Healthcare Realty Trust (HR) AI Stock Analysis

• Market Cap: $5.83B
• Dividend Yield: 7.46%
• Average Volume (3M): 2.46M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.86
• Revenue Growth: -5.62%
• EPS Growth: -140.10%
• Country: US
• Employees: 550
• Sector: Real Estate
• Sector Strength: 72
• Industry: REITs
• EPS (TTM): -1.78
• Shares Outstanding: 350,820,400
• 10 Day Avg. Volume: 2,930,436
• 30 Day Avg. Volume: 2,460,573
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 4.65
• Price to Cash Flow (P/CF): 10.70
• P/FCF Ratio: 204.30
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $17.50
• Price Target Upside: 4.67% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 7

Healthcare Realty Trust's stock score reflects a mixed financial performance with strong cash flow but weak profitability and revenue trends. The technical analysis suggests potential short-term momentum, while the valuation remains challenged due to ongoing losses. The earnings call was cautiously optimistic, highlighting strategic improvements and debt reduction, though concerns about bankruptcies and deleveraging persist. Recent corporate events support strategic growth but underscore ongoing operational challenges.

Positive Factors

Earnings performance

Normalized FFO per share beat the Street expectations, showing stronger performance in earnings.

Leasing activity

Leasing momentum continued with a record 686K SF of new leases signed with solid 81.6% retention.

Negative Factors

Leadership uncertainty

There is no update on the CEO search process, creating uncertainty in leadership.

Healthcare Realty Trust Business Overview & Revenue Model

Company Description

Healthcare Realty Trust (HR) is a self-managed real estate investment trust (REIT) that focuses on owning, managing, acquiring, and developing outpatient medical facilities across the United States. The company's portfolio is primarily composed of medical office buildings and healthcare-related facilities that are strategically located near hospital campuses or within key healthcare hubs. Healthcare Realty Trust aims to support healthcare providers by offering high-quality real estate solutions that enhance patient care and operational efficiency.

How the Company Makes Money

Healthcare Realty Trust makes money primarily through leasing its properties to healthcare providers, including hospitals, physician groups, and other medical service entities. The company's revenue model is centered around collecting rental income from these long-term lease agreements, which often include annual rent escalations. Additionally, HR may earn revenue through property management fees for services provided to tenants. Strategic partnerships and acquisitions of properties in high-demand markets also contribute to the company's earnings, allowing it to expand its portfolio and increase rental income potential. The trust's focus on outpatient facilities aligns with trends towards outpatient care, ensuring steady demand for its properties.

Healthcare Realty Trust Financial Statement Overview

Summary

Healthcare Realty Trust exhibits a mixed financial profile. Income statement performance is weak due to declining revenue and persistent net losses. The balance sheet is stable with manageable leverage but shows potential risk from declining equity ratios. Cash flow is a bright spot, with improvements in free cash flow indicating enhanced cash generation capabilities. Overall, the company must address profitability issues to strengthen its financial health.

Income Statement

Healthcare Realty Trust has shown declining revenue over the past year, with a significant drop from $1.34 billion in 2023 to $1.23 billion in 2024. The net income has been negative for several years, indicating ongoing profitability challenges. Gross profit margin is relatively strong at approximately 61.3% in 2024, but the negative net profit margin of -53.1% reveals significant net losses. EBIT and EBITDA margins have shown some strength, with EBITDA margin at approximately 109.3% in 2024, but overall income performance is weak due to persistent net losses.

Balance Sheet

The balance sheet reflects a modest debt-to-equity ratio of 0.57, indicating a manageable level of leverage. However, the equity ratio has decreased from 54% in 2023 to 49.2% in 2024, suggesting reduced equity relative to total assets. Despite this, the company maintains a stable stockholders' equity base. The return on equity is negative due to the net losses, highlighting inefficiencies in utilizing equity to generate profits. Overall, the balance sheet is stable but shows potential risk from declining equity ratios.

Cash Flow

On the cash flow front, operating cash flow has remained positive and stable, demonstrating the company’s ability to generate cash from operations even in the face of net losses. Free cash flow has grown significantly, from $268.8 million in 2023 to $501.6 million in 2024, indicating improved cash generation efficiency. The operating cash flow to net income ratio is not favorable due to negative net income, but the increase in free cash flow is a positive sign for liquidity.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.23B	1.34B	932.64M	534.82M	499.63M
	Gross Profit
756.21M	112.62M	588.60M	322.54M	303.12M
	EBIT
673.09M	54.22M	77.84M	84.88M	79.37M
	EBITDA
295.55M	780.51M	555.62M	287.60M	274.18M
	Net Income Common Stockholders
-654.49M	-278.26M	-106.00M	14.32M	19.19M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
68.92M	25.70M	60.96M	13.18M	15.30M
	Total Assets
10.65B	12.64B	13.85B	4.26B	3.81B
	Total Debt
296.85M	5.30B	5.70B	1.92B	1.71B
	Net Debt
227.93M	5.27B	5.64B	1.91B	1.70B
	Total Liabilities
5.35B	5.71B	6.17B	2.07B	1.86B
	Stockholders Equity
5.23B	6.82B	7.57B	2.19B	1.95B
Cash Flow		Free Cash Flow
501.62M	268.79M	109.20M	131.94M	376.13M
	Operating Cash Flow
501.62M	499.82M	272.75M	232.63M	470.09M
	Investing Cash Flow
900.92M	349.14M	1.63B	-562.47M	-555.17M
	Financing Cash Flow
-1.36B	-884.22M	-1.86B	327.72M	99.72M

Healthcare Realty Trust Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 16.72
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HR, the sentiment is Positive. The current price of 16.72 is above the 20-day moving average (MA) of 16.38, above the 50-day MA of 16.36, and above the 200-day MA of 16.64, indicating a bullish trend. The MACD of 0.09 indicates Negative momentum. The RSI at 55.94 is Neutral, neither overbought nor oversold. The STOCH value of 45.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HR.

Healthcare Realty Trust Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WELL	78 Outperform	$98.70B	186.70	3.32%	1.70%	20.40%	57.80%
DOC	73 Outperform	$14.45B	56.50	3.29%	5.95%	23.82%	-37.59%
LTC	72 Outperform	$1.62B	17.47	9.48%	6.39%	6.54%	-4.13%
VTR	63 Neutral	$31.32B	358.18	0.80%	2.58%	9.48%	―
Sector *	61 Neutral	$4.91B	18.99	-3.12%	7.77%	6.71%	-19.69%
HR	61 Neutral	$5.83B	―	-12.50%	7.46%	-5.62%	-140.10%
MPW	56 Neutral	$3.39B	―	-38.69%	8.16%	14.19%	-331.18%

Healthcare Realty Trust Corporate Events

Healthcare Realty Trust Updates on Rent Collection Challenges

On February 28, 2025, Healthcare Realty Trust announced its participation in Citi’s 2025 Global Property CEO Conference scheduled for March 3-4, 2025, and released an updated investor presentation. Additionally, the company reported partial rent collection from Prospect Medical, which filed for Chapter 11 bankruptcy in January 2025. Healthcare Realty collected $0.4 million in rent for January and February 2025, but there is uncertainty regarding the recovery of additional unpaid rent or the ability to relet the space.

Healthcare Realty Trust Reports Q4 Loss, Leadership Change

Healthcare Realty Trust reported a net loss of $106.8 million for the fourth quarter ending December 31, 2024, and declared a quarterly dividend of $0.31 per share. Despite the loss, the company achieved a normalized FFO per share of $0.40, at the high end of its guidance range, and experienced growth in leasing activities with a record 686,000 square feet of new leases. Furthermore, the company undertook significant capital allocation efforts, closing $522 million in joint ventures and asset sales, and reducing its leverage by repaying a $350 million term loan. Leadership changes were also announced, with Connie Moore appointed as Interim President & CEO, and a search is underway for a permanent leader.

Healthcare Realty Trust Announces Key Leadership Changes

Healthcare Realty Trust has announced key leadership changes with Austen Helfrich appointed as the permanent Executive Vice President and Chief Financial Officer, bringing significant financial expertise from his previous roles. Andrew Loope is set to become the Executive Vice President, General Counsel, and Secretary, taking over from John Bryant who will stay as Senior Vice President, Legal Affairs. These strategic appointments aim to drive long-term shareholder value and continue the company’s growth in the medical real estate sector.

Healthcare Realty Trust Revamps Board for Strategic Growth

Healthcare Realty Trust has revamped its Board of Directors by electing Tom Bohjalian as the Independent Chair and appointing three seasoned industry veterans, David Henry, Glenn Rufrano, and Don Wood, as new independent directors. This strategic move aligns with a cooperation agreement with Starboard Value, aimed at enhancing shareholder value and driving sustainable growth. The changes follow the retirement of several board members, positioning the company for improved execution of its financial and operational objectives.