Company Overview
CareTrust REIT, Inc. operates as a self-administered, publicly traded entity focused on the ownership, acquisition, financing, development, and leasing of properties related to skilled nursing, senior housing, and healthcare services. The company functions within the Real Estate sector, specifically categorized under the REIT - Healthcare Facilities industry, which positions it to benefit from demographic trends and regulatory support for senior care infrastructure. As of December 31, 2025, the firm employs 43 individuals to manage its extensive portfolio of assets. The company's market capitalization stands at $8.29 billion, supported by a trailing twelve-month revenue of $476.39 million. These valuation and revenue figures indicate that CareTrust REIT holds a significant position within the specialized healthcare real estate market, commanding a substantial market presence relative to its employee base.
Financial Health
The company reported a trailing twelve-month revenue of $476.39 million and generated net income of $320.54 million, resulting in an EBITDA of $407.70 million. The substantial gap between the $476.39 million in revenue and the $320.54 million in net income reveals a highly efficient cost structure where expenses consume only a fraction of total income. Free cash flow for the period was $240.69 million, a figure that demonstrates the company's robust financial flexibility to fund capital expenditures, pay down debt, or return capital to shareholders without compromising operational liquidity. Profitability analysis shows a gross margin of 98.0%, an operating margin of 67.1%, and a profit margin of 67.3%, indicating that the business model is dominated by high-margin lease income with low variable costs. Liquidity assessment compares total cash holdings of $198.04 million against total debt of $894.22 million, while the debt-to-equity ratio is reported at 22.03, suggesting a leveraged balance sheet where debt obligations exceed equity capitalization. Short-term liquidity is supported by a current ratio of 2.45, which indicates that the company possesses more than twice the current assets necessary to cover its current liabilities. Return on equity stands at 9.2% and return on assets is 4.7%, metrics that reveal the effectiveness of management in generating returns relative to the capital invested and the total asset base utilized.
Valuation Assessment
Valuation metrics indicate a trailing P/E ratio of 23.65 and a forward P/E of 21.62, suggesting that the market expects earnings growth in the coming period as the forward multiple is lower than the trailing multiple. The price-to-book ratio is 2.05, which indicates that the stock trades at a market premium of over 100% above its book value, reflecting investor confidence in the quality of its real estate assets. Alternative valuation measures include a price-to-sales ratio of 17.40 and an EV/EBITDA of 22.11, metrics that suggest the market values the company based on cash flow generation and revenue multiples typical for high-margin REITs. Price metrics show a 52-week high of $41.72 and a 52-week low of $25.82, providing the trading range against which current market sentiment is measured. Volatility analysis utilizes a beta of 0.76, which indicates that the stock price moves with less volatility than the broader market, making it a relatively stable investment compared to the overall equity index.
Growth & Income
Growth rates for the trailing twelve-month period show revenue growth of 55.1% and earnings growth of 77.1%, indicating that earnings are expanding at a significantly faster pace than revenue. This divergence implies that the company is benefiting from operating leverage, where fixed costs are being covered more efficiently as revenue scales, thereby accelerating profit growth relative to top-line growth. As a dividend payer, the company offers a dividend yield of 4.2% with a payout ratio of 85.4%, a level that requires scrutiny given the high growth in earnings and the specific nature of REIT cash flow requirements. The high payout ratio suggests that a large portion of generated earnings is distributed to shareholders rather than being retained for reinvestment, a strategy common in mature or income-focused real estate trusts. The overall growth and income profile presents a high-yield opportunity coupled with rapid earnings expansion, characteristic of a company successfully scaling its healthcare real estate portfolio while maintaining a strong commitment to shareholder returns.