Is Ventas Inc (VTR) overvalued?
On Equity Rank's model estimate, VTR trades 40% above its fair value. Ventas Inc (VTR) last closed at $88.75; the multi-method model fair value is $63.54.
| Price | Model fair value | Price vs model |
|---|---|---|
| $88.75 | $63.54 | 40% above |
What the answer rests on
- 1 of 8 valuation methods put VTR's value above its price and 7 put it below, so the methods mostly agree.
- To justify today's price, VTR's free cash flow would need to grow about 11.7% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 25.5% a year.
- VTR trades at 171.5 times its last year's earnings, against a median of 26.8 for 107 profitable Real Estate companies.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 12% above to 55% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind VTR's fair value · What prices assume · Other companies