CTRE
CareTrust REIT, Inc.
$37.41
Real Estate Investment Trust
85%
P/FFO × Healthcare REIT Multiple
Strong
·
Conviction
Undervalued
Trading 42.2% below fair value
You pay
$37.41
Bear
$52.97
Fair
$64.75
Bull
$76.54
Bear
$52.97
+41.6%
$1.75 FFO × 18x
Fair
$64.75
+73.1%
$1.75 FFO × 23x
Bull
$76.54
+104.6%
$1.75 FFO × 29x
Adjust Assumptions
23.4x
$
Key Value Driver
FFO/share ($1.75) × healthcare P/FFO multiple
Implied Market Multiple
21.4x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (19 analysts)
$44.43
Divergence from AlphaVal
46%
Summary
At $1.75 FFO/share with a 23x healthcare REIT multiple, the base-case value is $64.75 per share. Dividend yield: 4.0%. DDM cross-check: $120.25.
Warnings
Standard profit figures are misleading for real estate companies — large non-cash accounting charges make profits look artificially low. Dividend yield and funds from operations are better measures.
Dividend-based valuation: $120.25 (86% above our primary estimate). Large gaps suggest the dividend may not fully reflect the company's value.
Wall Street's average price target is $44.43 (from 19 analysts). Our estimate is 46% above the consensus -- consider that gap carefully.
Key Risks
- P/E and EV/EBITDA are structurally wrong for REITs — use P/FFO and NAV
- Interest rate sensitivity: REIT multiples compress when rates rise
- FFO approximation (NI + D&A) may include gains on property sales — verify