Value
5.6/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 5.1 |
| EV/EBITDA | 2.4 |
| p ocf | 7.5 |
| Analyst target | 6.0 |
- ▸P/OCF: 13.4x (FFO proxy — REITs gated off P/E)
NHI · Why this verdict
Why National Health Investors (NHI) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score6.7/10
ConfidenceMEDIUM
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
National Health Investors is a healthcare REIT with strong 37% margins, excellent free cash flow conversion, and analyst upside potential, but two consecutive earnings misses, negative price momentum, and a dividend coverage concern limit near-term entry attractiveness.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
NHI generates 37% net margins, converts 140% of net income to free cash flow, and carries a Rule of 40 score of 49, reflecting a high-quality income-oriented REIT structure with durable cash generation relative to its healthcare facility portfolio. Quality breakdown | Free cash flow conversion remains above 120% of net income and operating margin stays above 30% over the next 12 months. | ↑Improving |
| CounterThe dividend coverage warning in the analysis indicates the distribution may not be fully supported by sustainable cash flows, suggesting the headline FCF quality may reflect timing rather than structural strength. | ||
NHI has missed earnings estimates in the 2 most recent quarters, with surprises of -10.5% and -5.2%, indicating that operating results are running below the level analysts expected when they set their forward estimates. Earnings | NHI returns to meeting or beating consensus earnings in the next 2 quarterly reports without a surprise worse than -5%. | →Stable |
| CounterREITs are commonly valued on funds from operations rather than GAAP earnings, and per-share FFO may show a different trend than the GAAP EPS comparisons recorded here. | ||
The stock's momentum score of 3.6 falls below the minimum acceptable threshold of 4.5, and while the 200-day moving average is still rising, the stock is trading below it — a pullback within an uptrend that has not yet confirmed reversal. Momentum breakdown | Price recovers above the 200-day moving average and momentum score rises above 4.5 within 6 months. | Tripped↓Deteriorating |
| CounterMACD is bullish and the 200-day MA slope is positive at +0.5%/30 days, suggesting the moving average divergence represents a temporary pullback rather than a deteriorating trend. | ||
Analysts carry positive sentiment on NHI with a news sentiment reading and upside to consensus price target, and the stock's free cash flow and operational quality rank favorably relative to healthcare REIT peers. Sentiment breakdown | Analyst consensus price target rises above $77 within 12 months, restoring at least 8% upside from current levels. | Tripped→Stable |
| CounterWith only 4.3% upside to current analyst consensus targets and declining revenue, the margin of safety for new investors is very thin. | ||
NHI generates 37% net margins, converts 140% of net income to free cash flow, and carries a Rule of 40 score of 49, reflecting a high-quality income-oriented REIT structure with durable cash generation relative to its healthcare facility portfolio.
↑ImprovingQuality breakdown
- Expectation
- Free cash flow conversion remains above 120% of net income and operating margin stays above 30% over the next 12 months.
CounterThe dividend coverage warning in the analysis indicates the distribution may not be fully supported by sustainable cash flows, suggesting the headline FCF quality may reflect timing rather than structural strength.
NHI has missed earnings estimates in the 2 most recent quarters, with surprises of -10.5% and -5.2%, indicating that operating results are running below the level analysts expected when they set their forward estimates.
→StableEarnings
- Expectation
- NHI returns to meeting or beating consensus earnings in the next 2 quarterly reports without a surprise worse than -5%.
CounterREITs are commonly valued on funds from operations rather than GAAP earnings, and per-share FFO may show a different trend than the GAAP EPS comparisons recorded here.
The stock's momentum score of 3.6 falls below the minimum acceptable threshold of 4.5, and while the 200-day moving average is still rising, the stock is trading below it — a pullback within an uptrend that has not yet confirmed reversal.
Tripped↓DeterioratingMomentum breakdown
- Expectation
- Price recovers above the 200-day moving average and momentum score rises above 4.5 within 6 months.
CounterMACD is bullish and the 200-day MA slope is positive at +0.5%/30 days, suggesting the moving average divergence represents a temporary pullback rather than a deteriorating trend.
Analysts carry positive sentiment on NHI with a news sentiment reading and upside to consensus price target, and the stock's free cash flow and operational quality rank favorably relative to healthcare REIT peers.
Tripped→StableSentiment breakdown
- Expectation
- Analyst consensus price target rises above $77 within 12 months, restoring at least 8% upside from current levels.
CounterWith only 4.3% upside to current analyst consensus targets and declining revenue, the margin of safety for new investors is very thin.
Per-dimension breakdown
Quality
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.6 |
| ROA | 2.9 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 6.5 |
| FCF quality | 7.2 |
| Moat | 6.4 |
| Rule of 40 | 9.5 |
| Piotroski F | 8.9 |
- ▸Strong margins: 38%
- ▸Rule of 40: 73 (elite)
- ▸Strong Piotroski F-Score: 8/9
- ▸High-quality business
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 34% YoY
Momentum
3.5/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 0.0 |
| OBV | 10.0 |
| MA position | 1.5 |
| Volume | 3.2 |
- ▸Capitulation risk (RSI 24, below 200MA)
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope flat
Sentiment
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.8 |
| Price target | 7.8 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (8.0) — signal dampened
- ▸Analyst upside: 21%
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
6.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.3 |
| quality rank | 7.5 |
| growth rank | 7.5 |
Technical
8.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 9.3 |
| support resistance | 9.7 |
| 52w position | 5.1 |
Risk (lower is worse)
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.7 |
| days to cover | 3.6 |
| volatility | 7.3 |
| put call | 0.0 |
| implied vol | 6.7 |
| beta | 9.7 |
| debt equity | 6.2 |
- ▸Elevated put/call: 2.50
Catalyst
2.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 2.2 |
- ▸Earnings concerns: 1B/3M
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Growth is cheap relative to earnings, but the technical setup has not yet produced a breakout above resistance (PEG 0.46, quality 7.5/10, growth 10.0/10). | News modifier -1 (STRONG_BUY_WAIT → HOLD_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_C2_GARP_WAIT|L3:NEWS_MOD=-1Passed (5)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:44d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (3)
- MOMENTUM:3.5<4.5
- ASYMMETRY:1.1<1.5@spot
- DEATH_CROSS:HARD_BLOCK
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
1.13
Upside
+5.7%
Downside
5.0%
Sizing output
AVOID
SetupFalling Knife — Death cross, below all MAs, RSI 24, MACD bearish
EdgeTemporary headwind — High quality (7.5) with weak momentum (3.5)
SuitabilityAggressive — MCap $3.3B<$5B
Investment implication
The C-path quality+growth combination triggered the HOLD_IF_HOLDING verdict: quality 7.5 and growth 10.0 both clear their thresholds, with asymmetric R:R of 1.13 supporting the read.
The strongest dimensions are Growth at 10.0, Technical at 8.0, and Quality at 7.5; the weakest are Catalyst at 2.4, Momentum at 3.5, and Value at 5.6. The V9 engine flagged 3 failed gates with 1 warning, producing an asymmetric reward-to-risk of 1.13 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Reit Quality Cash Conversion
Trip ifFree cash flow conversion falls below 100% of net income for 2 consecutive quarters or operating margin drops below 25%.
- P2Consecutive Earnings Misses
Trip ifEPS surprise falls below -15% in at least 2 of the next 3 quarters.
- P3Price Momentum Below TrendTripped
Trip ifPrice drops below $66.78 stop-loss level or 200-day moving average slope turns negative.
- P4Analyst Upside SentimentTripped
Trip ifAnalyst consensus price target declines below $68 or revenue declines more than 8% year-over-year.