How Smart Investors Look at Ventas (VTR).

Ventas logged a -2.2% change during today's afternoon session, and is now trading at a price of $45.35 per share.

Ventas returned losses of -13.0% last year, with its stock price reaching a high of $54.69 and a low of $35.33. Over the same period, the stock underperformed the S&P 500 index by -19.0%. As of April 2023, the company's 50-day average price was $45.01. Ventas Inc., an S&P 500 company, operates at the intersection of two large and dynamic industries – healthcare and real estate. Based in Chicago, IL, the large-cap Real Estate company has 451 full time employees. Ventas has offered a 3.9% dividend yield over the last 12 months.

The Business Is Unprofitable and Its Balance Sheet Is Highly Leveraged:

2019-12-31 2020-12-31 2021-12-31 2022-12-31
Revenue (MM) $3,873 $3,795 $3,828 $4,129
Operating Margins 22.0% 15.6% 11.0% 11.7%
Net Margins 11.18% 11.57% 1.28% -1.15%
Net Income (MM) $433 $439 $49 -$47
Net Interest Income -$451,662 -$469,541 -$440,089 -$467,557
Depreciation & Amort. -$1,068,605 -$1,130,482 -$1,215,112 -$1,197,798
Earnings Per Share $1.17 $1.17 $0.13 -$0.15
EPS Growth n/a 0.0% -88.89% -215.38%
Diluted Shares (MM) 370 377 386 400
Free Cash Flow (MM) $877 $922 $593 $666
Capital Expenditures (MM) -$561 -$529 -$433 -$454
Net Current Assets (MM) -$13,205 -$12,584 -$13,017 -$13,183
Current Ratio 0.75 0.85 0.63 0.66
Long Term Debt (MM) $12,159 $11,895 $12,028 $12,297
Net Debt / EBITDA 6.8 6.01 7.15 7.87

Ventas has weak operating margins with a negative growth trend, declining EPS growth, and a highly leveraged balance sheet. On the other hand, the company has consistent free cash flow working in its favor. Furthermore, Ventas has stable revenues and decreasing reinvestment in the business.

Ventas does not have a meaningful trailing P/E ratio since its earnings per share are currently in the red. Based on its EPS guidance of $0.36, the company has a forward P/E ratio of 125.0. In comparison, the average P/E ratio for the Real Estate sector is 24.81. On the other hand, the market is undervaluing Ventas in terms of its equity because its P/B ratio is 1.81. In comparison, the sector average is 2.24.

Ventas Has an Average Rating of Buy:

The 18 analysts following Ventas have set target prices ranging from $45.0 to $80.0 per share, for an average of $53.94 with a buy rating. As of April 2023, the company is trading -16.6% away from its average target price, indicating that there is an analyst consensus of some upside potential.

Ventas has an average amount of shares sold short because 2.6% of the company's shares are sold short. Institutions own 98.5% of the company's shares, and the insider ownership rate stands at 0.54%, suggesting a small amount of insider investors. The largest shareholder is the Vanguard Group, Inc., whose 16% stake in the company is worth $2,983,470,734.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.