Assessing American Healthcare REIT (AHR) Valuation as Shares Gain Nearly 10% Over the Past Quarter

American Healthcare REIT (AHR) shares have been quietly moving, returning nearly 10% over the past 3 months. The company's performance stands out among real estate stocks lately, especially as annual revenue and net income have shown solid growth.

See our latest analysis for American Healthcare REIT.

Over the past year, American Healthcare REIT’s total shareholder return edged up by about 0.7%, while the last quarter’s double-digit share price return signals growing interest and optimism toward its growth narrative. After a relatively flat start to the year, momentum appears to be picking up as investors recalibrate risk and reward in the healthcare real estate space.

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But with shares still trading at a discount to many analysts’ targets, investors must ask: Is American Healthcare REIT currently undervalued, or has the market already factored in all of its expected growth?

Most Popular Narrative: 11.1% Undervalued

With American Healthcare REIT trading at $40.90, the most widely followed narrative sets a fair value at $46.00. This difference points to a potential upside and reflects optimism around robust operational improvements and future profitability, despite recent headwinds and profit margin compression.

The combination of a rapidly growing 80+ demographic and a multi-year period of low new supply in senior housing and skilled nursing is expected to drive a persistent supply-demand imbalance, fueling both occupancy gains and rent growth across American Healthcare REIT's portfolio. This dynamic should underpin above-trend revenue and net operating income growth over the next decade.

Read the complete narrative.

What’s the hidden engine behind this valuation? The narrative leans heavily on a powerful formula: demographics, margin expansion, and high-quality asset growth. Want to see which bold growth assumptions could reframe the entire value story? Unlock the specifics fueling this projection inside the full narrative.

Result: Fair Value of $46.00 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, shifts in government healthcare funding or stalled occupancy growth could challenge American Healthcare REIT’s outlook and limit projected gains.

Find out about the key risks to this American Healthcare REIT narrative.

Another View: Discounted Cash Flow Perspective

While the popular valuation narrative sees American Healthcare REIT as undervalued versus analyst targets, our SWS DCF model takes a different approach. According to this model, shares are actually trading 31.6% below their estimated fair value, suggesting a much larger margin of safety than the multiples-based view. But which scenario will ultimately play out? Are analysts too cautious, or is the market missing something?

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

Build Your Own American Healthcare REIT Narrative

If you want to dig into the numbers yourself or think you have a different take, crafting your own view only takes a few minutes. So why not Do it your way?

A great starting point for your American Healthcare REIT research is our analysis highlighting 2 key rewards and 1 important warning sign 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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