CareTrust REIT, Inc. (CTRE) | Investment Case

1. Company Snapshot

1.a. Company Description

CareTrust 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.

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1.b. Last Insights on CTRE

CareTrust REIT's recent performance was driven by strong operational and financial results, including rising EBITDARM coverage and decreasing net debt to annualized EBITDA. Accretive acquisitions, such as the recent purchase of 12 skilled nursing facilities and one skilled nursing campus for $437 million, fueled growth. The company's aging demographics and international diversification also present opportunities, particularly with the US and UK's growing need for skilled nursing facilities. Additionally, CareTrust's entry into the senior housing operating portfolio (SHOP) with the acquisition of three Texas senior living communities further expands its portfolio.

1.c. Company Highlights

Last Price	37.7
Change Percentage	-0.17%
Open	37.78
Previous Close	37.77
Market Cap ( Millions)	7290
Volume	1143945
Year High	38.32
Year Low	24.79
M A 50	35.44
M A 200	31.44

FCF Yield	4.59%
Dividend Yield	3.44%
ROE	7.96%
Debt / Equity	22.38%
Net Debt / EBIDTA	47.84%
Price To Book	2.0
Price Earnings Ratio	30.54
Price To FCF	21.8
Price To sales	20.69
EV / EBITDA	19.71

2. CareTrust REIT's Q3 Earnings: A Strong Performance

CareTrust REIT reported a robust financial performance in Q3, with normalized FFO per share of $0.45, representing an 18.4% increase over the prior year quarter. The company's normalized FFO increased 55.5% to $94.7 million. The actual EPS came in at $0.45, slightly below estimates of $0.47. Revenue growth is expected to continue, with analysts estimating a 21.9% increase next year.

Publication Date: Nov -09

                                    📋 Highlights
                                    FFO Growth Surpasses 18%:
                                                Normalized FFO per share reached $0.45, reflecting 18% YoY growth with $94.7M total normalized FFO.
$1.6B Year-to-Date Investments:
                                                Closed $495M in Q3, bringing annual investments to over $1.6B, with $600M active pipeline (33% in UK).
Strong Liquidity Position:
                                                Maintained $334M cash on hand, $1.2B undrawn revolver, and low net debt-to-EBITDA of 0.43x.
Three Growth Engines:
                                                U.K. acquisition (1/3 of pipeline), SHOP (targeting low double-digit IRRs), and portfolio expansion with 8.8% blended yield.
Team Expansion & Tech Investment:
                                                Added data science capabilities and 2-3 hires planned for SHOP platform, enhancing operator relationships and deal structuring.

                                

Investment Growth and Pipeline

The company closed on $495 million of new investments during the quarter, bringing the year-to-date total to over $1.6 billion. The pipeline continues to accelerate, with a current total of $600 million, including a growing presence in the U.K. market. As James Callister noted, "We're seeing sustained deal flow across skilled nursing and seniors housing sectors, including both triple net and SHOP formats." This growth is expected to continue, driven by the company's disciplined underwriting approach and strong operator relationships.

Financial Position and Leverage

CareTrust REIT's financial position remains strong, with approximately $334 million of cash on hand and full capacity available on its $1.2 billion revolver. The company's net debt-to-EBITDA ratio stands at 0.43x, and its fixed charge coverage ratio is 11x. The company has also entered into interest rate swaps to fix the rate on its $500 million term loan for a period of 3 years, resulting in a go-forward all-in rate of 4.6%.

Valuation and Growth Prospects

CareTrust REIT's current valuation metrics suggest a relatively high P/E ratio of 29.31 and an EV/EBITDA ratio of 19.67. These metrics imply that the market is pricing in significant growth prospects for the company. With a strong pipeline and growing presence in new markets, including the U.K. and SHOP segments, the company is well-positioned to deliver on these expectations. As David Sedgwick noted, the company is "more bullish than ever" on its growth prospects, with a target of delivering a better growth story to investors while maintaining a high rate of growth in the near term.

3. NewsRoom

CareTrust REIT Enters SHOP; Acquires Three Senior Living Communities

Dec -01

Source: businesswire.com

Reviewing Ventas (NYSE:VTR) and CareTrust REIT (NYSE:CTRE)

Nov -29

Source: defenseworld.net

Nursing Facility Stock Rallies Amid Medicaid Spending Woes

Nov -21

Source: investors.com

CareTrust REIT: Strength In Operational Abilities And A Next-Decade Theme

Nov -07

Source: seekingalpha.com

CareTrust REIT, Inc. (CTRE) Q3 2025 Earnings Call Transcript

Nov -07

Source: seekingalpha.com

CareTrust REIT (CTRE) Q3 FFO Lag Estimates

Nov -06

Source: zacks.com

CareTrust REIT Announces Third Quarter 2025 Operating Results

Nov -05

Source: businesswire.com

CareTrust REIT Announces $437 Million of Acquisitions

Nov -05

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.59%)

6. Segments

Rental

Expected Growth: 7.5%

CareTrust REIT's 7.5% rental growth is driven by a strong demand for senior housing and healthcare facilities, fueled by an aging population and increasing healthcare spending. Additionally, the company's strategic acquisitions and investments in high-quality properties, as well as its focus on operator diversification, contribute to its growth momentum.

Interest and Other

Expected Growth: 8.5%

CareTrust REIT's 8.5% growth in Interest and Other is driven by increasing investment in high-yielding debt securities, expansion of its mortgage loan portfolio, and rising interest income from its real estate investments. Additionally, the company's strategic partnerships and joint ventures contribute to the growth, along with its focus on diversifying its revenue streams.

7. Detailed Products

Skilled Nursing Facilities

CareTrust REIT, Inc. invests in skilled nursing facilities that provide 24-hour skilled care and rehabilitation services to patients who require intensive therapy and nursing care.

Assisted Living Facilities

CareTrust REIT, Inc. invests in assisted living facilities that provide supportive care and services to seniors who require assistance with daily living activities.

Memory Care Facilities

CareTrust REIT, Inc. invests in memory care facilities that provide specialized care and services to individuals with Alzheimer's disease and other forms of dementia.

Independent Living Facilities

CareTrust REIT, Inc. invests in independent living facilities that provide housing and amenities to seniors who are able to live independently.

8. CareTrust REIT, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

CareTrust REIT, Inc. operates in a niche market, providing real estate solutions to healthcare operators. While there are substitutes available, the company's focus on healthcare real estate and its expertise in the field reduce the threat of substitutes.

Bargaining Power Of Customers

CareTrust REIT, Inc.'s customers are primarily healthcare operators, who have limited bargaining power due to the specialized nature of the company's services.

Bargaining Power Of Suppliers

CareTrust REIT, Inc. has a diversified supplier base, which reduces the bargaining power of individual suppliers. Additionally, the company's scale and expertise in healthcare real estate give it an upper hand in negotiations with suppliers.

Threat Of New Entrants

The healthcare real estate market has high barriers to entry, including regulatory hurdles and the need for specialized expertise. This limits the threat of new entrants and gives CareTrust REIT, Inc. a competitive advantage.

Intensity Of Rivalry

The healthcare real estate market is moderately competitive, with a few established players. While there is some rivalry, CareTrust REIT, Inc.'s focus on healthcare real estate and its expertise in the field help it to differentiate itself from competitors.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	29.60%
Debt Cost	9.20%
Equity Weight	70.40%
Equity Cost	9.20%
WACC	9.20%
Leverage	42.04%

11. Quality Control: CareTrust REIT, Inc. passed 4 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Omega Healthcare

A-Score: 6.8/10

Value: 3.5

Growth: 3.0

Quality: 8.5

Yield: 10.0

Momentum: 6.0

Volatility: 10.0

1-Year Total Return ->

National Health Investors

A-Score: 6.7/10

Value: 3.0

Growth: 4.3

Quality: 8.1

Yield: 9.0

Momentum: 6.0

Volatility: 10.0

1-Year Total Return ->

CareTrust REIT

A-Score: 6.7/10

Value: 2.2

Growth: 4.4

Quality: 7.9

Yield: 9.0

Momentum: 7.0

Volatility: 9.7

1-Year Total Return ->

Sabra Health Care REIT

A-Score: 6.5/10

Value: 4.1

Growth: 3.4

Quality: 6.8

Yield: 10.0

Momentum: 5.0

Volatility: 9.7

1-Year Total Return ->

Healthcare Realty Trust

A-Score: 5.9/10

Value: 4.4

Growth: 2.9

Quality: 3.3

Yield: 10.0

Momentum: 6.0

Volatility: 9.0

1-Year Total Return ->

Ventas

A-Score: 5.4/10

Value: 1.3

Growth: 3.6

Quality: 4.2

Yield: 7.0

Momentum: 7.0

Volatility: 9.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

10.08%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.20%

CareTrust REIT, Inc. - US14174T1079

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on CTRE

1.c. Company Highlights

Better Quality

Expensive

Strong Momentum

Earnings Miss

Revenues Beats

Medium Volatility

Revenues Miss

Less Volatile

Stable Momentum

2. CareTrust REIT's Q3 Earnings: A Strong Performance

Investment Growth and Pipeline

Financial Position and Leverage

Valuation and Growth Prospects

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.59%)

6. Segments

Rental

Expected Growth: 7.5%

Interest and Other

Expected Growth: 8.5%

7. Detailed Products

Skilled Nursing Facilities

Assisted Living Facilities

Memory Care Facilities

Independent Living Facilities

8. CareTrust REIT, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: CareTrust REIT, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

37.7$

Current Price

37.7$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA