Assessing NorthWest Healthcare Properties REIT (TSX:NWH.UN) Valuation After Q3 2025 Results and Strategic Updates

NorthWest Healthcare Properties Real Estate Investment Trust (TSX:NWH.UN) just released its Q3 2025 earnings report, highlighting a clear turnaround in net income and a renewed focus on operational efficiency. These results drew investor attention for good reason.

See our latest analysis for NorthWest Healthcare Properties Real Estate Investment Trust.

Following its turnaround in quarterly results, NorthWest Healthcare Properties REIT has seen clear momentum in the share price, notching a 23.1% year-to-date share price return and a total shareholder return of 18.7% over the past year. Ongoing strategic moves such as the Vital Trust internalization and portfolio simplification appear to be boosting investor confidence and suggest continued recovery potential, even as the company rebuilds from longer-term declines.

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With shares still trading at a notable discount to intrinsic value, investors may wonder if NorthWest Healthcare Properties REIT is still undervalued or if recent gains mean the market is now fully pricing in future growth potential.

Price-to-Earnings of 27.6x: Is it justified?

At a current price-to-earnings (P/E) ratio of 27.6x, NorthWest Healthcare Properties REIT trades above both its sector and peer averages, despite its recent return to profitability. The last closing price was CA$5.49, positioning the company as more expensive than most of its industry.

The P/E ratio measures how much investors are willing to pay today for a dollar of future earnings. In the context of a REIT, it is especially significant because it signals whether the market anticipates ongoing profit improvements or is cautious about sustainability. For NorthWest Healthcare Properties REIT, the elevated multiple implies shareholders are factoring in material earnings growth or a shift in future fundamentals.

Compared to the Global Health Care REITs industry average of 25.1x and a peer group average of 6.8x, NorthWest's P/E is notably higher. Against the estimated fair P/E of 23x for the stock, the market is currently applying a premium that could signal either over-optimism or a justified re-rating if projected earnings materialize.

Explore the SWS fair ratio for NorthWest Healthcare Properties Real Estate Investment Trust

Result: Price-to-Earnings of 27.6x (OVERVALUED)

However, ongoing revenue declines and the company’s lackluster multi-year total returns remain risks that could affect investor sentiment in the future.

Find out about the key risks to this NorthWest Healthcare Properties Real Estate Investment Trust narrative.

Another View: Discounted Cash Flow Perspective

While NorthWest Healthcare Properties REIT currently trades at a premium to industry peers based on its price-to-earnings ratio, our DCF model suggests a different story. The SWS DCF model estimates fair value at CA$8.27, which is 33.6% above the current price. This signals significant undervaluation from a cash flow standpoint. Could this mean the rally is only getting started?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out NorthWest Healthcare Properties Real Estate Investment Trust for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 877 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own NorthWest Healthcare Properties Real Estate Investment Trust Narrative

If you prefer your own analysis or want to look beyond these numbers, you can dive into the data and develop your own insights in just a few minutes with Do it your way.

A great starting point for your NorthWest Healthcare Properties Real Estate Investment Trust research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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