Is LTC Properties Fairly Priced After 7.5% Share Rally in 2025?

• Wondering if LTC Properties is currently a good value or just another stock story? You are not alone, and understanding where it stands today could make a real difference for your portfolio.
• Shares have been quietly ticking upward, rising 2.1% over the past week and 7.5% so far this year. This hints at renewed interest and possibly shifting risk perceptions in the market.
• There has also been heightened chatter around regulatory updates and portfolio acquisitions, which are fueling optimism about steady income streams and operational stability. Investors seem to be watching closely as these moves could reshape long-term prospects for LTC Properties.
• On Simply Wall St’s valuation scorecard, LTC Properties scores just 2 out of 6. We will dig into what that means using several analysis methods, and by the end of this article, we will highlight an even smarter approach to understanding LTC’s true value.

LTC Properties scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: LTC Properties Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates a company's intrinsic value by projecting its future cash flows, primarily adjusted funds from operations, and discounting those cash flows back to today's dollars. This approach helps investors gauge whether the stock is trading below or above its theoretical fair value.

For LTC Properties, the latest reported Free Cash Flow stands at $123.43 million. Analyst estimates, combined with Simply Wall St’s long-term projections, suggest a steady increase in these figures over the next decade, reaching around $228.26 million by 2035. While analyst data extends only five years and is followed by extrapolations, the growth outlook provides some confidence in the long-term fundamental strength of the company.

Based on this DCF analysis, the intrinsic fair value of LTC Properties shares is estimated at $76.70. With the current trading price implying a 52.3% discount, the model indicates the stock is significantly undervalued relative to these cash flow projections.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests LTC Properties is undervalued by 52.3%. Track this in your watchlist or portfolio, or discover 927 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for LTC Properties.

Approach 2: LTC Properties Price vs Earnings

For companies that are consistently profitable, the Price-to-Earnings (PE) ratio is a widely used and reliable way to determine value. The PE ratio reflects what investors are willing to pay today for a dollar of future earnings, providing perspective on expectations for growth, stability, and risk. Typically, a higher PE is justified for companies with strong profit outlooks or lower risk, while elevated ratios can also signal over-optimism or market hype.

LTC Properties currently trades at a PE ratio of 52.4x, which stands out when compared to the Health Care REITs industry average of 25.9x and a peer average of 27.4x. At first glance, this puts the company at a premium valuation relative to others in its space, raising questions about whether the stock is priced too richly for its actual prospects.

However, Simply Wall St provides a proprietary “Fair Ratio” for LTC Properties of 47.2x. Unlike a basic industry or peer comparison, the Fair Ratio takes a much more nuanced view, accounting for not just earnings growth and sector trends but also the company’s risk profile, profit margin, and market cap. This makes it a more tailored and thus more relevant benchmark for valuation decisions.

Since the current PE ratio (52.4x) is noticeably above the Fair Ratio (47.2x), this analysis suggests the stock is somewhat overvalued based on its earnings power and individual characteristics.

Result: OVERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1433 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your LTC Properties Narrative

Earlier we mentioned that there's an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is simply your story or perspective behind a company's numbers, such as your view on future revenue growth, profit margins, and what you think the stock is really worth.

Narratives link the company’s story to your own financial forecast and then to a fair value, making it easier to see how your expectations stack up against the market price. This approach is available on Simply Wall St’s Community page, a popular tool used by millions of investors to frame their decisions.

With Narratives, you can quickly see whether you would buy, hold, or sell based on your assumptions by directly comparing your Fair Value estimate with the current share price. In addition, as new financials or news updates are published, Narratives are dynamically refreshed, keeping your insights and fair value estimates up to date.

For instance, some investors believe LTC Properties deserves a bullish valuation thanks to strong operator partnerships and expanding senior housing, while others are more cautious, favoring a lower price target due to rising debt costs and tenant risks. Try building your own Narrative to see if the market agrees with your story, or if you identify a unique opportunity others have missed.

Do you think there's more to the story for LTC Properties? Head over to our Community to see what others are saying!

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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