Breaking Down CareTrust REIT, Inc. (CTRE) Financial Health: Key Insights for Investors

You're looking at CareTrust REIT, Inc. (CTRE) and wondering if the healthcare real estate sector still offers a compelling mix of income and growth, especially as the market digests recent acquisitions and shifting interest rate expectations. Honestly, the third quarter of 2025 results show a company in a significant transition, but with a remarkably clean balance sheet. Revenue surged 71.2% year-over-year to $132.4 million in Q3 2025, a clear sign the new three-engine growth model-including the U.K. care homes-is kicking in, but the normalized Funds From Operations (FFO) per share of $0.45 was a slight miss on consensus, even while representing an 18% jump from the prior year quarter. Management is guiding for a full-year 2025 normalized FFO of $1.76 to $1.77 per share, and they are defintely putting capital to work, closing over $495 million in investments in Q3 and since, pushing the year-to-date total to a record approximately $1.6 billion. Plus, with a Net Debt to Annualized Normalized Run Rate EBITDA of just 0.42x, their financial firepower is undeniable, which is exactly why we need to dig into the sustainability of that $0.335 quarterly dividend and the risks lurking in the U.S. skilled nursing segment.

Revenue Analysis

You need to know if CareTrust REIT, Inc. (CTRE) can keep up its incredible growth, and the short answer is that the company's strategic pivot has delivered massive near-term results, but it's a new game. The core of CTRE's revenue remains leasing healthcare properties, specifically through the highly stable triple-net lease structure, where the tenant covers all property expenses like taxes, insurance, and maintenance, simplifying CTRE's operational profile. This is a reliable model, but the firm is defintely pushing for more.

The numbers from the 2025 fiscal year show a dramatic expansion. CareTrust REIT, Inc.'s revenue for the twelve months ending September 30, 2025 (Trailing Twelve Months or TTM) was approximately $428.48 million. This represents an explosive year-over-year revenue growth of 59.24%, driven by aggressive acquisitions, particularly the 2024 purchase that brought in U.K. assets. Honestly, a nearly 60% growth rate for a REIT is a huge signal that management is executing on its expansion plan.

The company's revenue streams are now defined by a strategic three-engine model, a significant shift from its historical focus on U.S. Skilled Nursing Facilities (SNFs). This diversification is key to mitigating sector-specific risks and fueling future growth, especially as the U.S. skilled nursing market faces its own challenges. The strong revenue performance in Q3 2025, which saw a 71.2% year-over-year surge in revenue to $132.44 million, clearly reflects the impact of this new model.

Here's the quick math on how the portfolio breaks down as of the end of Q3 2025:

• U.S. Skilled Nursing Facilities (SNFs): Still the backbone, comprising 51.2% of total rent and interest income.
• U.K. Care Homes: The newest engine, acquired in 2024, providing international diversification.
• Seniors Housing Operating Portfolio (SHOP): A growing focus area that targets value-added investments to further diversify revenue streams.

What this estimate hides is the integration risk of the new U.K. and SHOP segments, but the immediate revenue impact is undeniable. The old model was stable; the new model is high-growth, which is a significant change in the risk-reward profile for you as an investor. You can read more about this strategic shift in our full analysis on Breaking Down CareTrust REIT, Inc. (CTRE) Financial Health: Key Insights for Investors.

The table below shows the clear acceleration in revenue growth over the last few years, culminating in the 2025 TTM figure:

This massive jump in growth is the most significant change in CareTrust REIT, Inc.'s financial profile. It signals a move from a steady-state REIT to an aggressive acquirer of healthcare real estate, leveraging the aging demographics trend in both the U.S. and U.K..

Profitability Metrics

You need to know if CareTrust REIT, Inc. (CTRE) is running a tight ship and actually converting its rental income into shareholder value. The short answer is yes, they are, but you have to look beyond the massive Gross Profit Margin, which is a structural feature of their business model, not a sign of unique operational genius.

For the twelve months ending September 30, 2025, CareTrust REIT, Inc. reported a TTM (Trailing Twelve Months) revenue of approximately $428 million. This strong top-line number is being converted into profit very efficiently, which is the core of their strategy. Here's the quick math on their key margins:

• Gross Profit Margin: 96.58%
• Operating Margin: 55.72%
• Net Profit Margin: 80.21%

These margins are incredibly high, especially the Gross Profit Margin. This is because CareTrust REIT, Inc. operates primarily as a net-lease real estate investment trust (REIT), meaning their tenants are responsible for most property operating expenses like maintenance, taxes, and insurance. This structure keeps the company's 'Cost of Goods Sold'-which is minimal-extremely low, resulting in a near-perfect Gross Profit Margin. This is a deliberate, low-overhead strategy.

Operational Efficiency: Gross vs. Operating Margin

The real test of operational efficiency for a net-lease REIT like CareTrust REIT, Inc. is the drop-off between the Gross Profit Margin and the Operating Margin (earnings before interest and taxes). This difference is where the company's own overhead-general and administrative (G&A) costs-lives. The margin compression here is significant, but typical for the sector.

Here's a look at the key profitability metrics from 2022 through the third quarter of 2025 (TTM), showing the trend:

The Gross Margin has remained remarkably stable, hovering around 95% to 96%, which confirms consistent cost management in their core leasing business. The gap between the 96.58% Gross Margin and the 55.72% Operating Margin for TTM September 2025 shows that G&A expenses consume a large chunk of the revenue, which is common for smaller, fast-growing REITs that are scaling up their corporate infrastructure.

Still, the Net Profit Margin has exploded from a negative -4.00% in 2022 to 80.21% TTM in 2025, which is a massive turnaround. This is defintely a result of both revenue growth-up 59.24% year-over-year to TTM September 2025-and improved financial leverage, as net income is highly sensitive to interest expense, which has been better managed or offset by income.

Comparing CareTrust REIT, Inc. to the Industry

CareTrust REIT, Inc.'s profitability ratios are generally superior to the broader Real Estate sector average, which typically sees a Gross Profit Margin around 56.8%. This difference is explained by the net-lease model. When you compare them to peers with a similar net-lease focus, their margins are right in line, with some competitors like Omega Healthcare Investors reporting a Gross Profit Margin of 100.1%.

Their high margins are a clear win over the more operationally intensive Senior Housing Operating Properties (SHOP) model, where margins can struggle to reach 30%. CareTrust REIT, Inc. is guiding for a 2025 net income per diluted share between $1.41 and $1.42, but for REITs, the key metric is Funds From Operations (FFO). Their normalized FFO guidance for 2025 is projected to be approximately $1.76 to $1.77 per share. This FFO number is a more accurate measure of the cash flow available to shareholders than the GAAP-based Net Income, and it's what you should focus on.

For a deeper understanding of the company's long-term strategy that drives these numbers, you should review their Mission Statement, Vision, & Core Values of CareTrust REIT, Inc. (CTRE).

Debt vs. Equity Structure

You're looking at CareTrust REIT, Inc. (CTRE) because you want to know if their growth is built on a solid foundation or a mountain of debt. Honestly, the balance sheet suggests the former: CTRE is running a very conservative, fortress-like capital structure right now. They are aggressively funding a record investment pace with a clear preference for equity, keeping their leverage exceptionally low.

The core takeaway is that CareTrust REIT, Inc. is significantly under-levered compared to its peers, giving it massive financial flexibility for future acquisitions. This is a deliberate strategic choice.

Here's the quick math on their financing mix as of the third quarter of 2025:

• Debt-to-Equity Ratio: A remarkably low 0.35.
• Net Debt-to-EBITDA: Around 1.1x, well below their target range of 4.0x to 5.0x.
• Near-Term Debt Risk: Virtually none, with no scheduled debt maturities prior to 2028.

Debt Levels and Industry Comparison

CareTrust REIT, Inc.'s current debt profile is intentionally light. They have a substantial, but largely undrawn, liquidity cushion. The company's primary debt facility is a $1.2 billion revolving credit line, which was completely paid down as of September 30, 2025, following a major equity raise. This means their short-term debt exposure is minimal. The long-term debt includes a $500 million, 5-year term loan that was upsized in the second quarter of 2025.

To be fair, a REIT (Real Estate Investment Trust) is expected to use debt, but CTRE's Debt-to-Equity (D/E) ratio is a massive outlier in the healthcare sector. The D/E ratio measures total debt against shareholder equity, showing how much of the company's assets are financed by debt. Their ratio of 0.35 is a clear sign of financial strength when you stack it against comparable industry figures:

This low leverage means they have significant capacity to borrow when the right acquisition opportunity comes along, without stressing the balance sheet. They are playing the long game, prioritizing a fortress balance sheet over maximizing immediate leverage returns.

Recent Capital Activity and Strategy

CareTrust REIT, Inc. has been very active on both the debt and equity fronts in 2025, but the focus has been on using equity to fund growth and de-risk the balance sheet. In the third quarter of 2025, they raised a significant $736 million of gross proceeds from an equity issuance. This massive capital injection was used to fund a record investment pace and simultaneously pay off secured notes and revolving credit facilities assumed in the Care REIT transaction.

On the debt side, they took smart action to manage interest rate risk. They entered into interest rate swaps to fix the rate on their $500 million term loan for three years, securing an attractive go-forward all-in rate of 4.6%. Plus, the company received an Investment grade rating by Fitch, which should keep their cost of debt low for future borrowings. This dual-engine approach-raising equity for scale and fixing debt costs for stability-is a defintely prudent strategy in a high-interest-rate environment.

This balance between equity funding and debt management is the key to their growth story, which you can read more about in Breaking Down CareTrust REIT, Inc. (CTRE) Financial Health: Key Insights for Investors. They use equity to maintain a low Net Debt-to-EBITDA ratio, keeping them nimble, and they use debt strategically for large, accretive deals, but only when they can lock in favorable terms.

Liquidity and Solvency

You want to know if CareTrust REIT, Inc. (CTRE) has the immediate cash to cover its short-term bills, and the answer is a resounding yes. The company's liquidity position is exceptionally strong, largely due to a massive equity raise and a conservative debt approach. This strength gives management a clear advantage in a competitive acquisition market.

Current and Quick Ratios: A REIT Anomaly

For a Real Estate Investment Trust (REIT) like CareTrust REIT, Inc., which primarily holds long-term, illiquid assets (properties), you might expect lower liquidity ratios. But their recent capital actions have skewed the numbers significantly. As of the most recent quarter (MRQ) in 2025, the ratios show extreme short-term coverage:

• Current Ratio: 5.14
• Quick Ratio: 4.60

The Current Ratio measures current assets against current liabilities, and a value over 2.0 is generally considered very healthy. CareTrust REIT, Inc.'s 5.14 is a clear signal of excess liquidity. The Quick Ratio, which strips out inventory (not a major factor for a net-lease REIT anyway), is nearly identical at 4.60, confirming that their most liquid assets-cash and receivables-easily cover their immediate obligations. This is defintely a strength, not a concern.

Working Capital Trends and Available Capacity

The trend in working capital is overwhelmingly positive, driven by strategic financing. The company had approximately $334 million in cash on hand following the third quarter of 2025. Plus, CareTrust REIT, Inc. has full, unused capacity on its $1.2 billion revolving credit facility, with no scheduled debt maturities prior to 2028. This combination creates a massive war chest for new investments, a critical component of a REIT's growth strategy.

Here's the quick math on their immediate buying power: $334 million in cash plus $1.2 billion in available credit means $1.534 billion in immediate liquidity for acquisitions and working capital needs.

Cash Flow Statements Overview (Six Months Ended June 30, 2025)

Looking at the cash flow statement for the first half of 2025 (in thousands), you can see the three core activities that define a REIT's financial life:

The cash flow trends are exactly what you want to see from a growth-oriented REIT: strong and increasing cash flow from operations (CFO) being deployed into investments (CFI), which is then funded by a mix of debt and equity (CFF). The company's year-to-date total investments reached approximately $1.6 billion by the end of Q3 2025, showing aggressive, yet well-funded, growth.

Liquidity Strengths and Clear Actions

The main strength is the sheer volume of dry powder. The $736.0 million public equity offering in Q3 2025 was a deliberate move to de-risk the balance sheet and fund a robust acquisition pipeline, which stood at approximately $600 million post-quarter. This low-leverage, high-liquidity posture is a major competitive advantage, especially if interest rates remain high and other, more leveraged competitors struggle to finance deals.

Exploring CareTrust REIT, Inc. (CTRE) Investor Profile: Who's Buying and Why?

Valuation Analysis

You're looking at CareTrust REIT, Inc. (CTRE) after a significant run-up in 2025, wondering if there's any steam left, and honestly, the valuation metrics suggest the market is pricing in a lot of that growth already. The stock has been a strong performer, but you need to check the price tag before you buy.

The stock's price action has been defintely strong. As of mid-November 2025, the share price was around $36.91, reflecting a year-to-date return of approximately +35.72%. That's a huge move, especially for a healthcare real estate investment trust (REIT). The 52-week range tells the story: the stock climbed from a low of $24.79 to a recent high of $37.19. The market is rewarding their operational performance, but now we have to ask if it's overvalued.

Here's the quick math on the core valuation ratios for CareTrust REIT, Inc. (CTRE) using recent 2025 data, which helps us map its current price against its earnings, book value, and operating cash flow.

• Price-to-Earnings (P/E): The trailing P/E ratio sits at about 27.45. For a REIT, we often look at Price-to-Adjusted Funds From Operations (P/AFFO), but the P/E is still a useful comparative tool. This multiple is higher than the broader market, showing investors expect continued strong earnings growth.
• Price-to-Book (P/B): The P/B ratio is around 2.06. This suggests the market is willing to pay more than twice the company's net asset value, which isn't cheap but is common for quality REITs with strong growth prospects and valuable real estate holdings.
• Enterprise Value-to-EBITDA (EV/EBITDA): The trailing EV/EBITDA is high at 23.48, but the forward-looking metric is closer to 14.82. The difference there is crucial: the market expects a significant jump in earnings before interest, taxes, depreciation, and amortization (EBITDA) to bring that multiple down.

The stock is not cheap right now, but it's priced for execution.

Dividend and Analyst Consensus

As a REIT, the dividend is a major part of the total return picture. CareTrust REIT, Inc. (CTRE) offers an annualized dividend of $1.34 per share, translating to a dividend yield of approximately 3.63% as of November 2025. What this estimate hides is the payout ratio, which is quite high at around 96.31% of earnings. That's a high level, meaning nearly all earnings are being paid out to maintain its REIT status, which limits the capital available for internal growth without taking on more debt.

When you look at Wall Street, the consensus is generally positive, but with a limited upside from the current price. The overall analyst consensus rating is a Moderate Buy or Buy. The average 12-month price target is approximately $37.67, which is only a small premium to the recent trading price. Still, some analysts have set a high target of $41.00, suggesting a potential for a greater jump if the company outperforms expectations.

Here is a snapshot of the key financial metrics:

The takeaway is that CareTrust REIT, Inc. (CTRE) is currently trading in the 'fairly valued' to 'slightly overvalued' range based on most traditional metrics, especially after its strong performance. The upside depends heavily on the company's ability to execute on its growth strategy and maintain its Mission Statement, Vision, & Core Values of CareTrust REIT, Inc. (CTRE).

Your next step should be to look closely at their lease coverage ratios and tenant health, as that is the real engine behind these numbers.

Risk Factors

You're looking at CareTrust REIT, Inc. (CTRE) because of its strong Q3 2025 performance-revenue surged to $132.44 million, and the full-year normalized FFO (Funds From Operations) is projected to be between $1.76 and $1.77 per share. That's solid growth. But as a seasoned analyst, I focus on the cracks in the foundation, not just the facade. The company is actively managing a few key risks you need to understand, especially as it executes its ambitious diversification plan.

The biggest near-term risk is simply the complexity of rapid expansion. You can see the full scope of their business in their Mission Statement, Vision, & Core Values of CareTrust REIT, Inc. (CTRE).

Operational and Strategic Risks: The Three-Engine Challenge

CareTrust REIT's strategic pivot to a 'three-engine model'-U.S. skilled nursing, U.K. care homes, and the Seniors Housing Operating Portfolio (SHOP)-is their core mitigation strategy, but it also creates new operational risks. Moving from a primarily U.S. skilled nursing focus to a global, multi-asset platform introduces integration challenges.

For example, the recent acquisition of Care REIT in 2024, which forms the U.K. Care Homes engine, requires seamless integration to avoid value-dilutive deals. Honestly, rapid portfolio growth always amplifies the risk of execution missteps. Another factor is the health of the operators. Since CareTrust REIT uses a triple-net lease structure, their revenue stability hinges on their operators' financial performance. They've already had to manage a portfolio transition from Covenant Care to a new operator, which they handled proactively to 'put any concerns... to rest'.

• Manage operator credit risk: A single operator failure impacts rent collection.
• Scale the SHOP platform: New operating model requires different management skills.
• Integrate new U.K. assets: Foreign operations add currency and regulatory complexity.

Financial Headwinds and Liquidity Management

The Q3 2025 earnings call highlighted a specific financial risk: the 'timing gap' between raising capital and deploying it. Here's the quick math: CareTrust REIT raised $736 million through a public stock offering, but the capital wasn't immediately put to work, creating a short-term headwind on earnings. While this is a temporary issue, it shows how capital allocation timing can pressure results.

The good news is that their balance sheet strength acts as a powerful mitigator. As of Q3 2025, their net debt-to-annualized normalized run rate EBITDA was a very low 0.42x, which is well below their target leverage range of 4.0x to 5.0x. This low leverage gives them a huge cushion to absorb short-term operational hiccups or to capitalize on unexpected investment opportunities.

External and Regulatory Pressures

As a healthcare real estate investment trust (REIT), CareTrust REIT is defintely exposed to external factors like regulatory changes. Shifts in Medicare and Medicaid reimbursement policies, which fund a significant portion of their operators' revenue, can directly impact tenant financial health. Also, while the diversification into the U.K. helps, it introduces exposure to U.K. tax law and regulatory changes.

The company mitigates this by focusing on long-term net leases, which transfer most operating and capital expenditure risks to the tenant. Furthermore, most of their leases include estimated 2.5% CPI-based rent escalators, which provides a degree of protection against general inflation, a persistent concern in the current market environment. They are also actively addressing climate-related transitional and physical risks by engaging tenants and providing property-specific reports on hazards like heat, fire, and flood.

Growth Opportunities

You want to know where CareTrust REIT, Inc. (CTRE) is going next, and honestly, the outlook is built on a very deliberate, three-part strategy. They aren't just relying on the aging population-that's the tailwind-they are actively building a 'three-engine model' to drive growth well past 2025. This diversification is key to sustaining the kind of returns we've seen.

The core of the growth story is an aggressive, accretive acquisition strategy, which is why the company's year-to-date investments hit a record of approximately $1.6 billion as of the third quarter of 2025. They closed a series of transactions totaling approximately $437 million in late October 2025, acquiring 12 skilled nursing facilities and one campus in the Southeast and Mid-Atlantic. The blended stabilized yield on these recent investments is a robust 8.8%, which shows their underwriting discipline is still sharp.

Future Revenue and Earnings Estimates

For the full 2025 fiscal year, CareTrust REIT, Inc. has provided clear guidance. This is what you should focus on, as it maps directly to their deployment of capital from the recent $736 million equity raise.

Here's the quick math on their core earnings metric, Funds From Operations (FFO):

• Normalized FFO per diluted share is projected to be between $1.76 and $1.77.
• Net income per diluted share is estimated to fall in the range of $1.41 to $1.42.

What this estimate hides is the one-time drag from the 'timing gap' between raising that equity and actually deploying it into properties, plus a higher G&A (general and administrative) expense of $52 million to $53 million as they invest in their team to support this new scale. Still, a normalized FFO of nearly $1.77 per share is a solid foundation.

The Three-Engine Growth Strategy

The biggest strategic shift is the move from a single-focus REIT to a multi-engine growth model. This is how they plan to sustain high-growth rates beyond their initial success in U.S. skilled nursing.

The three engines are:

• U.S. Skilled Nursing (SNF): The original engine, focused on triple-net leases with high-quality regional operators. This remains their largest segment.
• U.K. Care Homes: International diversification, following the acquisition of Care REIT. This platform is already about one-third of their acquisition pipeline, tapping into a market with an estimated unmet demand of 40,000 beds.
• Seniors Housing Operating Portfolio (SHOP): The third engine, which involves owning and operating the property directly, not just leasing it. This is a higher-risk, higher-reward model, and the first deal is expected to close before the end of the year.

This strategy gives them more levers to pull, so if one sector faces headwinds, the others can pick up the slack. They are defintely not putting all their eggs in one basket.

Competitive Advantages and Actionable Insight

CareTrust REIT, Inc.'s competitive edge in 2025 is less about the properties and more about the balance sheet. They have a 'fortress balance sheet' with low leverage-net debt to EBITDA was only 0.43x in Q3 2025. This is incredibly low for a REIT and gives them massive dry powder to seize opportunities, especially with a replenishing pipeline of roughly $600 million. Plus, they have no significant debt maturities until 2028, insulating them from near-term interest rate risk that is pressuring other peers.

The main action for you is to monitor the execution of the new SHOP segment. If you want a deeper dive into who is betting on this strategy, you should read Exploring CareTrust REIT, Inc. (CTRE) Investor Profile: Who's Buying and Why?