighted‑average cash interest was 5.7% as of 12/31); the guidance also reflects operational momentum in SHOP (2025 SHOP NOI $139.3M, same‑property occupancy +90 bps to 82.4% in 2025 and roughly a 300‑bp full‑year occupancy improvement implied for 2026) and remaining opportunistic dispositions (13 properties under agreement for $23M).Diversified Healthcare Trust Financial Statement Overview
Summary
Fundamentals remain pressured: multi-year revenue choppiness with recent declines, recurring net losses, and 2025 deterioration to negative EBITDA and negative operating/free cash flow. While the balance sheet narrative shows improvement (notably reduced leverage and solid liquidity noted), overall earnings power and cash consistency are still weak.Income Statement
Revenue has been choppy with a multi-year decline overall (2020 to 2025), including a slight dip in 2025 after growth in 2023–2024. Profitability is the key weakness: net results have been negative in most recent years, with a notably weak net margin in 2024 and still negative in 2025. EBITDA also turned negative in 2025, signaling a deterioration in operating performance versus the prior two years despite earlier periods of positive EBITDA.28
Negative
Balance Sheet
Leverage has been a major overhang historically, with debt running above equity from 2020–2024, which limits flexibility in a higher-rate environment typical for REITs. Equity and total assets have trended down over time, and returns on equity have been negative in recent years, reflecting persistent losses. A notable positive is that 2025 shows no debt reported and a lower asset base—if accurate, this would materially reduce balance-sheet risk, but the sharp shift versus 2024 introduces uncertainty and does not fully offset the weak profitability profile.34
Negative
Cash Flow
Cash generation is inconsistent and has recently weakened: operating cash flow was positive in 2023–2024 but turned negative in 2025, with free cash flow also negative. Free cash flow growth is extremely volatile (including a sharp decline in 2025), pointing to unstable underlying cash economics. While 2024 showed relatively solid cash flow support versus net income, the latest year’s negative cash flow raises near-term funding and liquidity concerns.22
Negative
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.54B | 1.50B | 1.41B | 1.28B | 1.38B |
| Gross Profit | -245.33M | 256.38M | 225.30M | 174.50M | 291.40M |
| EBITDA | 182.28M | 229.96M | 198.93M | 427.79M | 708.25M |
| Net Income | -285.89M | -370.25M | -293.57M | -15.77M | 174.51M |
Balance Sheet | |||||
| Total Assets | 4.36B | 5.14B | 5.45B | 6.00B | 6.62B |
| Cash, Cash Equivalents and Short-Term Investments | 105.41M | 144.58M | 245.94M | 658.07M | 634.85M |
| Total Debt | 0.00 | 2.91B | 2.82B | 3.08B | 3.68B |
| Total Liabilities | 2.70B | 3.18B | 3.11B | 3.36B | 3.96B |
| Stockholders Equity | 1.67B | 1.96B | 2.34B | 2.64B | 2.66B |
Cash Flow | |||||
| Free Cash Flow | -19.62M | 112.22M | 10.48M | -40.35M | -63.32M |
| Operating Cash Flow | -19.62M | 112.22M | 10.48M | -40.35M | -63.32M |
| Investing Cash Flow | 483.57M | -187.02M | -202.11M | 387.71M | 242.70M |
| Financing Cash Flow | -492.01M | -22.31M | -249.71M | -676.00M | 746.72M |
Diversified Healthcare Trust Technical Analysis
Positive
6.76
Price Trends
5.70
Positive
5.07
Positive
4.36
Positive
Market Momentum
0.25
Positive
66.45
Neutral
83.47
Negative
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 6.76 is above the 20-day moving average (MA) of 6.31, above the 50-day MA of 5.70, and above the 200-day MA of 4.36, indicating a bullish trend. The MACD of 0.25 indicates Positive momentum. The RSI at 66.45 is Neutral, neither overbought nor oversold. The STOCH value of 83.47 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DHC.
Diversified Healthcare Trust Risk Analysis
Diversified Healthcare Trust disclosed 59 risk factors in its most recent earnings report. Diversified Healthcare Trust 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
Diversified Healthcare Trust Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $14.27B | 24.89 | 11.79% | 6.11% | 13.50% | 31.56% | |
73 Outperform | $1.41B | 42.76 | 0.72% | 6.98% | 3.74% | 77.82% | |
69 Neutral | $1.92B | 15.75 | 11.52% | 6.70% | 11.89% | -68.41% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
54 Neutral | $1.64B | -5.68 | -15.78% | 0.80% | 4.10% | 8.96% |
* Real Estate Sector Average
DHC
Diversified Healthcare Trust
6.76
3.96
141.69%
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Diversified Healthcare Trust Corporate Events
Business Operations and StrategyFinancial Disclosures
Diversified Healthcare Trust Highlights Strong 2025 Performance Outlook
Positive
Feb 24, 2026
In February 2026, Diversified Healthcare Trust published an investor presentation outlining its position as a national healthcare REIT with a $6.3 billion portfolio concentrated in senior housing, medical office and life science assets. The portfolio is designed to meet rising demand across the healthcare continuum by combining high-quality care environments, technology and amenities, and is supported by 14 senior housing operators and around 290 tenants.
The release highlighted that in 2025 the company made substantial progress on its long-term business plan, delivering a 113% total shareholder return and ranking first among U.S.-listed real estate investment trusts by that measure. This performance, together with its diversified asset mix and demographic tailwinds in healthcare and senior living, underscored DHC’s strengthened market positioning and potential for durable, risk-adjusted returns for investors and other stakeholders.
The most recent analyst rating on (DHC) stock is a Hold with a $6.00 price target. To see the full list of analyst forecasts on Diversified Healthcare Trust stock, see the DHC Stock Forecast page.
Business Operations and Strategy
Diversified Healthcare Trust Gains Cash from AlerisLife Wind-Down
Positive
Jan 14, 2026
On January 9, 2026, Diversified Healthcare Trust received a cash dividend of $27.2 million from AlerisLife Inc. related to AlerisLife’s sale of all its assets and the wind-down of its business, and the company expects to receive an additional $3.0 million to $7.0 million upon completion of that wind-down, providing a notable cash inflow tied to the dissolution of this investment holding.
The most recent analyst rating on (DHC) stock is a Hold with a $5.50 price target. To see the full list of analyst forecasts on Diversified Healthcare Trust stock, see the DHC Stock Forecast page.
Business Operations and Strategy
Diversified Healthcare Trust Reshapes Senior Living Operations
Neutral
Jan 5, 2026
On December 31, 2025, Diversified Healthcare Trust completed the previously announced transition of management for 116 of its senior living communities from AlerisLife Inc. to seven different third-party operators, marking a significant reshaping of how this portion of its portfolio is run. As part of this shift, the company and AlerisLife mutually terminated their existing management agreements for these communities, signaling a strategic move to diversify operational oversight that may affect performance, risk distribution, and relationships with operating partners across its senior housing platform.
The most recent analyst rating on (DHC) stock is a Buy with a $6.50 price target. To see the full list of analyst forecasts on Diversified Healthcare Trust stock, see the DHC Stock Forecast page.
Business Operations and Strategy
Diversified Healthcare Trust Outlines 2025 Strategic Initiatives
Positive
Dec 8, 2025
On December 8, 2025, Diversified Healthcare Trust released an investor presentation outlining its strategic initiatives and financial outlook for 2025. The presentation highlighted DHC’s plans for capital recycling, operator transitions, and occupancy growth within its senior housing operating portfolio. It also emphasized the company’s focus on maintaining a strong liquidity position and leveraging favorable industry trends to enhance its market positioning. The strategic initiatives are expected to impact DHC’s operations positively, with potential implications for stakeholders in terms of improved financial performance and market competitiveness.
The most recent analyst rating on (DHC) stock is a Hold with a $5.00 price target. To see the full list of analyst forecasts on Diversified Healthcare Trust stock, see the DHC Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.