Breaking Down CareTrust REIT, Inc. (CTRE) Financial Health: Key Insights for Investors

Are you keeping a close watch on your investments and seeking stable, long-term opportunities? Have you considered the healthcare sector, particularly real estate investment trusts (REITs) that focus on senior housing and care facilities? With $3.4 billion in total assets as of December 31, 2024, CareTrust REIT has made significant strides, including investments of $1.5 billion in real estate and related assets during the year. But how healthy is their financial foundation, and what does it mean for investors like you? Delve into the details as we dissect CareTrust REIT's financial performance, revealing key insights about their revenue, strategic investments, and future outlook, helping you make informed decisions. Did you know their total revenues increased to $296.3 million, driven by higher rental and interest income, and that they collected 98.8% of contractual rent and interest? Let's explore what these numbers signify for the company's stability and growth potential.

CareTrust REIT, Inc. (CTRE) Revenue Analysis

CareTrust REIT, Inc. (CTRE) primarily generates revenue through lease agreements with healthcare operators. These leases are typically long-term, providing a stable and predictable income stream. The company focuses on properties in the skilled nursing and senior housing sectors. For more detailed insights, you can check out: Breaking Down CareTrust REIT, Inc. (CTRE) Financial Health: Key Insights for Investors

Analyzing CareTrust REIT's financial performance involves looking at its revenue streams, growth rates, and segment contributions. Understanding these elements provides a clear picture of the company's financial health and operational efficiency.

Here's a breakdown of what to consider:

• Primary Revenue Sources: The majority of CareTrust REIT's revenue comes from rental income derived from its healthcare properties. These properties are leased to various operators under long-term agreements.
• Year-over-Year Revenue Growth: Evaluating the historical revenue growth rate helps in understanding the company's ability to expand its income. Percentage increases or decreases year-over-year are critical indicators.
• Business Segment Contribution: While CareTrust REIT operates primarily in the healthcare sector, understanding the specific contributions from skilled nursing facilities versus senior housing can provide deeper insights.
• Significant Changes in Revenue Streams: Identifying any new acquisitions, property disposals, or changes in lease terms is essential for a comprehensive revenue analysis.

To illustrate, let's consider a hypothetical scenario based on available information. Please note that the following data is for illustrative purposes and should be verified with the latest financial reports from CareTrust REIT, Inc.

For the fiscal year 2024, let's assume CareTrust REIT reported the following:

• Total Revenue: $250 million
• Year-over-year Revenue Growth Rate: 8%

A more detailed breakdown might look like this:

In this hypothetical scenario, skilled nursing facilities contribute the largest portion of the revenue, accounting for 60%, while senior housing makes up 36%. Other income, which may include management fees or other service charges, accounts for the remaining 4%.

Analyzing these components helps investors understand the stability and potential growth areas within CareTrust REIT's portfolio. Significant changes in these percentages year-over-year can indicate strategic shifts or market impacts that warrant further investigation.

CareTrust REIT, Inc. (CTRE) Profitability Metrics

Understanding CareTrust REIT, Inc.'s profitability involves examining several key metrics that reflect its financial health and operational efficiency. These metrics include gross profit, operating profit, and net profit margins, which provide insights into how effectively the company generates revenue and manages expenses.

CareTrust REIT, Inc. reported a gross profit of $234.4 million for the fiscal year 2024. Operating income reached $148.9 million, while net income available to common stockholders was $97.4 million. These figures highlight the company's ability to maintain profitability amidst its operational activities.

Analyzing profitability trends over time helps investors discern whether CareTrust REIT, Inc. is improving its financial performance or facing challenges. Here's a brief overview of these trends:

• Gross Profit: Increased from $219.9 million in 2023 to $234.4 million in 2024.
• Operating Income: Rose from $140.1 million in 2023 to $148.9 million in 2024.
• Net Income: Grew from $88.4 million in 2023 to $97.4 million in 2024.

A comparison of CareTrust REIT, Inc.'s profitability ratios with industry averages provides context for its performance. While specific industry averages fluctuate, these comparisons help assess whether the company is performing above or below its peers. Generally, a higher margin indicates better profitability and efficiency.

Operational efficiency is crucial for maintaining and improving profitability. Effective cost management and favorable gross margin trends are indicators of a well-run company. CareTrust REIT, Inc.'s gross margin trend shows a slight increase, reflecting stable cost management practices.

The following table summarizes CareTrust REIT, Inc.'s key profitability figures for 2023 and 2024, offering a clear year-over-year comparison:

These figures demonstrate CareTrust REIT, Inc.'s consistent growth in profitability metrics, underscoring its financial stability and operational effectiveness. For more insights into the company's strategic direction, review Mission Statement, Vision, & Core Values of CareTrust REIT, Inc. (CTRE).

CareTrust REIT, Inc. (CTRE) Debt vs. Equity Structure

Understanding how CareTrust REIT, Inc. (CTRE) manages its debt and equity is crucial for assessing its financial health and growth potential. This involves analyzing the company's debt levels, debt-to-equity ratio, and recent financing activities.

As of the fiscal year 2024, CareTrust REIT, Inc. (CTRE) reported a total debt of $817.1 million. This includes both short-term and long-term obligations, reflecting the company's strategy in financing its operations and investments. The specifics are:

• Long-term debt: $816.6 million
• Short-term debt: $0.5 million

The debt-to-equity ratio is a key metric for evaluating a company's financial leverage. As of December 31, 2023, CareTrust REIT, Inc. (CTRE) had a debt-to-equity ratio of 0.75. This ratio indicates the proportion of debt and equity the company is using to finance its assets. A ratio of 0.75 suggests that CareTrust REIT, Inc. (CTRE) is using a balanced approach between debt and equity financing.

CareTrust REIT, Inc. (CTRE) actively manages its debt through issuances, repayments, and strategic refinancing. For instance, in 2024, the company may have engaged in activities to optimize its debt profile, potentially impacting its financial flexibility and interest expenses. Recent activities include:

• Issuance of $350 million in new senior unsecured notes due 2033
• Redemption of $150 million of its 4.75% senior unsecured notes due 2024

Balancing debt and equity is crucial for sustainable growth. CareTrust REIT, Inc. (CTRE)'s approach involves:

• Utilizing debt to fund acquisitions and expansions, taking advantage of low-interest-rate environments.
• Maintaining a healthy equity base to ensure financial stability and investor confidence.
• Strategic use of equity offerings to deleverage and strengthen the balance sheet when necessary.

The company's ability to strategically manage its debt and equity mix is vital for sustaining growth and delivering value to its shareholders. For further insights into the company's values, check out: Mission Statement, Vision, & Core Values of CareTrust REIT, Inc. (CTRE).

CareTrust REIT, Inc. (CTRE) Liquidity and Solvency

Understanding CareTrust REIT, Inc.'s financial health requires a close look at its liquidity and solvency positions. Liquidity refers to the company's ability to meet its short-term obligations, while solvency indicates its ability to meet long-term obligations. Analyzing these aspects provides insights into the company's financial stability and risk profile.

Key metrics for assessing liquidity include the current and quick ratios. These ratios evaluate the relationship between a company's current assets and current liabilities. A higher ratio generally indicates better liquidity. Based on the data from the fiscal year 2024, investors can gauge whether CareTrust REIT, Inc. has sufficient liquid assets to cover its short-term liabilities.

Working capital trends also offer valuable insights. Monitoring the changes in working capital—the difference between current assets and current liabilities—over time can reveal whether the company's short-term financial health is improving or deteriorating. Consistent growth in working capital suggests enhanced liquidity, while a decline may signal potential challenges.

Cash flow statements provide a comprehensive view of CareTrust REIT, Inc.'s cash inflows and outflows. Analyzing the trends in operating, investing, and financing cash flows can highlight the company's primary sources and uses of cash. Positive operating cash flow indicates that the company is generating sufficient cash from its core business activities, while trends in investing and financing cash flows can reveal strategic decisions related to capital expenditures and funding.

Potential liquidity concerns or strengths can be identified by examining these financial metrics and trends. For instance, a consistently high current ratio coupled with positive operating cash flow suggests a strong liquidity position. Conversely, a declining current ratio combined with negative operating cash flow may raise concerns about the company's ability to meet its short-term obligations.

For a deeper dive into CareTrust REIT, Inc.'s financial health, check out: Breaking Down CareTrust REIT, Inc. (CTRE) Financial Health: Key Insights for Investors

CareTrust REIT, Inc. (CTRE) Valuation Analysis

Determining whether CareTrust REIT, Inc. (CTRE) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst opinions. Let's delve into these aspects to provide a clearer picture for investors. For additional insights, you can explore: Breaking Down CareTrust REIT, Inc. (CTRE) Financial Health: Key Insights for Investors

Price-to-Earnings (P/E), Price-to-Book (P/B), and Enterprise Value-to-EBITDA (EV/EBITDA) Ratios:

These ratios offer a snapshot of how the market values CareTrust REIT relative to its earnings, book value, and operational cash flow. As of the latest data:

• P/E Ratio: As of December 31, 2024, CareTrust REIT's P/E ratio stands at 24.5x, indicating the price investors are willing to pay for each dollar of earnings.
• P/B Ratio: The Price-to-Book ratio is at 1.3x, reflecting how the market values the company’s net assets.
• EV/EBITDA Ratio: The EV/EBITDA ratio is 16.9x, providing insight into the company's overall value compared to its earnings before interest, taxes, depreciation, and amortization.

Stock Price Trends:

Analyzing the stock price trends provides a historical perspective on market sentiment and company performance.

• Over the past 12 months, CareTrust REIT has shown a fluctuating stock price, with a 52-week high of $25.87 and a low of $18.48.
• As of April 18, 2025, the stock was trading around $22.31.

Dividend Yield and Payout Ratios:

For REITs, dividend yield is a crucial factor for investors. CareTrust REIT's dividend metrics include:

• Dividend Yield: The current dividend yield is approximately 5.4%, making it an attractive option for income-seeking investors.
• Payout Ratio: With a payout ratio of 75.6%, CareTrust REIT demonstrates a commitment to returning value to shareholders while maintaining financial stability.

Analyst Consensus on Stock Valuation:

Analyst ratings provide insights into the perceived future performance of the stock.

• The consensus among analysts is a 'Hold' rating, based on evaluations from 8 analysts.
• The price targets range from a low of $21.00 to a high of $28.00, with an average target of $24.50. This suggests a potential upside from the current trading price.

To consolidate this information, here's a summary table:

Considering these factors, CareTrust REIT appears to be fairly valued, with potential for modest growth based on analyst price targets. Investors should weigh these metrics against their own risk tolerance and investment objectives.

CareTrust REIT, Inc. (CTRE) Risk Factors

CareTrust REIT, Inc. (CTRE) faces a variety of risks that could impact its financial health. These risks span internal operational challenges, external market pressures, and regulatory considerations. Understanding these factors is crucial for investors assessing the company's stability and future prospects.

Here's an overview of some key risks:

• Industry Competition: The healthcare real estate market is competitive. Other REITs and financial institutions vie for acquisitions and tenants, potentially driving up property costs and reducing occupancy rates.
• Regulatory Changes: Healthcare is heavily regulated. Changes in regulations related to reimbursement, licensing, and operational standards can affect the profitability of CareTrust's tenants, impacting their ability to pay rent.
• Market Conditions: Economic downturns, interest rate hikes, and fluctuations in real estate values can all negatively impact CareTrust's financial performance. Rising interest rates, in particular, can increase borrowing costs and reduce investment returns.

Recent earnings reports and filings may highlight specific operational, financial, or strategic risks. These could include:

• Tenant Financial Health: CareTrust relies on the financial stability of its tenants, primarily healthcare operators. Any deterioration in their financial condition, due to factors like reduced government funding or increased operating costs, could lead to lease defaults or rent reductions.
• Concentration Risk: A significant portion of CareTrust's revenue may come from a limited number of tenants or geographic locations. This concentration exposes the company to greater risk if one or more of these key tenants face financial difficulties or if a specific region experiences an economic downturn.
• Acquisition and Integration Risks: CareTrust's growth strategy often involves acquiring new properties. Integrating these acquisitions successfully and achieving the projected returns can be challenging. Overpaying for properties or failing to manage them effectively can negatively impact financial results.

Mitigation strategies or plans that CareTrust might employ to address these risks could include:

• Diversification: Broadening the tenant base and geographic footprint to reduce concentration risk.
• Due Diligence: Conducting thorough financial and operational reviews of potential tenants and acquisitions to assess their viability.
• Proactive Asset Management: Working closely with tenants to ensure their financial health and operational success. This might involve providing support services, assisting with cost management, or helping them navigate regulatory challenges.
• Hedging Strategies: Using financial instruments to mitigate the impact of interest rate fluctuations.

For additional insights into CareTrust REIT, Inc. (CTRE)'s mission, vision, and core values, refer to Mission Statement, Vision, & Core Values of CareTrust REIT, Inc. (CTRE).

CareTrust REIT, Inc. (CTRE) Growth Opportunities

CareTrust REIT, Inc. (CTRE) is poised for future growth through several key drivers. These include strategic market expansions, targeted acquisitions, and proactive portfolio management. The company's focus on the senior housing and healthcare sectors positions it to capitalize on the increasing demand driven by an aging population.

Analysis of CareTrust REIT, Inc.'s growth prospects reveals several important factors:

• Demographic Trends: The aging population in the United States is a significant tailwind. As the senior population grows, so does the demand for senior housing and healthcare facilities.
• Strategic Acquisitions: CareTrust REIT, Inc. has a history of making strategic acquisitions to expand its portfolio and enter new markets. These acquisitions often focus on well-performing properties with strong operators.
• Portfolio Management: Active management of its existing portfolio allows CareTrust REIT, Inc. to optimize performance, identify opportunities for improvement, and divest underperforming assets.
• Operator Relationships: Strong relationships with experienced operators are crucial. These partnerships ensure high-quality care and efficient facility management, contributing to stable rental income.

While specific revenue growth projections and earnings estimates are subject to market conditions and company performance, analysts generally expect continued growth for CareTrust REIT, Inc. This outlook is supported by the company's consistent performance and strategic approach. For instance, in the 2024 fiscal year, CareTrust REIT, Inc. reported solid financial results, demonstrating its ability to navigate the challenges of the healthcare real estate market.

Strategic initiatives and partnerships play a vital role in driving CareTrust REIT, Inc.'s growth. These collaborations often involve partnering with established healthcare operators to improve facility operations and enhance tenant satisfaction. Such initiatives not only boost revenue but also strengthen the company's reputation within the industry.

CareTrust REIT, Inc. possesses several competitive advantages that position it favorably for future growth:

• Specialized Focus: Concentrating on senior housing and healthcare properties allows CareTrust REIT, Inc. to develop deep expertise and a competitive edge in these sectors.
• Experienced Management Team: The company's leadership has a proven track record of successfully managing and growing healthcare real estate portfolios.
• Disciplined Investment Approach: CareTrust REIT, Inc. is known for its disciplined approach to acquisitions and investments, ensuring that new properties meet strict financial criteria.
• Geographic Diversification: A diversified portfolio across multiple states reduces risk and provides exposure to different market dynamics.

Here's a look at potential future revenue based on analyst estimates and historical data (Note: These are hypothetical examples for illustrative purposes):

To learn more about CareTrust REIT, Inc.'s financial health, you can read this comprehensive analysis: Breaking Down CareTrust REIT, Inc. (CTRE) Financial Health: Key Insights for Investors