CareTrust REIT (NYSE: CTRE) continues to show strong financial performance, with its executives expressing confidence in future growth. The company remains focused on expanding its skilled nursing portfolio while managing economic challenges like high interest rates and potential Medicaid changes.
CTRE Stock: A Year of Strong Deals
CareTrust has no plans to slow down its investments in 2025. CEO Dave Sedgwick emphasized that the company has strengthened its financial position, allowing it to seize new opportunities.
“In the past two years, financial markets faced serious challenges, but we were ready. Our strong position helped us take advantage of new investment opportunities,” Sedgwick said in a recent call.
In 2024, the company completed $1.5 billion in acquisitions. With a solid foundation in place, CareTrust expects continued growth in 2025.
PACS Holdings and Financial Stability
CareTrust has expanded its relationship with PACS Group (NYSE: PACS), despite PACS facing a federal investigation for billing practices. Sedgwick reassured investors that there are no concerns regarding CareTrust’s financial health.
“We’re not worried about any major issues with PACS. We don’t have any bad debt tied to them, and we expect them to be just fine,” Sedgwick said.
The company manages over 1,200 beds in partnership with PACS, including 210 skilled nursing beds and 24 assisted living units. Sedgwick emphasized that their lease agreements remain strong, providing financial stability.
Investments and Future Growth
CareTrust’s investment strategy remains aggressive, with deals coming in weekly. Chief Investment Officer James Callister highlighted the company’s ability to secure deals ranging from small acquisitions under $5 million to larger ones exceeding $450 million.
The company closed 2024 with a record-breaking quarter, adding 81 triple-net lease facilities to its portfolio. Looking ahead, CareTrust has a pipeline of $325 million in deals expected to close within the next year.
Medicaid Concerns: No Major Impact is Expected
Medicaid cuts have been a topic of concern for the industry. However, Sedgwick does not expect any significant changes to funding.
“Previous attempts to cut Medicaid were unsuccessful, and we believe this time will be no different. Republican governors are also not in favor of taking on more financial burdens,” he said.
Sedgwick also addressed concerns about the Biden administration’s minimum staffing mandate. He believes it will likely be reversed and will not impact CareTrust’s operations.
CTRE Stock Outlook: Promising Future
CareTrust ended the fourth quarter with a 68.1% increase in normalized FFO, reaching $72.9 million. The company expects FFO per share to range between $1.68 and $1.72 in 2025.
Despite a small decline in stock price, closing at $26.42 per share, CareTrust’s strong financials suggest a positive outlook for long-term investors. With a growing investment pipeline and stable Medicaid policies, CTRE stock remains a solid choice for those looking to invest in the skilled nursing sector.
Final Thoughts
CTRE stock continues to perform well despite market challenges. With strong investments, stable lease agreements, and a positive outlook on Medicaid funding, CareTrust is positioned for continued success. Investors should keep an eye on this growing REIT as it expands its portfolio and strengthens its financial future.
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