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	39.94
Change Percentage	1.45%
Open	39.07
Previous Close	39.37
Market Cap ( Millions)	7723
Volume	1682860
Year High	41.72
Year Low	25.5
M A 50	38.11
M A 200	34.49

FCF Yield	4.91%
Dividend Yield	3.36%
ROE	8.99%
Debt / Equity	22.16%
Net Debt / EBIDTA	150.66%
Price To Book	2.2
Price Earnings Ratio	27.75
Price To FCF	20.37
Price To sales	19.45
EV / EBITDA	18.22

2. CareTrust REIT's Strong 2025 Performance Sets Stage for Continued Growth

CareTrust REIT reported a robust financial performance in 2025, with normalized FFO per share increasing 17.3% to $1.76. The company's actual EPS of $0.47 beat estimates, although it was in line with expectations. Revenue growth was substantial, driven by total investments of $1.8 billion, surpassing the previous year's record. The company's focus on expanding its UK care home presence and SHOP deals contributed to the strong performance.

Publication Date: Feb -15

                                    📋 Highlights
                                    Total Investments:
                                                surged to $1.8 billion in 2025, surpassing 2024’s record and driving 17.3% normalized FFO per share growth.
FFO Guidance:
                                                for 2026 is $1.90–$1.95/share, reflecting continued expansion after 2025’s $1.76/share (up 17.3% YoY).
Acquisition Pipeline:
                                                stands at $500 million, with 50% UK care homes, 33% US skilled nursing, and 17% SHOP deals.
Q4 2025 Performance:
                                                saw normalized FFO jump 42.7% to $104.1 million and FAD rise 38.7% to $103 million.
SHOP Deals:
                                                (Skilled Nursing) saw $215 million in 2026 deals already, with cap rates compressing due to increased competition.

                                

Operational Highlights

The company's operational momentum is expected to continue, with a strong pipeline of $500 million in potential investments. James B. Callister noted that the pipeline is diverse, comprising UK care homes, US skilled nursing, and SHOP deals. David M. Sedgwick stated that their operating DNA and deep experience in skilled nursing inform how they underwrite, vet operators, and asset manage, providing a deeper level of expertise.

Growth Prospects

Analysts estimate next year's revenue growth at 11.9%, indicating a continued upward trajectory. The company's guidance for fiscal year 2026 is $1.90 to $1.95 in normalized FFO per share. With a deeper and more capable team, CareTrust REIT is poised to capitalize on emerging opportunities in the care home and SHOP sectors.

Valuation

CareTrust REIT's current valuation multiples are noteworthy, with a P/E Ratio of 32.41 and a P/B Ratio of 2.1. The Dividend Yield is 3.35%, indicating a relatively attractive return for income investors. The EV/EBITDA ratio is 19.74, suggesting that the company's enterprise value is reasonable relative to its earnings before interest, taxes, depreciation, and amortization.

Funding Future Growth

Derek J. Bunker stated that the company will likely continue to use a mix of equity issuances and balance sheet capacity to fund future external growth. With a strong financial position, CareTrust REIT is well-positioned to take advantage of favorable capital markets and explore alternative funding sources, such as the bond market.

3. NewsRoom

CareTrust REIT (NASDAQ:CTRE) Sets New 1-Year High – Time to Buy?

Mar -01

Source: defenseworld.net

CareTrust REIT: Upgraded As The Senior & Skilled Nursing Niche Keeps Bulls Charging

Feb -26

Source: seekingalpha.com

Contrasting CareTrust REIT (NYSE:CTRE) & Industrial Logistics Properties Trust (NASDAQ:ILPT)

Feb -24

Source: defenseworld.net

Head to Head Review: Claros Mortgage Trust (NYSE:CMTG) vs. CareTrust REIT (NYSE:CTRE)

Feb -22

Source: defenseworld.net

CareTrust REIT: Normalized FFO Growth Continues Amid Attractive Investment Spreads

Feb -15

Source: seekingalpha.com

CareTrust REIT, Inc. (CTRE) Q4 2025 Earnings Call Transcript

Feb -13

Source: seekingalpha.com

CareTrust REIT (CTRE) Matches Q4 FFO Estimates

Feb -13

Source: zacks.com

CareTrust REIT Announces Fourth Quarter & Full Year 2025 Operating Results

Feb -12

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

CareTrust REIT

A-Score: 7.1/10

Value: 2.5

Growth: 3.9

Quality: 8.3

Yield: 9.0

Momentum: 9.0

Volatility: 10.0

1-Year Total Return ->

Omega Healthcare

A-Score: 6.9/10

Value: 2.9

Growth: 3.0

Quality: 7.3

Yield: 10.0

Momentum: 8.0

Volatility: 10.0

1-Year Total Return ->

Sabra Health Care REIT

A-Score: 6.8/10

Value: 4.0

Growth: 3.4

Quality: 6.8

Yield: 10.0

Momentum: 7.0

Volatility: 9.7

1-Year Total Return ->

National Health Investors

A-Score: 6.8/10

Value: 2.8

Growth: 4.4

Quality: 7.6

Yield: 9.0

Momentum: 7.0

Volatility: 10.0

1-Year Total Return ->

Healthcare Realty Trust

A-Score: 6.4/10

Value: 5.9

Growth: 2.9

Quality: 5.4

Yield: 10.0

Momentum: 5.5

Volatility: 9.0

1-Year Total Return ->

Ventas

A-Score: 5.6/10

Value: 1.4

Growth: 3.6

Quality: 3.2

Yield: 7.0

Momentum: 9.0

Volatility: 9.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

7.40%

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 Strong 2025 Performance Sets Stage for Continued Growth

Operational Highlights

Growth Prospects

Valuation

Funding Future Growth

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

39.94$

Current Price

39.94$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA