Stocks

Ventas, Inc. (VTR) Fundamental Valuation Report

This Report on Ventas, Inc. (NYSE:VTR)  was generated using the tools available on StockCalc.com. Patchell Brook Equity Analytics Inc. emphasizes that the user assumes all risks associated with the use of this report or the Stockcalc website including, but not limited to, all terms and conditions mentioned in the legal disclaimer. To access all of the tools on Stockcalc, including more detailed valuation reports and the models used to generate these valuations, please subscribe for a free 30 day trial of Stockcalc here.

Valuation Summary:

Ventas $52.88 (USD) Close Price as of 05/02/2018Based on the analysis conducted in this report, Ventas, (VTR:NYS) is found to be  Undervalued.

CompanyVentas
Symbol:ExchangeVTR:NYS
IndustryReal Estate:REIT-Healthcare Facilities
Close Price/Date$52.88 (USD) 05/02/2018
Weighted Average Valuation$66.96 (USD)
SummaryVTR:NYS is found to be  Undervalued by 26.6% using the 3 valuation models shown below.
Valuation Models UsedAnalyst Consensus: $65.00 (USD)
(in order of importance)Adjusted Book Value: $64.72 (USD)
Comparables: $77.33 (USD)
Valuation Methods AnalysisThis company is:
Cash Flow Basis:Overvalued on a Cash Flow Valuation basis
Comparable Company Basis:Undervalued on a Comparable Valuation basis
Asset Basis:Undervalued on an Asset Valuation basis
Copyright © 2018 Stockcalc. All rights reserved.  

Valuation Details

Ventas Valuations

We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for VTR:NYS

Using a discounted cash flow model we generated an intrinsic value of $4.49 (USD) for VTR:NYS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

VTR:NYSCurrent ValuesValuation If Dropped *Valuation If Raised *
Calculated Value:$4.491%5%1%5%
WACC (or Ke)8.55$12.86($1.31)
Terminal Growth Rate3.00($1.14)$12.60
Tax Rate0.06$7.52$1.47
Cash Flow2,384,244,000($0.65)$9.64
Capital Expenditures-1,497,209,800$1.66$7.33
Long Term Debt11,252,327,000$6.07$2.91

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $77.33 (USD) for VTR:NYS. We also generated a valuation of $44.96 (USD) using other metrics and comparables. The comparable companies were Welltower (HCN:NYS), HCP (HCP:NYS), Healthcare Trust (HTA:NYS) and Omega Healthcare (OHI:NYS)

Company VTR:NYSEnd Date Value
Earnings/Share$3.27 (USD)
Book Value/Share$30.13 (USD)
Sales/Share$9.92 (USD)
Cash Flow/Share$4.04 (USD)
EBITDA/Share$0.00 (USD)
Price Based on CompsAdjustment Factor (%)
$158.86 (USD)-11.6
$51.93 (USD)13.1
$62.79 (USD)-14.0
$54.15 (USD)3.6
$0.00 (USD)-2.1
VTR:NYSRatios UsedAverage ValuesHCN:NYSHCP:NYSHTA:NYSOHI:NYS
28.41PE Ratio48.5824.1820.58115.0434.53
1.86PB Ratio1.721.592.041.781.48
5.64PS Ratio6.335.135.808.336.05
13.85PCF Ratio13.4014.5713.2216.499.31
16.15EV to EBITDA17.8517.9313.1925.3914.88

Multiples

Using a multiples approach we generated a valuation of  $84.75 (USD) for VTR:NYS

Company VTR:NYSEnd Date Value
Earnings/Share$3.27 (USD)
Book Value/Share$30.13 (USD)
Sales/Share$9.92 (USD)
Cash Flow/Share$4.04 (USD)
EBITDA/Share$5.17 (USD)
Price Based on CompsAdjustment Factor
$131.34 (USD)0
$65.90 (USD)0
$64.80 (USD)0
$64.60 (USD)0
$97.12 (USD)0
RatiosRatio Average
PE Ratio40.17
PB Ratio2.19
PS Ratio6.53
PCF Ratio15.98
EV to EBITDA18.78

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  VTR:NYS for the last 10 years was  2.19
We ran the Adjusted Book Value for  VTR:NYS and generated a book value of  $29.54 (USD) By multiplying these we get an adjusted valuation of  $64.72 (USD)

Analyst Data

In the Stockcalc database there are 4 analysts that provide a valuation for VTR:NYS. The 4 analysts have a concensus valuation for VTR:NYS for 2018 of $65.00 (USD).

VTR:NYS Ventas

Analyst Recommendation
BuyHoldSellRating
(of 5)
GuidanceAs Of
1413.0000Hold2018-1-30

Current Price: not available

Analyst Consensus
USD Millions201720182019
Mean EPS2.953.143.65
# EPS Analysts331
Mean Revenue2,851.402,862.202,539.70
# Revenue Analysts221
Mean Target Price65.00
Mean Cash Flow4.874.735.03
Mean EBITDA2,001.002,044.302,314.80
Mean Net Income999.40799.10970.10
Mean Debt Outstanding-11,027.80-11,038.80-11,048.50
Mean Tax Rate
Mean Growth Rate6.16
Mean Capital Expenditure287.40329.70104.40

Company Overview (VTR:NYS USD)

Price52.88
Range52.78 – 54.98
52 week52.88 – 71.93
Open54.14
Vol / Avg.3.21M/1.25M
Mkt cap18.83B
P/E28.41
Div/yield3.16/0.06
EPS1.86
Shares356.16M
Beta0.99

Detailed Company Description

Ventas Inc is a real estate investment trust. It holds a diversified portfolio of seniors housing communities, skilled nursing facilities, medical office buildings, life science buildings, and hospitals.

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.

The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).

The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.

Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.

With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.

If we have Analyst coverage for the company we use the consensus target price here.

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