Omega Healthcare (OHI) AI Stock Analysis

• Market Cap: $11.07B
• Dividend Yield: 6.95%
• Average Volume (3M): 2.55M
• Price to Earnings (P/E): 25.7
• Beta (1Y): 0.12
• Revenue Growth: 9.90%
• EPS Growth: 56.41%
• Country: US
• Employees: 60
• Sector: Real Estate
• Sector Strength: 80
• Industry: REIT - Healthcare Facilities
• EPS (TTM): 1.53
• Shares Outstanding: 287,147,520
• 10 Day Avg. Volume: 2,285,584
• 30 Day Avg. Volume: 2,552,835
• PEG Ratio: 0.46
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.39
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 14.86
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $40.33
• Price Target Upside: 8.94% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 10

Omega Healthcare's overall stock score reflects strong financial performance and solid earnings guidance, tempered by technical indicators suggesting caution and a relatively high P/E ratio. The company's robust dividend yield and improved leverage position are key strengths, while potential challenges from tenant issues and policy changes present risks.

Positive Factors

External Growth

Attractive cost of capital and low leverage would fuel the external growth, as evidenced by significant investments in real estate acquisitions and loans.

Financial Performance

Tenant health continues to improve with EBITDAR coverage reaching 1.50x, indicating a strengthening financial position.

Growth Strategy

Management has been opportunistic with equity capital raising, allowing the company to build an excess cash position ahead of debt maturities, providing potential for acquisitions.

Negative Factors

Liquidity Concerns

Given unexpected GEN liquidity concerns, shares may react negatively with potential Medicaid.

Regulatory Risks

There are risks due to exposure to PACS Group, one of its largest operators, and uncertainties around potential Medicaid cost-cutting efforts.

Valuation Risks

The stock is considered fairly valued at a multiple that reflects increased risk related to PACS and uncertainties with the new administration's agenda.

Omega Healthcare Business Overview & Revenue Model

Company Description

Omega is a real estate investment trust that invests in the long-term healthcare industry, primarily in skilled nursing and assisted living facilities. Its portfolio of assets is operated by a diverse group of healthcare companies, predominantly in a triple-net lease structure. The assets span all regions within the US, as well as in the UK.

How the Company Makes Money

Omega Healthcare makes money primarily through leasing properties to healthcare operators. The company's revenue model is built on long-term, triple-net lease agreements, where the tenant is responsible for paying property taxes, insurance, and maintenance costs in addition to rent. This structure provides Omega with a stable and predictable revenue stream. The company also benefits from rent escalations included in its lease agreements, which help offset inflation and increase income over time. Additionally, Omega occasionally engages in strategic acquisitions and dispositions of properties to optimize its portfolio and enhance returns. Partnerships with reliable operators and the growing demand for healthcare services, particularly for aging populations, are significant factors contributing to Omega's earnings.

Omega Healthcare Financial Statement Overview

Summary

Omega Healthcare demonstrates robust financial performance with strong profitability margins, a solid equity position, and efficient cash flow management. The company exhibits significant revenue growth and improved profitability with no current debt, enhancing its balance sheet strength. Despite a slight decline in free cash flow, the overall financial health remains strong.

Income Statement

Omega Healthcare shows a strong financial performance with a solid gross profit margin of 84.1% and an impressive net profit margin of 39.2% for TTM. The revenue growth rate is 11.3% from the previous year, indicating a positive upward trajectory. The EBIT margin stands at 77.2%, and the EBITDA margin is 89.9%, reflecting high operational efficiency. These metrics suggest robust profitability and effective cost management.

Balance Sheet

The company has a strong equity position with a debt-to-equity ratio of 0.0 in the TTM, indicating no current debt and a significant improvement from previous years. The return on equity for TTM is 9.1%, showcasing profitability relative to shareholder investments. The equity ratio is 50.1%, suggesting a stable capital structure with a balanced approach to leverage and equity. These factors contribute to financial stability, although the past debt levels should be monitored.

Cash Flow

Omega Healthcare exhibits strong cash flow management with a positive free cash flow growth rate of -18.9% from the previous year, indicating a decrease but still maintaining substantial free cash flow. The operating cash flow to net income ratio is 1.26, and the free cash flow to net income ratio is 1.21, reflecting efficient cash conversion and strong cash generation capabilities. Despite the minor decline in free cash flow, the overall cash flow position remains healthy.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.05B	949.74M	878.24M	1.06B	892.38M
	Gross Profit
1.04B	890.16M	861.27M	1.05B	878.62M
	EBIT
659.66M	761.27M	390.28M	564.88M	452.25M
	EBITDA
947.11M	810.84M	722.69M	906.89M	782.18M
	Net Income Common Stockholders
406.33M	242.18M	426.93M	416.74M	159.33M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
518.34M	442.81M	297.10M	20.53M	163.53M
	Total Assets
9.90B	9.12B	9.41B	9.64B	9.50B
	Total Debt
4.84B	5.07B	5.29B	5.25B	5.17B
	Net Debt
4.32B	4.62B	4.99B	5.23B	5.01B
	Total Liabilities
5.17B	5.36B	5.60B	5.53B	5.46B
	Stockholders Equity
4.54B	3.57B	3.61B	3.91B	3.84B
Cash Flow		Free Cash Flow
749.43M	617.74M	578.51M	627.07M	633.14M
	Operating Cash Flow
749.43M	617.74M	625.73M	722.14M	708.26M
	Investing Cash Flow
-671.16M	-770.00K	442.85M	-524.17M	-89.06M
	Financing Cash Flow
26.32M	-473.31M	-789.45M	-341.12M	-485.55M

Omega Healthcare Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 37.02
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OHI, the sentiment is Negative. The current price of 37.02 is below the 20-day moving average (MA) of 37.84, below the 50-day MA of 37.55, and below the 200-day MA of 37.76, indicating a bearish trend. The MACD of 0.14 indicates Positive momentum. The RSI at 43.30 is Neutral, neither overbought nor oversold. The STOCH value of 61.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OHI.

Omega Healthcare Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CTRE	80 Outperform	$5.46B	36.19	5.76%	4.14%	36.06%	61.55%
OHI	74 Outperform	$11.07B	25.67	10.02%	6.95%	9.90%	56.41%
AHR	72 Outperform	$5.23B	―	-2.14%	3.14%	11.17%	―
DOC	69 Neutral	$12.99B	44.81	3.26%	6.78%	23.65%	12.82%
SBRA	63 Neutral	$4.19B	32.82	4.57%	6.81%	7.22%	809.92%
Sector *	60 Neutral	$2.78B	11.39	0.16%	8531.54%	5.92%	-14.67%
HR	49 Neutral	$5.58B	―	-10.95%	7.80%	-5.62%	-140.10%

Omega Healthcare Corporate Events

Omega Healthcare Announces Leadership Changes for 2025

Omega Healthcare Investors, Inc. has announced leadership changes effective January 1, 2025, with Matthew Gourmand appointed as President and Vikas Gupta as Chief Investment Officer. These appointments are part of Omega’s ongoing succession planning, aiming to drive future growth. Additionally, Dan Booth, after 23 years as Chief Operating Officer, will transition to a consulting role for one year, ensuring a smooth handover of responsibilities.