CareTrust REIT CTRE
Real Estate · REIT - Healthcare Facilities · Synthos Deep Dive · 2026-07-06
The Overview
CareTrust is a landlord for healthcare facilities — mostly skilled-nursing homes and seniors housing. It buys the buildings, leases them to operators on long-term "net leases" (the tenant pays taxes, insurance and upkeep), and collects rent. It grows by issuing new shares and using the cash to buy more buildings — and in the last two years it has done a lot of that, roughly doubling its revenue.
The business itself is steady and defensive: people need nursing care in good markets and bad, debt is low, and the dividend (about 3.5% a year) is comfortably paid out of real cash flow. The catch is twofold. First, the growth comes from issuing shares, so your slice per share grows much more slowly than the headline — analysts expect per-share earnings to be nearly flat for the next three years. Second, the stock has already run hard: it sits within 2.5% of its yearly high and momentum gauges say it is overbought. Our verdict is Watch — a good company at an unattractive moment to start buying.
Here's what our three scores mean in everyday terms:
- Downside Risk 5/10 (moderate). Low debt, low volatility, an essential-service tenant base — but those tenants are paid largely by government programs, and if reimbursement rates get squeezed, the rents behind the dividend get squeezed too.
- Growth Quality 6/10 (decent, diluted). The cash flows are real and growing, but the company funds growth by selling new shares, and returns on the money it invests are modest.
- Exponential Potential 2/10 (low). This is an income compounder, not a multiplier. Nothing about the model accelerates.
The one big worry: a squeeze on the operators who pay the rent — through Medicaid/Medicare rate cuts or a large tenant getting into financial trouble — which would threaten both the rent checks and the growth story at the same time.
Putting a number on it: our fair-value estimate is $44 against a current price of $39.03 — real upside if our numbers are right.
Our summary metrics
Beta 0.79, net-debt/EBITDA 1.36x and 5.97x interest coverage are genuinely defensive — but skilled-nursing tenants live on government reimbursement, external growth depends on constant equity issuance, and an RSI-80 entry near the high adds tactical risk.
Revenue +109% FY25 and $394M operating cash flow are real, but growth is bought with equity (shares +134% since FY20), ROE 8.7% / ROIC ~5.6%, and consensus EPS grows only ~4%/yr 2026E-2029E.
A net-lease REIT compounds arithmetically — dividends plus equity-funded acquisitions; consensus shows 5-24% revenue growth years but flat per-share earnings; no exponential mechanics whatsoever.
What does “fair value” mean?
Fair value is Synthos’s estimate of what one share is worth today, based on our model of the company’s future cash generation and the risks to it. It is not a price target or a prediction of where the stock trades next quarter — it’s the price where we think risk and reward are balanced. Above it, you’re paying for outcomes better than our base case; below it, the market is offering a margin of safety.
The model’s inputs and weightings are proprietary — they’re the product. What we publish is the output, plus an independent, public-math cross-check further down the page (“Check our number”) so you can judge it for yourself.
What do the 5 tiers mean? (Core · Tactical · Watch · Hold · Avoid)
Exponential Potential
A net-lease REIT compounds arithmetically — dividends plus equity-funded acquisitions; consensus shows 5-24% revenue growth years but flat per-share earnings; no exponential mechanics whatsoever.
What could take this further than the base case — and where the market may be underpricing it. Full forward-growth and acceleration math in Deeper analysis, §4 below.
Deeper analysis
Technicals, fundamentals, valuation, and the full expert-claim evidence panel — the detail behind the numbers above.
Reference table
| Street consensus | $44.25 (high $47 / low $42; 14 Buy incl. 1 Strong Buy · 4 Hold · 1 Sell) — our anchor here, given no expert panel |
| Valuation | 26.4× trailing GAAP EPS · ~27.7× 2026E · 25.7× 2027E · 24.1× 2028E · EV/EBITDA 21.1× · P/B 2.23× · dividend yield 3.50% |
| Technicals | Strong but stretched — $41.39, −2.5% off the 52-wk high, above 50/200-DMA, RSI 80 (overbought), +34.8% 12-mo (SPY +21.1%) |
| Conviction | Low — 0 KB claims, 0 voices; screen-surfaced, fundamentals-only |
| Position sizing | Income sleeve, 0% today; up to ~1–2% on a pullback toward the 50-DMA (~$39.50) |
What the experts actually said
No independent expert claims in the Synthos knowledge base yet for CTRE — this dive is fundamentals- and technicals-driven, not panel-driven.
Price & moving averages 12 months · 50 & 200-day averages · 52-week range
Solid line = price · dashed line = 50-day average · dotted line = 200-day average · the two thin horizontal lines mark the 52-week high and low. Price above both averages is an uptrend.
Data summary: last close $39.03, 4% below the 50-day average ($41), 0% above the 200-day average ($39) — a mixed trend. 10% below the 52-week high of $43, 19% above the 52-week low of $33.
Bollinger Bands 20-day average ± 2 standard deviations
The shaded band widens when the stock gets more volatile. Riding the upper edge = strong momentum (sometimes stretched); the lower edge = weak / potentially oversold.
Data summary: price $39.03 is currently inside the band (band $38–$42).
RSI (14) momentum gauge · 0–100
Above 70 (overbought zone, shaded) = overbought, below 30 (oversold zone, shaded) = oversold. Currently 39.
MACD 12 / 26 / 9 · trend & momentum
The MACD line crossing above the signal line (bars flip to the up color) = momentum turning up; crossing below (bars flip to the down color) = turning down. Bar height = the size of that gap.
Data summary: MACD is currently below its signal line by 0.02, negative momentum.
Relative performance vs S&P 500 & its sector (XLRE (sector)), set to 100 a year ago
Solid = CTRE · dashed = S&P 500 · dotted = XLRE (sector). A rising line means it is beating that benchmark — the sector line shows whether it is a leader or laggard within its own group.
Forward revenue & earnings actual → estimate · "FY" = fiscal year, "E" = estimate
Darker bars = actual results, brighter = analyst estimates. Taller bars to the right = expected growth.
Key stats an RIA wants
1. What it is
CareTrust REIT (NYSE: CTRE) is a self-managed net-lease REIT that owns, acquires, develops and leases healthcare real estate — skilled nursing facilities, seniors' housing, and related medical properties — under long-term net leases to a broadening roster of operators nationwide. Headquartered in San Clemente, CA; CEO David Sedgwick; a famously lean shop with 21 full-time employees. IPO 2014-05-29 (spun from The Ensign Group). Calendar fiscal year.
Business mix — what the data does and doesn't show:
- Segments: FMP reports a single "Reportable Segment" ($476.4M FY25) — no product-level split is available in our dataset.
- Geography: the geographic-segment feed is empty in our data. We can see the footprint of a major expansion — long-term investments jumped from $0.81B (FY24) to $3.74B (FY25), total assets from $3.44B to $5.15B, and cost of revenue leapt from $13.6M to $194.8M, consistent with a large acquired portfolio carrying operating costs — but the file does not itemize which acquisitions. We flag rather than fabricate.
- The model: raise equity (net stock issuance was $1.55B in FY24, with a further ~$1.07B of financing inflows in FY25), deploy into net-leased healthcare assets and loans (~$1.42–1.45B of investing outflows in each of FY24 and FY25), collect long-term contractual rent, pay out most of it as dividends ($259.3M paid in FY25).
2. The expert thesis (traceable)
No expert-panel coverage — this note is fundamentals-driven. A search of the Synthos KB for CTRE returns zero claims from zero voices. That is the honest house standard for screen-surfaced names: CTRE entered the pipeline via the quant momentum screen, not via conviction voices, so there is no bull or bear thesis to reconcile, no claim_ids to cite, and kb_net_conviction is null by construction. Everything below rests on the company's reported financials, live analyst consensus, and the technical block — with the Street's $44.25 consensus target explicitly used as the valuation anchor (§3, §6) in the absence of a panel.
3. Synthos scores & the Bull / Base / Bear cases
The one-glance judgment — three scores, 0–10, each anchored to real metrics:
| Score | 0–10 | The read |
|---|---|---|
| Downside Risk (lower = safer) | 5 · Moderate | Genuinely defensive mechanics: beta 0.79, net-debt/EBITDA 1.36×, interest coverage 5.97×, debt only 17% of assets, current ratio 1.75×, a 3.5% dividend covered by FCF. Against that: skilled-nursing tenants depend on government reimbursement, the growth model requires continuous equity issuance and open capital markets, income is concentrated in one property type, and the stock is technically stretched (RSI 80, 2.5% off the high). |
| Growth Quality | 6 · Decent | FY25 revenue +108.8% and operating cash flow of $394M (income quality 1.23 — cash exceeds GAAP income) are real. But the growth is bought with shares (weighted diluted count 96.7M FY22 → 224.0M Q1 2026), ROE is 8.7%, ROIC ~5.6%, and consensus EPS crawls from $1.50 (2026E) to $1.69 (2029E) — ~4%/yr per share. |
| Exponential Potential | 2 · Low | Net-lease REITs compound arithmetically: rent escalators + spread investing funded by new equity. Consensus revenue grows +4.9% (2026E), +14.9% (2027E), +23.5% (2028E), +10.7% (2029E) — lumpy, acquisition-driven, and flat per share. No acceleration mechanics, no operating leverage story. |
The three cases (our own scenario model — assumptions shown; each target is a ~12–18-month fair value). We do not attach probabilities; the base case is the expected path and the scores summarize the range. Anchoring note: with no expert panel, our base deliberately sits on the Street's $44.25 consensus, cross-checked against our own multiple math below.
| Case | Key assumptions | Fair value |
|---|---|---|
| Bull | Acquisition pipeline keeps compounding; 2028E EPS lands at the high end ($1.78) and the market pays ~28× GAAP EPS for a low-beta consolidator with a rising dividend. | ~$50 (+21%) |
| Base (anchored on Street) | Estimates roughly hit — 2027E EPS ~$1.61; a defensive healthcare landlord holds a ~27× GAAP-EPS multiple (equivalently, the market keeps accepting a ~3.3–3.5% dividend yield). | ~$44 (+6%) |
| Bear | A reimbursement squeeze or a large tenant credit event; equity issuance stalls, the multiple de-rates to ~21× on ~$1.61, and the stock is repriced to a ~4.3% yield. | ~$34 (−18%) |
Synthos fair value = the base case, ~$44 (+6%), full range $34–$50. Note the asymmetry is mild in both directions — this is a low-variance name where the dividend does much of the total-return work. A caveat on the multiple math: REITs are conventionally valued on FFO/AFFO, which our dataset does not include — GAAP EPS understates a REIT's cash earnings because of depreciation, so the 26× headline P/E overstates how expensive CTRE is versus cash flow (P/FCF is 24.6×, FCF yield 4.1%). This is a tracked call — the Forecaster Scorecard grades it once it matures.
4. Exponential Potential
Synthos separates compounders from exponentials. CTRE is unambiguously the former — and scores 2/10 on exponential mechanics:
- Forward growth: consensus revenue $500M (2026E) → $785M (2029E), a ~16% CAGR — respectable, but almost entirely acquisition-driven and equity-funded.
- Acceleration (the 2nd derivative): lumpy, not compounding — +4.9% → +14.9% → +23.5% → +10.7%. The 2028 bump reflects deal-pipeline assumptions from a thin analyst base (2–4 revenue estimates per year), not organic acceleration.
- Per-share reality (the tell): consensus EPS $1.50 → $1.61 → $1.71 → $1.69 over 2026E–2029E. Revenue +57% over the window; EPS +13%. The share count absorbs the difference — that is the arithmetic signature of a spread-investing REIT, not an exponential.
- Room to run: healthcare real estate is a large, fragmented market and a $9.8B consolidator with 1.36× leverage has genuine runway — but the runway produces income growth, not multibagger outcomes.
Exponential Potential: Low (2/10). You own CTRE for a 3.5% yield growing mid-single digits with low volatility — a perfectly good reason, and the honest one.
5. Financials (real numbers — FMP annual/quarterly)
- Revenue: FY25 $476.6M, +108.8% (FY24 $228.3M, +14.9% on FY23 $198.6M; FY22 $187.5M; FY21 $190.2M; FY20 $175.7M). The FY25 step-change is acquisition-driven, not organic.
- Quarterly trajectory: Q1 2025 $71.6M → Q2 $86.0M → Q3 $104.3M → Q4 $135.1M → Q1 2026 $142.8M (+99.3% YoY) — the acquired portfolio layering in quarter by quarter. Q1 2026 diluted EPS $0.36 (beat the $0.35 estimate).
- Margins & mix shift: gross margin 73.8% TTM — down from the ~94% of the pure-net-lease years because FY25 cost of revenue jumped to $194.8M (from $13.6M), i.e., the company now consolidates assets with real operating costs. Net margin is still an extraordinary 71.5% TTM (boosted by interest income and non-rental items).
- Earnings & quality: FY25 net income $320.5M / diluted EPS $1.57 (FY24 $0.80, FY23 $0.50). Income quality 1.23 — operating cash flow exceeds net income, the opposite of an accounting-flattered P&L. Stock comp is a modest 1.7% of revenue.
- Cash flow: FY25 operating CF $394.0M, capex only −$15.0M (a landlord's P&L), FCF $379.0M. Dividends paid $259.3M — covered ~1.5× by FCF. Investing outflows of $1.46B (FY25) and $1.51B (FY24) show the deployment pace.
- Balance sheet: total debt $894M vs cash $198M → net debt $696M; net-debt/EBITDA 1.36×, debt/assets 17.1%, interest coverage 5.97× — conservative for a REIT. Equity $4.04B; book value $18.63/share (P/B 2.23×). No goodwill; intangibles a trivial $48M.
- Dilution — the structural feature: weighted diluted shares 96.7M (FY22) → 106.2M (FY23) → 155.2M (FY24) → 204.1M (FY25) → 224.0M (Q1 2026). Equity is the fuel; per-share metrics are the honest lens.
- Missing data, said plainly: the dataset contains no FFO/AFFO (the standard REIT earnings measures), no occupancy/coverage metrics, and no tenant-level detail — those caveats bound every per-share statement above.
6. Valuation — priced in or room?
On GAAP optics CTRE looks expensive for a REIT: 26.4× trailing EPS, 21.1× EV/EBITDA, 2.23× book, 20.9× price/sales. But GAAP EPS is the wrong primary lens for a landlord — on cash the picture is more ordinary: 24.6× FCF (4.1% FCF yield) and a 3.50% dividend yield (TTM DPS $1.45, payout 83.5% of net income and ~81% of FCF/share). Forward, the multiple barely compresses because the share count grows with the assets: 27.7× 2026E ($1.50) → 25.7× 2027E ($1.61) → 24.1× 2028E ($1.71) → 24.5× 2029E ($1.69). FMP's letter rating is A (overall 4/5; DCF score 5/5, ROA 5/5 — but P/E and P/B both 2/5), which matches our read: quality business, full price. Street targets: consensus $44.25, median $44, high $47, low $42 — an unusually tight band (1.1× high-to-low) that says the Street sees this the same way we do: a fairly-valued compounder with total return ≈ 6% price + 3.5% yield. Not a value buy; a pay-up-for-durability name where entry price is most of the edge.
7. Technicals (from the tech block)
- Trend: clean uptrend. $41.39 sits above the 50-DMA ($39.56) and 200-DMA ($37.71), 50 above 200 (golden-cross posture). MACD +0.56 (positive).
- Location: −2.5% off the 52-week high ($42.44 close-basis; intraday $43.08) and +36.6% off the 52-week low ($30.29). Max drawdown from peak is the same −2.5% — this stock is at its highs, not recovering toward them.
- Momentum: RSI(14) 80 — overbought by any standard reading. This is the single loudest technical fact in the file.
- Relative strength: +34.8% 12-mo vs SPY +21.1% and QQQ +31.2% — genuine leadership for a REIT. But the near-term tape has cooled: +8.0% 3-mo vs SPY +14.6% / QQQ +23.6% — CTRE has lagged the market for the last quarter even while grinding to new highs.
- Read: technically strong but stretched. For a momentum system this is confirmation; for an initiating buyer it is a poor entry. The rising 50-DMA (~$39.50) is the natural first add zone; the 200-DMA (~$37.70) is the deeper one.
8. Moat & competitive position
CTRE's edge is underwriting and structure, not assets: long-term triple-net leases push operating risk to tenants; a 21-employee cost base makes G&A per dollar of assets among the leanest anywhere; and low leverage (1.36× net-debt/EBITDA) lets it buy when levered peers can't. The moat's limits are equally structural: healthcare real estate is a commodity in the end, the true risk sits with operator quality and government reimbursement (neither visible in our dataset), and the external-growth model works only while the equity trades at a premium to asset value — a virtuous cycle that reverses if the multiple de-rates.
Peer set (FMP-supplied, market cap): American Healthcare REIT $11.1B, First Industrial $8.4B, Vornado $7.7B, STAG Industrial $7.5B, Terreno $7.3B, Healthcare Realty $7.2B, Essential Properties $6.7B, Starwood Property $6.2B, Sabra Health Care $5.0B. Data caveat: this list mixes industrial and office landlords with healthcare names; the relevant comps are AHR, HR and SBRA (and skilled-nursing peers like Omega Healthcare, which the feed omits). At 2.23× book and a 3.5% yield, CTRE is priced at the premium end of the healthcare cohort — the market already pays up for the balance sheet and the acquisition record.
9. Management, capital allocation & guidance
- Capital allocation: the model in one line — issue equity ($1.55B net in FY24, further large financing inflows in FY25), deploy into net-leased assets and loans (~$1.4–1.5B/yr of investing outflows), pay out $259.3M of dividends (FY25), keep leverage at 1.36×. Essentially no buybacks (a trivial $3.3M in FY25) — correct behavior for a REIT trading above book that can deploy accretively. Capex is negligible (~3.4% of revenue), as a net-lease structure implies.
- Dividend record (from the cash-flow statements): $106.1M (FY22) → $115.5M (FY23) → $172.2M (FY24) → $259.3M (FY25) paid — growing with the share count and then some; TTM DPS $1.45.
- Insider activity: the recent Form 4s (2026-01-06 and 2026-02-03) are all routine — director LTIP awards and officer vesting with F-InKind tax-withholding dispositions at $37.34 (CEO David Sedgwick, CIO James Callister, CAO Lauren Beale). No discretionary open-market buying or selling in the file — a neutral signal, cleaner than a top-ticking sale.
- Guidance: our dataset contains no management guidance fields for CTRE (no earnings-call ingest on this name). Recent execution vs Street from the earnings calendar: Q1 2026 EPS $0.36 beat ($0.3535 est), Q4 2025 $0.47 beat ($0.39 est), Q3 2025 $0.45 miss ($0.47 est) — mixed-to-positive.
10. Catalysts & what to watch
- Next earnings: 2026-08-05 (Q2 2026; Street EPS $0.3683, revenue est ~$122.2M — note the estimate feed's revenue basis runs below the GAAP income-statement line, so judge the print on EPS and any FFO disclosure, not that revenue figure).
- Acquisition announcements & equity issuance: the growth engine. Watch pace of deployment vs the ~$1.4B/yr recent run-rate, and whether new equity is still being raised above book.
- Rates: a low-beta 3.5%-yielder trades like a bond proxy; a back-up in long yields compresses the multiple mechanically.
- Reimbursement policy: Medicaid/Medicare rate decisions flow straight through skilled-nursing tenant coverage to rent security.
- Integration of the FY25 expansion: the new cost-carrying assets (cost of revenue $194.8M FY25 vs $13.6M FY24) change the margin profile — watch whether gross margin stabilizes near the ~74% TTM level.
Thesis tripwires (what would change the call): a dividend growth pause or payout pushing past ~90% of FCF; a disclosed tenant default or rent deferral; equity issuance halted by a de-rated stock; two consecutive EPS misses; RSI-80 momentum breaking below the 50-DMA on volume.
11. Key risks
- Reimbursement / tenant credit (the dominant risk): skilled-nursing operators are thin-margin businesses paid largely by government programs; CTRE's rents are only as good as its tenants' coverage — and our dataset contains no tenant concentration or rent-coverage data to size this, which is itself a risk statement.
- External-growth dependence: per-share growth requires issuing equity above asset value and deploying it accretively; a de-rated stock or tight capital markets stalls the model (shares already +134% since FY20 — dilution is the toll).
- Rate sensitivity: a bond-proxy yield instrument in a rising-rate tape de-rates without anything going wrong at the company.
- Entry-point risk: RSI 80, 2.5% from the high, and 3-month returns already lagging SPY — the tactical setup is the weakest part of the story.
- Valuation vs cohort: 2.23× book and 26× GAAP EPS is the premium end of healthcare REITs; the multiple assumes continued flawless capital allocation.
- Data gaps (honesty): no FFO/AFFO, no occupancy/coverage, no geographic split, no guidance ingest — the standard REIT dashboard is partly dark in our file, and our scores carry that uncertainty.
12. Verdict, position sizing & monitoring
Watch. CareTrust is a genuinely good defensive business — 1.36× net-debt/EBITDA, 5.97× interest coverage, beta 0.79, a 3.5% dividend covered ~1.5× by free cash flow, income quality above 1.2, and a lean 21-person platform that just doubled its asset base. If the flagship needed a low-volatility income anchor, this is the right kind of name. But the moment is wrong: the stock sits 2.5% from its 52-week high with RSI at 80, the Street's tight $42–47 target band offers ~6% to our $44 base case, per-share earnings are flat for three years on consensus, and there is no expert-panel conviction behind it — only a momentum screen. That combination is a Watch, not a buy.
- Sizing: 0% today. On a pullback toward the 50-DMA (~$39.50) — or better, the high-$37s near the 200-DMA — an income-sleeve position of ~1–2% becomes defensible, with the 3.5–3.8% yield at those prices doing the heavy lifting.
- Monitoring: re-underwrite on the §10 tripwires; formal re-score each earnings print (next 2026-08-05). This verdict is logged as a tracked Synthos call as of 2026-07-06 at $41.39.
- Single biggest risk: a reimbursement squeeze or major tenant credit event — the one scenario that damages the dividend, the growth model, and the premium multiple simultaneously.
Provenance & disclosures
- Traceability: 0 KB claims, 0 voices — CTRE has no expert-panel coverage, so this note is fundamentals-driven by declaration (§2), and
kb_net_convictionis null by construction. Fabricated conviction is structurally impossible (claim-ID reconciliation); here there are simply no claims to reconcile. - Data as-of: fundamentals 2026-03-31 (Q1 2026, filed 2026-05-07) · estimates & prices 2026-07-06 · no KB claims. Forward figures are analyst consensus (FMP) from a thin base (1–5 analysts per year) — treat the out-years as sketches, not forecasts.
- REIT-metric caveat: the dataset contains no FFO/AFFO, occupancy, rent coverage, or tenant concentration data — the standard REIT dashboard is incomplete, and GAAP-EPS multiples overstate a landlord's true cash multiple.
- Estimate-basis caveat: the earnings-calendar revenue estimates (~$122M/qtr) run on a different basis than the GAAP income-statement revenue (~$143M in Q1 2026); EPS is the cleaner print-day yardstick.
- Anchoring disclosure: with no expert panel, the base-case fair value is deliberately anchored on the Street's $44.25 consensus and cross-checked with our own multiple math (~27× 2027E EPS); DCF-style assumptions are labeled in §3.
- Peer caveat: the FMP-supplied peer list mixes industrial/office REITs with healthcare names and omits the closest skilled-nursing comps; judge CTRE against AHR/HR/SBRA and the skilled-nursing cohort.
- Not investment advice. Independent research, educational and informational only, never personalized. Hypothetical/forward figures are labeled; the only performance numbers Synthos will headline are the live, real-money Flagship's.
- Version: 2026-07-06. Prior versions available via the deep-dive version dropdown ("based on the info at the time").