Is Ventas Stock Still Worth Watching After a 23% Rally in 2025?

Wondering what to do with Ventas stock? You are not alone. Over the past year, Ventas has caught the attention of investors, with its share price climbing 13.8% and a striking 23.4% rally year-to-date. If you zoom out even further, the five-year gain of 107.9% makes it hard to ignore for anyone building a portfolio for long-term growth. Even though the latest seven-day return is just 0.1%, that is not unusual after periods of strong performance, and many investors are watching closely to see if this momentum holds.

Recent news has not brought any major surprises but does help explain the steady inflows into the stock. Market participants have taken note of shifts in the healthcare real estate market, with industry sentiment gradually turning more positive. As confidence grows in the sector, it is no wonder Ventas’s valuation is under the microscope. It sits at a value score of 3 out of 6, suggesting the company is undervalued in half of the checks analysts typically use. This is neither a deep bargain nor aggressively priced, so it is crucial to dig deeper into what these checks actually mean for you as an investor.

Let’s break down each of the six key valuation approaches commonly used by market analysts to see where Ventas stands. Stay tuned, because later on we will look at a more insightful way of understanding valuation that can really change how you think about the company's future.

Why Ventas is lagging behind its peers

Approach 1: Ventas Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates the value of a company by projecting its future adjusted funds from operations and discounting those cash flows back to their present value. This is a staple method for getting to the heart of what a business is fundamentally worth, beyond the market’s mood swings.

For Ventas, analysts calculate the company’s latest twelve-month Free Cash Flow at $1.31 billion. Over the next decade, this figure is forecast to grow steadily, reaching an estimated $2.96 billion by 2035. It is important to note that while analysts only supply estimates for up to 2029 ($2.11 billion), later years are extrapolated using industry-standard forecasts.

Based on this model, Ventas’s intrinsic value is calculated at $103.34 per share. With the current trading price approximately 30.8 percent below this DCF-derived value, the model indicates that Ventas is substantially undervalued at present. This discount may represent a potential opportunity for investors seeking value in a market that is showing renewed interest in healthcare real estate.

Result: UNDERVALUED

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

Our Discounted Cash Flow (DCF) analysis suggests Ventas is undervalued by 30.8%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Ventas Price vs Sales

For companies in the healthcare real estate sector like Ventas, the Price-to-Sales (PS) ratio is a particularly useful valuation metric. This is because, even when profits can be volatile or influenced by unique accounting factors, revenues tend to reflect the underlying scale and health of a business. The PS ratio helps investors compare companies on a level playing field. As a result, it is well-suited for understanding the value of profitable real estate investment trusts.

Typically, higher growth expectations or lower business risks justify a higher PS ratio. Conversely, slower growth and higher risks push this figure downward. This gives investors a framework for what is considered a “normal” or “fair” multiple, but it is important to apply it carefully to each company’s context.

Ventas is currently trading at a PS ratio of 6.16x. For reference, the industry average stands at 6.36x, while its peer group averages 7.60x. This puts Ventas slightly below both benchmarks, suggesting the market may be cautious or not fully appreciating the company’s revenue outlook.

However, rather than relying solely on broad industry or peer group multiples, Simply Wall St uses a proprietary "Fair Ratio." This measure takes into account factors such as Ventas’s earnings growth, profit margins, market cap, overall risks, and its position within the industry. In this case, the Fair Ratio for Ventas is calculated at 5.95x. Because this is specifically tailored to Ventas’s unique profile, it provides a more accurate picture of how the market should value the stock.

Comparing Ventas’s actual PS ratio of 6.16x with the Fair Ratio of 5.95x, the difference is less than 0.10. This suggests the stock is trading at about its fair value based on revenues and fundamental characteristics.

Result: ABOUT RIGHT

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

Upgrade Your Decision Making: Choose your Ventas Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let’s introduce you to Narratives. A Narrative is simply your story or perspective about a company; the reasons you believe certain numbers for future revenue, profit margins, or fair value are reasonable. Unlike static metrics, Narratives connect the company’s real-world story, your forecast, and your estimate of what the business is truly worth, all in one place.

On Simply Wall St’s Community page, millions of investors use Narratives as an accessible tool to express their outlooks and update them as new news, reports, or earnings are released. By connecting your Narrative to live price and fair value data, you can quickly see whether Ventas is priced above or below your expectations, and decide if it is time to buy, sell, or wait. For example, some investors take a bullish view and set a high fair value for Ventas based on accelerating demand for senior housing; others are more cautious, focusing on earnings risks and projecting much lower values. Narratives make the whole decision process more insightful and dynamic, empowering you to invest with clarity and confidence.

Do you think there's more to the story for Ventas? Create your own Narrative to let the Community know!

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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