Healthpeak Properties Faces Challenges Despite Solid Growth
Stock Performance Dips Amidst Strong Revenue Gains
Healthpeak Properties, Inc. (DOC), based in Denver, Colorado, is a diverse real estate investment trust that specializes in healthcare real estate. With tenants including laboratories, outpatient medical facilities, and continuing care retirement communities (CCRC), Healthpeak boasts a market capitalization of $14.1 billion. The company has built extensive operations across the U.S., managing hundreds of properties.
As a large-cap stock, Healthpeak’s valuation surpassing $10 billion is typical for a firm with its established history. The company emphasizes a clear strategy, focused efforts, and calculated decisions to drive sustainable long-term growth.
Despite the strong foundation, Healthpeak’s stock has struggled recently, dropping over 13.2% since reaching a 52-week high of $23.26 on October 24. Additionally, DOC stock declined 10.6% in three months, underperforming the Real Estate Select Sector SPDR Fund (XLRE), which fell by 9.6% during the same period.
Looking at the long-term picture, Healthpeak’s stock increased nearly 4.9% over the past six months, which is slightly lower than XLRE’s 5.4% gain. In the last 52 weeks, DOC’s overall return stands at 2.4%, just above XLRE’s 2% return.
To understand Healthpeak’s market position, note that DOC stock has mostly remained above its 200-day moving average since early May, while it has fluctuated below its 50-day moving average since early November.
Despite reporting strong revenue growth, the company’s stock price fell by 3.1% following the announcement of its Q3 results on October 24. Healthpeak experienced a remarkable 30.3% year-over-year increase in rental and related revenues, which reached $543.3 million. Its total revenues grew by 25.9% from the previous year’s quarter, amounting to $700.4 million.
Healthpeak’s same-store net operating income (NOI) rose by 4.1%. However, rising interest expenses ultimately impacted profitability. While adjusted funds from operations (FFO) saw a notable 27.5% year-over-year increase to $320.8 million, the FFO per share remained stable at $0.45, attributed to an increased share count that may have disappointed investors.
Compared to Healthpeak, its competitor Omega Healthcare Investors, Inc. (OHI) has outperformed significantly, posting a 14.9% increase over the last six months and a remarkable 23.6% rise over the past year.
A survey of 19 analysts tracking DOC stock shows a consensus rating of “Moderate Buy.” The average price target of $25.19 suggests a potential upside of 24.8% from current levels.
On the date of publication, Aditya Sarawgi did not hold any direct or indirect positions in the securities mentioned in this article. All information and data in this article are for informational purposes only. For further details, please refer to the Barchart Disclosure Policy found here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
