A Look at CareTrust REIT’s Valuation After UK Care Home Acquisition Expands Its International Healthcare Portfolio

CareTrust REIT (NYSE:CTRE) just took a meaningful step in its international strategy by acquiring two UK care homes for $27 million. This move locks in long-term, escalating leases that support consistent revenue streams.

See our latest analysis for CareTrust REIT.

This move comes on the heels of CareTrust REIT’s recent U.K. acquisition and May’s Care REIT deal, along with a planned CFO transition next year. While the company’s one-year total shareholder return of 22% underscores strengthening momentum, its latest share price of $35.49 points to investors recognizing growth potential across its expanding U.S. and U.K. healthcare portfolio.

If global expansion stories like CareTrust REIT’s have your attention, it could be the right moment to broaden your scope and discover fast growing stocks with high insider ownership

With shares up over 22% in the past year and trading less than 6% below analyst targets, is CareTrust REIT undervalued, or is the market already factoring in its next phase of international growth?

Most Popular Narrative: 5.5% Undervalued

With the most widely tracked narrative fair value landing at $37.56, CareTrust REIT’s last close of $35.49 suggests room for further upside. This is despite the share price already reflecting recent growth momentum. Market participants are evaluating whether expanding margins and significant revenue growth forecasts can push the stock higher from this point.

“The expanded investment pipeline of approximately $600 million, mainly in skilled nursing, seniors housing, and U.K. care homes, gives strong visibility into continued external growth, bolstering FFO and supporting durable, long-term dividend increases.”

Read the complete narrative.

Want to know the secret behind this value premium? The narrative features bold financial projections, aggressive portfolio moves, and a path to higher margins. Which assumptions drive this optimistic outlook, and what future performance benchmarks are embedded in the consensus? Only by reading the full analysis can you uncover the numbers and logic behind this forecast.

Result: Fair Value of $37.56 (UNDERVALUED)

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

However, risks remain, including challenges integrating new acquisitions and potential regulatory shifts in care home markets. Both of these factors could impact future returns.

Find out about the key risks to this CareTrust REIT narrative.

Another View: DCF Model Suggests Even Greater Upside

While analyst targets see modest upside, the SWS DCF model tells a different story. It values CareTrust REIT at $57.95 per share, which is nearly 63% above the current market price. This signals substantial undervaluation if long-term cash flow forecasts play out. However, how reliable are these growth assumptions?

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

Build Your Own CareTrust REIT Narrative

If you have a different perspective or would rather dive into the numbers on your own, it’s quick and easy to craft your own interpretation. Do it your way

A great starting point for your CareTrust REIT research is our analysis highlighting 3 key rewards and 2 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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