Ventas, Inc. (VTR): what the price requires
At today's price, Ventas, Inc. (VTR) is priced for +13.1% FFO growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/VTR
Headline
| Field | Value |
|---|---|
| Ticker | VTR |
| Company | Ventas, Inc. |
| Current price | $91.91/sh |
| Composition | SHOP (Senior Housing Operating Portfolio) 74% / OM&R (Outpatient Medical & Research) 16% / NNN (Triple-Net Leased) 10% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | reit |
| Implied FFO growth | 13.1% |
| Price-to-FFO | 27.4x |
| FFO yield | 3.6% |
Solve inputs: computed at a 9% cost of equity with 4% terminal growth over a 5-year stage.
How unusual the bet is: extreme
| Reference | Value |
|---|---|
| vs own history | +0.77σ |
| cohort percentile (of 88 peers) | 94 |
| sustained it ~5 years at this level | 54% |
| implied end-window share | 0% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 8.62x | 2 | expensive |
| Earnings | 2.42x | 4 | expensive |
| Relative | 1.74x | 6 | expensive |
| Growth | 1.00x | 3 | justifies |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.
Per-Model Detail (n=15)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $98.38 | 0.93x | yes | FCF base $1.9B, growth 21% (input: historical growth), terminal g 4.0%, WACC 9.2%, 7yr projection |
| DCF Exit Multiple | Growth | $92.30 | 1.00x | yes | Exit EV/EBITDA: 29.0x / 31.0x / 33.0x (bear / base = today's held flat / bull), 7yr |
| Relative Valuation | Relative | $95.30 | 0.96x | yes | P/E 35x (static sector reference · 2026-04), scenarios: 28.4x / 35.0x / 41.6x (bear / base = reference held flat / bull), EV/EBITDA 23.29x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $6.05 | 15.19x | yes | BV/sh $26.97, ROE (TTM) 2.1%, ke 9.3% |
| Two-Stage Excess Return | Asset | $3.40 | 27.03x | yes | 5yr excess ROE then converge to ke=9.3% (excluded from median) |
| Discounted Future Market Cap | Growth | $81.47 | 1.13x | yes | Rev $6.1B, growth 21% (input: historical growth; tapered), Terminal P/S: 5.9x / 7.3x / 8.7x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $40.20 | 2.29x | yes | FFO/share $3.35, growth 3% (input: historical FFO/share growth, 10y median), PEG=47.83 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | — | — | no | — |
| Residual Income | Asset | $2.48 | 37.06x | yes | BV $26.97 + 5yr PV of (ROE (TTM) 2.1% − Kₑ 9.3%) × BV; BV grows 1.3%/yr (excluded from median) |
| Graham Number | Asset | $45.08 | 2.04x | yes | √(22.5 × FFO/share $3.35 × BVPS $26.97) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $59.42 | 1.55x | yes | EBITDA $1.44B × sector EV/EBITDA 20.0x |
| FCF Yield | Earnings | $38.45 | 2.39x | yes | FCF $1720.2M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $37.46 | 2.45x | yes | SBC-adj FCF $1.68B (FCF $1.72B − SBC $0.04B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $43.16 | 2.13x | yes | FFO/share $3.35 × (8.5 + 2×3.4%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | $75.60 | 1.22x | yes | Revenue $6.13B × sector P/S 6.0x |
| PEG Fair Value | Relative | $17.26 | 5.33x | yes | FFO/share $3.35 × (PEG 1.5 × growth 3.4% (input: historical FFO/share growth, 10y median)) → PE 5.2x |
| Earnings Yield | Earnings | $36.22 | 2.54x | yes | FFO/share $3.35 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | $47.50 | 1.93x | yes | FFO/share $3.35 × 14.2x P/FFO (route cohort median, n=85); FFO $1.63B (FFO incl. D&A + impairments, FY2025, companyfacts), shares 487M |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt (REIT basis) | $12.9b |
| Net debt / FFO | 7.91x |
| Fixed-charge coverage (FFO basis) | 3.7x |
| Funds from operations (trailing) | $1.6b |
| Share count CAGR (dilution) | 4.8% |
| Burning cash | no |
REIT basis: leverage is read against funds from operations (FFO), not depreciation-gutted operating income. The header's implied growth runs on ADJUSTED FFO — FFO minus recurring maintenance capex — so the header's multiple and this leverage ratio use bases that differ by that capex; neither substitutes for the other.
Bullet Takeaways
- Ventas owns senior housing, outpatient medical, and research real estate, and the senior-housing operating portfolio is now the growth engine: same-store NOI there grew over 15% in the first quarter of 2026 as US occupancy rose 370 basis points.
- At roughly 27 times AFFO, the cash the trust keeps after the recurring spending that keeps its buildings leasable, the price asks AFFO per share to compound around 10% a year, a pace that sits at the very top of the REIT group and that only about half of fast-growing REITs have sustained for five years.
- The next thing to watch is whether the aging-driven demand wave keeps occupancy climbing toward the portfolio's pre-pandemic peak near 92%, against a current US average near 87%, since the entire growth case rests on that gap closing.
Bull Case
Watch where Ventas is putting its money, and the thesis writes itself. Through the first quarter of 2026 the company deployed more than $1.7 billion into senior housing, acquiring 44 communities across 15 states, including a $540 million Revel transaction, and it lifted its full-year investment target to roughly $3 billion. Management's stated reasoning is plain: buying existing communities is more attractive than building new ones, because development is slow and expensive while demand is arriving now. A REIT that is buying aggressively into its strongest segment, and raising the budget mid-year, is telling you where it sees the returns. The board paired that with an 8% dividend increase for 2026, which is capital returned out of growth, not in place of it.
The reason the buying works is demographic, and the company says so directly. Its 10-K frames the strategy around "delivering profitable organic growth in senior housing" for an "aging population", the wave of people moving into their eighties that fills assisted-living and independent-living units faster than new supply can be added. That shows up in the operating numbers. The senior housing operating portfolio, the slice Ventas runs itself rather than leasing out, grew same-store NOI more than 15% in the first quarter with US occupancy up 370 basis points, and its operating margin expanded 170 basis points to 30%. When a building runs at higher occupancy, the incremental rent drops through at a much higher margin than the average, which is why occupancy gains compound into outsized NOI gains.
The scale of the platform is itself the moat. Ventas runs senior housing through a diverse set of operators, owns outpatient medical and research space alongside it, and carries the liquidity to keep buying while smaller owners are capital-constrained. Normalized funds from operations reached $0.94 per share in the first quarter, up 9% year over year, and management raised full-year normalized FFO guidance to a range of $3.82 to $3.89 per share. Fixed-charge coverage near 3.6 times means the cash the portfolio earns covers its fixed obligations comfortably enough to keep the acquisition machine running. The bull case is not a turnaround. It is a company that found its lever and is pulling it as hard as its balance sheet allows.
Bear Case
Senior housing is a cycle, and the first-quarter prints are closer to the top of one than the start. US average occupancy in the operating portfolio sat near 87% in the first quarter of 2026, against a pre-pandemic peak of roughly 92% reached back in 2014. The bull reads that five-point gap as runway. The bear reads it as the easy part of a recovery that has already run several years, with the last points of occupancy the hardest to win and the most dependent on the demand wave continuing exactly on schedule. The 15%-plus NOI growth the segment is posting is recovery math off a depressed base, and recovery math does not annualize forever. As occupancy approaches the old peak, growth has to come from rate rather than fill, and that is a slower, more competitive game.
That matters because the price has already underwritten the optimistic path. At about 27 times AFFO, an AFFO multiple sitting at the very top of the REIT group, the price requires AFFO per share to compound around 10% a year. Of the REITs that have grown that fast, only about 54% sustained the pace for roughly five years. So the question is not whether Ventas grows; it is whether it grows at the rare upper-decile rate the multiple demands, through an entire senior-housing supply cycle, while new development eventually responds to the same demographic signal the company is buying against. If that growth fades toward the sector's ordinary pace, the multiple compresses, and a 27 times AFFO name has a long way to fall before it reaches where the typical REIT trades.
The segment mix carries its own concentration risk. The triple-net portfolio leans on a small set of operators, and the 10-K discloses that several communities were "converted to our SHOP segment on January 1, 2026", the company taking operating risk back onto its own books rather than collecting a fixed rent. Those triple-net leases run on escalators that are themselves "contingent upon the satisfaction of specified facility revenue parameters", so the contracted growth is not guaranteed if a tenant's revenue stalls. The funding of all this growth is the quieter pressure: the share count has risen at roughly 4.8% a year, meaning the equity Ventas issues to buy communities dilutes the per-share math the price is counting on. The acquisitions have to earn more than they dilute, every year, for the 10% AFFO-growth bet to hold.
Valuation
Start with how a real-estate trust is actually valued. The metric is adjusted funds from operations, AFFO, which is the cash earnings plus property depreciation minus the recurring maintenance spending that keeps its buildings leasable; it sits below funds from operations because of that maintenance capital, and it is the right lens because depreciation makes GAAP profit a poor guide to what property earns. On that basis Ventas trades near 27 times AFFO, with funds from operations yielding about 4%. The peer cohort, which the sector quotes on FFO, trades across a wide band; Ventas sits at the top of it, which is the first signal of what the price is paying for.
That AFFO multiple embeds a specific bet. At roughly 27 times AFFO, the price implies AFFO per share growing about 10% a year, a pace at the most demanding end of the REIT group and one that history sustained only about 54% of the time over five years. The growth is plausible from here, given that the senior housing operating portfolio grew same-store NOI more than 15% in the first quarter and management raised full-year normalized FFO guidance to $3.82 to $3.89 per share. But plausible at the current cyclical moment is not the same as durable across a full cycle, and the multiple is pricing durability.
The methods we use to triangulate split cleanly, and the split is diagnostic. The asset-value measures built on depreciated book value land far below the price, because depreciation guts the recorded value of buildings that throw off real cash, and the same depreciation drags reported earnings power down with them, so the earnings-based methods also read the price as expensive. The relative-multiple methods and the forward-growth cash-flow methods are the ones that reach the price, because they read it against where comparable property cash flows trade and against the growth the segment is currently posting. So the pattern is unambiguous: this is a name the static, backward-looking methods cannot justify and only the growth-and-comparable methods can, which is the textbook signature of a premium paid for durability of growth rather than for assets in place. The analyst community sits roughly in line with that read, with a mean target near $93, modestly above the current price, crediting the same growth the cash-flow methods do. Solvency does not change the picture: fixed-charge coverage near 3.6 times is sturdy, but a 27 times AFFO multiple leaves little margin if the growth rate the price requires ever reverts to the sector's ordinary pace.
Catalysts
The first quarter of 2026 was the strongest single data point for the bull thesis and the clearest test of the bear's. Ventas reported normalized FFO of $0.94 per share, up 9% year over year, on total same-store property NOI growth near 9%, and raised its full-year normalized FFO guidance to a range of $3.82 to $3.89 per share, with 2026 SHOP same-store NOI growth guidance lifted to 16% at the midpoint and total same-store cash NOI growth raised to nearly 10%. US senior-housing occupancy rose 370 basis points year over year, and the operating margin expanded 170 basis points to 30%, the kind of operating leverage that defines the current up-cycle.
The deployment story is the other catalyst stream. Ventas closed more than $1.7 billion of senior housing investments year to date, 44 communities across 15 states, including a $540 million Revel transaction, and raised its 2026 investment target to roughly $3 billion, citing acquisition economics it considers more attractive than new development. The triple-net segment carried a 35% Brookdale cash rent escalator that took effect January 1, 2026, which lifts contracted rent on that portfolio for the year. The board also approved an 8% dividend increase for 2026. The thing to watch across the rest of the year is whether occupancy keeps climbing toward the old peak, since the entire premium multiple rests on the demand wave staying ahead of new supply.
Peer Cohorts (Per Segment, With Filing Citations)
SHOP (Senior Housing Operating Portfolio) (reported)
- WELL (WELLTOWER INC.)
- (no filing in the citation store)
- AHR (American Healthcare REIT, Inc.)
- (no filing in the citation store)
- SBRA (SABRA HEALTH CARE REIT, INC.)
- (no filing in the citation store)
- OHI (OMEGA HEALTHCARE INVESTORS, INC.)
- (no filing in the citation store)
- NHI (National Health Investors, Inc.)
- (no filing in the citation store)
- LTC (LTC PROPERTIES INC)
- (no filing in the citation store)
OM&R (Outpatient Medical & Research) (reported)
- DOC (Healthpeak Properties, Inc.)
- (no filing in the citation store)
- HR (HEALTHCARE REALTY TRUST INCORPORATED)
- (no filing in the citation store)
- ARE (ALEXANDRIA REAL ESTATE EQUITIES, INC.)
- (no filing in the citation store)
- CDP (COPT DEFENSE PROPERTIES)
- (no filing in the citation store)
NNN (Triple-Net Leased) (reported)
- OHI (OMEGA HEALTHCARE INVESTORS, INC.)
- (no filing in the citation store)
- SBRA (SABRA HEALTH CARE REIT, INC.)
- (no filing in the citation store)
- NHI (National Health Investors, Inc.)
- (no filing in the citation store)
- LTC (LTC PROPERTIES INC)
- (no filing in the citation store)
- AHR (American Healthcare REIT, Inc.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Ventas Q1 2026 earnings release, April 27, 2026 · Ventas Q1 2026 earnings call, April 28, 2026 · Ventas dividend declaration, 2026 · TIKR analyst summary, 2026 · Senior Housing News, April 28, 2026