CareTrust REIT, Inc
CTRE
$43.25
+2.13%
CareTrust REIT is a self-administered real estate investment trust that owns, acquires, finances, and leases skilled nursing, seniors housing, and other healthcare-related properties across the United States. The company distinguishes itself as a triple-net lease REIT, where tenants assume responsibility for property-level costs, providing stable and predictable cash flows. Investor attention is currently focused on CareTrust's robust revenue growth trajectory, driven by strategic acquisitions and portfolio expansion, while the broader debate centers on the sustainability of occupancy rates in skilled nursing facilities and the impact of rising interest rates on REIT valuations.…
CTRE
CareTrust REIT, Inc
$43.25
CTRE 12-Month Price Forecast
Wall Street consensus
Most Wall Street analysts maintain a constructive view on CareTrust REIT, Inc's 12-month outlook, with a consensus price target around $45.15 and implied upside of +4.4% versus the current price.
Average Target
$45.15
0 analysts
Implied Upside
+4.4%
vs. current price
Analyst Count
—
covering this stock
Price Range
$42 - $49
Analyst target range
CareTrust is covered by 13 analysts, with a consensus recommendation of 'Strong Buy' (mean rating 1.38 on a 1-5 scale). The average price target is $45.15, implying 4.4% upside from the current price of $43.25. The distribution leans heavily bullish, with no sell ratings and only one neutral rating. The target range spans from $42.00 (low) to $49.00 (high). The high target of $49.00 assumes continued acquisition-driven growth and margin expansion, while the low target of $42.00 reflects potential headwinds from rising interest rates or occupancy challenges. Recent ratings actions have been uniformly positive, with firms like BMO Capital and Wells Fargo reiterating Outperform/Overweight ratings, indicating strong institutional conviction.
Bulls vs Bears: CTRE Investment Factors
CareTrust REIT presents a compelling growth story with revenue nearly doubling year-over-year, expanding margins, and strong free cash flow. The bull case is supported by a PEG ratio of 0.25, indicating undervaluation relative to growth, and a consensus Strong Buy rating from analysts. However, bears point to the stock trading near its 52-week high and historical valuation peaks, leaving limited upside. The single most important tension is whether the company can sustain its acquisition-driven growth trajectory; if it does, the stock could re-rate higher, but any slowdown would expose the premium valuation. Currently, the bull case has stronger evidence given the robust financial performance and low PEG ratio.
Bullish
- Explosive Revenue Growth: Revenue surged 99.3% year-over-year in Q1 2026 to $142.8 million, driven by aggressive acquisitions. The multi-quarter trend shows accelerating growth from $71.6 million in Q1 2025, indicating strong execution.
- Expanding Profit Margins: Net margin improved from 19.4% in Q2 2024 to 56.2% in Q1 2026, reflecting operational leverage and scale benefits. Gross margin remains high at 56.9%, supporting profitability.
- Strong Free Cash Flow Generation: Trailing twelve-month free cash flow is $397.1 million, providing ample internal funding for acquisitions and dividends. This reduces reliance on external capital markets.
- Low Valuation Relative to Growth: PEG ratio of 0.25 suggests the stock is undervalued relative to its earnings growth rate. Despite a trailing P/E of 23.0x, the growth trajectory justifies the multiple.
Bearish
- Valuation Near Historical Highs: Trailing P/E of 23.0x is near the upper end of its historical range (18.1x-25.5x), leaving limited room for multiple expansion. The stock trades at 99.2% of its 52-week high.
- Interest Rate Sensitivity: As a REIT, CareTrust is sensitive to rising interest rates, which increase borrowing costs and compress valuations. Debt-to-equity is low at 0.22, but higher rates could slow acquisition activity.
- Dependence on Acquisition Growth: Revenue growth is heavily reliant on acquisitions, which may not be sustainable at the same pace. Organic growth from existing properties is limited by occupancy rate challenges in skilled nursing.
- Low Dividend Yield: Dividend yield of 3.52% is modest for a REIT, and the payout ratio of 80.9% leaves limited room for increases. Income-focused investors may find better yields elsewhere.
CTRE Technical Analysis
CareTrust is in a sustained uptrend, with the stock price up 38.4% over the past year, significantly outperforming the S&P 500's 16.5% gain. The current price of $43.25 sits at 99.2% of its 52-week range (high $43.60, low $30.51), indicating strong momentum and positioning near the top of its range, which can signal either continued bullish sentiment or potential overextension. Short-term momentum is accelerating, with a 1-month return of 9.8% and a 3-month return of 13.9%, both outpacing the S&P 500's 0.8% and 3.5% gains, respectively. This divergence from the broader market suggests strong relative strength, with the stock's 1-month relative strength of 9.0% confirming its leadership. The 52-week low of $30.51 provides a key support level, while the 52-week high of $43.60 acts as immediate resistance. A breakout above $43.60 could signal further upside, while a breakdown below $30.51 would indicate a trend reversal. With a beta of 0.79, the stock is less volatile than the market, offering a defensive profile for investors.
Beta
0.79
0.79x market volatility
Max Drawdown
-14.3%
Largest decline past year
52-Week Range
$31-$44
Price range past year
Annual Return
+38.4%
Cumulative gain past year
| Period | CTRE Return | S&P 500 |
|---|---|---|
| 1m | +9.8% | +1.4% |
| 3m | +13.9% | +3.3% |
| 6m | +17.4% | +6.3% |
| 1y | +38.4% | +16.0% |
| ytd | +19.1% | +8.4% |
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CTRE Fundamental Analysis
CareTrust's revenue is growing rapidly, with Q1 2026 revenue of $142.8 million representing a 99.3% year-over-year increase, driven by aggressive acquisition activity. The multi-quarter trend shows accelerating growth: revenue was $71.6 million in Q1 2025, $86.0 million in Q2 2025, $104.3 million in Q3 2025, and $135.1 million in Q4 2025, indicating a consistent upward trajectory. The company is highly profitable, with Q1 2026 net income of $80.2 million and a gross margin of 56.9%. Net margins have expanded from 19.4% in Q2 2024 to 56.2% in Q1 2026, reflecting improving operational efficiency and scale. The balance sheet is healthy, with a debt-to-equity ratio of 0.22 and a current ratio of 1.54, indicating ample liquidity. Free cash flow for the trailing twelve months is $397.1 million, providing strong internal funding for acquisitions and dividends. ROE stands at 7.9%, reflecting efficient use of equity capital.
Quarterly Revenue
$142783000.0B
2026-03
Revenue YoY Growth
+99.3%
YoY Comparison
Gross Margin
56.9%
Latest Quarter
Free Cash Flow
$397136000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is CTRE Overvalued?
Given positive net income, the primary valuation metric is the P/E ratio. The trailing P/E is 23.0x, while the forward P/E is 24.8x, implying the market expects earnings growth to continue. The stock trades at a P/E of 23.0x versus the industry average of 22.0x (estimated), a slight 4.5% premium, which is justified by its superior revenue growth and expanding margins. Historically, the trailing P/E has ranged from 18.1x (Q4 2025) to 25.5x (Q1 2026), and the current multiple is near the higher end of this band, suggesting the market is pricing in optimistic growth expectations. The PEG ratio of 0.25 indicates the stock is undervalued relative to its earnings growth rate, supporting a bullish valuation case.
PE
23.0x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 18x~42x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
17.4x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: CareTrust's revenue growth is heavily dependent on acquisitions, which may not be sustainable at the current pace. The company's debt-to-equity ratio is low at 0.22, but rising interest rates could increase borrowing costs and slow future acquisitions. Free cash flow of $397.1 million provides a buffer, but the payout ratio of 80.9% limits dividend growth. Net margin expansion from 19.4% to 56.2% is impressive, but any reversal due to occupancy declines would pressure earnings.
Market & Competitive Risks: The stock trades at a trailing P/E of 23.0x, near the high end of its historical range, making it vulnerable to multiple compression if growth decelerates. With a beta of 0.79, the stock is less volatile than the market, but REITs are sensitive to interest rate changes. The industry faces regulatory risks from Medicare/Medicaid reimbursement changes, which could impact tenant operators. No recent news highlights specific threats, but the competitive landscape for healthcare properties remains intense.
Worst-Case Scenario: A sharp rise in interest rates combined with a slowdown in acquisition activity could lead to a de-rating of the stock. If revenue growth decelerates below 10% and margins contract, the stock could fall to its 52-week low of $30.51, representing a 29.5% decline from the current price of $43.25. In a severe recession, occupancy rates could drop, pushing the stock lower, but the triple-net lease structure provides some downside protection.