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National Healthcare Properties, Inc. (NASDAQ:NHP), a real estate investment trust currently trading at $14.53 per share, announced on Wednesday a new estimated per-share net asset value (NAV) of $32.15, as determined by its board of directors. This valuation is based on the company’s real estate assets and other factors as of December 31, 2024. According to InvestingPro analysis, the company is trading at a notably low Price/Book multiple of 0.34x, suggesting potential undervaluation relative to its assets.
The Maryland-based company, which specializes in healthcare-related real estate, disclosed that the board’s decision was informed by independent third-party appraisals from Kroll, LLC. The estimated NAV falls within Kroll’s provided range of $32.15 to $36.96 per share and reflects the fair value of the company’s assets minus liabilities, including the liquidation value of its preferred stock. InvestingPro data reveals the company operates with a significant debt burden, with a debt-to-capital ratio of 0.83 and total debt of $1.15 billion.
In reaching this valuation, the board considered the impact of market conditions, such as interest rates and economic uncertainty for 2025, on the company’s senior housing and outpatient medical facilities. Additionally, the board took into account the company’s internal management functions, which were internalized in September 2024, and the associated costs.
The estimated NAV of $32.15 is a decrease from the previous year’s adjusted NAV of $52.00 per share, which had been updated following a four-for-one reverse stock split in September 2024. The company noted that no further stock dividends are planned, which could affect the NAV by increasing the number of shares outstanding.
Kroll’s appraisal process involved both the Direct Capitalization Method and the Discounted Cash Flow Method, evaluating the company’s real estate assets and considering various factors such as market rents, occupancy rates, and operating income growth. The sensitivity analysis showed that variations in capitalization and discount rates could significantly affect the estimated NAV.
The company emphasized that the estimated NAV does not represent current market value or book value and may not reflect the price at which shares would trade on a national securities exchange or the amount stockholders might receive upon liquidation or sale. Recent financial metrics from InvestingPro show the company faces profitability challenges, with negative EBITDA of $17.38 million and a concerning free cash flow yield. InvestingPro subscribers have access to 13 additional key insights about National Healthcare Properties’ financial health and market position.
The announcement, based on a press release statement, provides investors with an updated assessment of the company’s value, contributing to their understanding of National Healthcare Properties’ financial position as of late 2024. The company’s full financial disclosure can be found in its filings with the U.S. Securities and Exchange Commission.
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