Ventas (VTR) AI Stock Analysis

1,522 Followers

Top Page

Ventas

(NYSE:VTR)

63Neutral

Ventas shows a strong position in senior housing and a positive earnings outlook, but faces challenges in profitability and cash flow management. Technical indicators show upward momentum, though the high P/E ratio suggests overvaluation. The dividend yield offers some appeal, and the optimistic earnings call sentiment supports a moderately positive outlook.

Positive Factors

Acquisitions

Year-to-date Ventas closed $1.3 billion of senior housing investments at an attractive initial yield of over 8%.

Earnings

Ventas Inc reported a 4Q24 Normalized FFO of $0.81, beating expectations and driven by favorable interest expense.

Financial Performance

The company introduced a 2025 Normalized FFO per share guidance of $3.41, showing a 6.9% year-over-year increase.

Negative Factors

Guidance

Headline miss on guidance, but adjusted for higher share count, FFO guide is in line.

Market Expectations

Near-term bears may point to a higher buy-side bar given stock and performance of peers, and therefore results somewhat dissatisfying.

Ventas (VTR) vs. S&P 500 (SPY)

Market Cap

$29.70B

Dividend Yield2.77%

Average Volume (3M)3.76M

Price to Earnings (P/E)339.2

Beta (1Y)0.56

Revenue Growth9.48%

EPS GrowthN/A

CountryUS

Employees498

SectorReal Estate

Sector Strength71

IndustryREIT - Healthcare Facilities

Share Statistics

EPS (TTM)0.19

Shares Outstanding437,697,800

10 Day Avg. Volume4,459,773

30 Day Avg. Volume3,763,401

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)5.93

Price to Cash Flow (P/CF)19.60

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$74.30

Price Target Upside12.39% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering11

Ventas Business Overview & Revenue Model

Company DescriptionVentas, an S&P 500 company, operates at the intersection of two powerful and dynamic industries: healthcare and real estate. As one of the world's foremost Real Estate Investment Trusts (REIT), we use the power of capital to unlock the value of real estate, partnering with leading care providers, developers, research and medical institutions, innovators and healthcare organizations whose success is buoyed by the demographic tailwind of an aging population. For more than twenty years, Ventas has followed a successful strategy that endures: combining a high-quality diversified portfolio of properties and capital sources to manage through cycles, working with industry leading partners, and a collaborative and experienced team focused on producing consistent growing cash flows and superior returns on a strong balance sheet, ultimately rewarding Ventas shareholders. As of September 30, 2020, Ventas owned or managed through unconsolidated joint ventures approximately 1,200 properties.

How the Company Makes MoneyVentas generates revenue primarily through leasing its real estate properties to a diverse group of tenants in the healthcare and senior living industries. The company earns rental income from long-term lease agreements with operators of senior housing communities, medical office buildings, and other healthcare facilities. Additionally, Ventas benefits from property management fees and may also engage in development and redevelopment projects that enhance the value of its portfolio. The company's earnings are supported by strategic partnerships with leading healthcare operators and a focus on maintaining high occupancy rates across its properties. Ventas's diversified asset base and strategic relationships enable it to capitalize on trends in the healthcare sector, contributing to its financial stability and growth.

Ventas Financial Statement Overview

Summary

Ventas demonstrates strong revenue growth and improved debt management, indicating potential for financial stability. However, the company struggles with profitability, highlighted by low net profit margins and inconsistent cash flow performance. Improving operational efficiency and cash management remains crucial for financial health.

Income Statement

Neutral

Ventas showed a strong revenue growth rate of 9.48% from 2022 to 2023, and further growth of 9.47% from 2023 to 2024. However, despite this growth, net profit margins have been persistently low or negative, with a slight improvement in 2024 to 0.00%. EBIT and EBITDA margins indicate operational efficiency but are inconsistent with net income performance.

Balance Sheet

Positive

The company's debt-to-equity ratio improved significantly in 2024, with zero debt reported, enhancing the equity ratio to 41.13%. Return on equity (ROE) remains weak due to low net income. Overall, the balance sheet shows reduced leverage, contributing to financial stability.

Cash Flow

Neutral

Cash flow metrics are concerning, with no free cash flow or operating cash flow reported in 2024. Previous years showed positive free cash flow and a strong operating cash flow to net income ratio. The absence of cash flow data in 2024 raises questions about cash management.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
4.92B	4.50B	4.13B	3.83B	3.80B
	Gross Profit
2.10B	770.72M	1.85B	1.74B	1.86B
	EBIT
0.00	665.12M	454.08M	389.30M	592.58M
	EBITDA
1.94B	1.83B	1.65B	1.60B	1.72B
	Net Income Common Stockholders
81.15M	-40.97M	-40.93M	49.01M	439.15M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
897.85M	508.79M	122.56M	149.72M	413.33M
	Total Assets
26.19B	24.73B	24.16B	24.72B	23.93B
	Total Debt
13.74B	13.69B	12.92B	12.22B	12.11B
	Net Debt
12.84B	13.18B	12.79B	12.08B	11.69B
	Total Liabilities
15.36B	14.88B	13.94B	13.77B	13.65B
	Stockholders Equity
10.77B	9.49B	10.15B	10.85B	10.18B
Cash Flow		Free Cash Flow
725.78M	935.13M	666.09M	593.15M	921.53M
	Operating Cash Flow
1.33B	1.12B	1.12B	1.03B	1.45B
	Investing Cash Flow
-2.38B	-184.66M	-859.22M	-724.14M	154.29M
	Financing Cash Flow
1.45B	-543.75M	-283.93M	-558.47M	-1.30B

Ventas Technical Analysis

Technical Analysis Sentiment

Positive

Last Price66.11

Price Trends

50DMA

65.84

Positive

100DMA

62.78

Positive

200DMA

60.85

Positive

Market Momentum

MACD

0.81

Positive

RSI

61.17

Neutral

STOCH

62.27

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VTR, the sentiment is Positive. The current price of 66.11 is below the 20-day moving average (MA) of 67.12, above the 50-day MA of 65.84, and above the 200-day MA of 60.85, indicating a neutral trend. The MACD of 0.81 indicates Positive momentum. The RSI at 61.17 is Neutral, neither overbought nor oversold. The STOCH value of 62.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VTR.

Ventas Risk Analysis

Ventas disclosed 52 risk factors in its most recent earnings report. Ventas 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

Ventas Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CTRE	79 Outperform	$5.27B	34.95	5.76%	4.29%	36.06%	61.55%
WELL	78 Outperform	$92.51B	173.08	3.32%	1.84%	20.40%	57.80%
OHI	74 Outperform	$10.67B	25.19	10.02%	7.08%	9.90%	56.41%
DOC	68 Neutral	$12.95B	50.67	3.29%	6.63%	23.82%	-37.59%
VTR	63 Neutral	$29.70B	339.20	0.80%	2.77%	9.48%	―
Sector *	61 Neutral	$4.24B	15.87	-3.65%	12.20%	6.29%	-21.37%
HR	53 Neutral	$5.32B	―	-10.95%	8.18%	-5.62%	-140.10%

* Real Estate Sector Average

Performance Comparison

VTR

Ventas

66.11

25.14

61.36%

DOC

Healthpeak Properties

18.16

0.92

5.34%

WELL

Welltower

142.67

55.45

63.57%

OHI

Omega Healthcare

37.85

9.67

34.32%

Healthcare Realty Trust

15.40

2.50

19.38%

CTRE

CareTrust REIT

28.07

5.52

24.48%

Ventas Earnings Call Summary

Earnings Call Date: Feb 12, 2025 | % Change Since: 11.07% | Next Earnings Date: Apr 30, 2025

Earnings Call Sentiment Positive

The earnings call reflects a positive outlook for Ventas, with strong performance in senior housing driving significant growth in NOI and FFO per share. Record investments and a dividend increase underscore the company's confidence in its strategy and market position. However, challenges in medical office occupancy and potential NIH funding concerns present some headwinds. Overall, the sentiment leans toward optimism with a focus on strategic growth and financial strength.

Highlights

Strong Senior Housing Performance

Shop same-store cash NOI grew nearly 16%, marking the third consecutive year of double-digit growth. Full-year same-store shop occupancy increased by 300 basis points, outperforming market benchmarks.

Record Investment in Senior Housing

Ventas completed over $2 billion in accretive investments focused on senior housing, with $1.4 billion closed in the fourth quarter alone. These investments are expected to yield 7-8% in the first year.

FFO Per Share Exceeds Guidance

Normalized FFO per share for 2024 was $3.19, exceeding the high end of the guidance range. 2025 guidance anticipates further growth with a midpoint of 7% year-over-year increase.

Dividend Increase

Ventas announced a 7% increase in quarterly dividends, reflecting confidence in continued strong performance and cash flow growth.

Improved Leverage and Liquidity

Net debt to EBITDA improved to 6.0 times, entering the long-term target range, with nearly $4 billion in liquidity by the end of 2024.

Lowlights

Medical Office Building Occupancy Challenges

The medical office segment experienced occupancy declines, raising questions about the trajectory and expectation of occupancy gains in 2025.

Potential NIH Funding Concerns

Concerns about potential changes in NIH funding due to policy shifts, although currently halted, could impact the research portfolio.

Rising Interest Expenses

2025 guidance includes an increase in net interest expense by $0.08 per share compared to 2024, due to refinancing maturing debt at higher rates and lower cash balances.

Company Guidance

During the Ventas earnings call, the company provided guidance for 2025, highlighting several key financial metrics and strategic objectives. Ventas anticipates normalized FFO per share growth of 7% at the midpoint, driven by strong performance in their senior housing segment, which is expected to account for over 50% of NOI by year-end. In 2024, the company achieved a full-year normalized FFO per share of $3.19, surpassing their guidance. They reported a nearly 8% total company same-store cash NOI growth, with shop same-store cash NOI increasing by 16%. Ventas also completed $2 billion in senior housing investments, contributing to a significant scale increase to $2.2 billion in annualized EBITDA. Looking ahead, the company plans to continue leveraging its competitive advantages in senior housing, targeting $1 billion in accretive senior housing investments in 2025, while maintaining a focus on enhancing financial strength and flexibility. Additionally, Ventas increased their quarterly dividend by 7%, reflecting confidence in their growth trajectory.

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.