Value
4.0/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 3.9 |
| EV/EBITDA | 1.1 |
| p ocf | 6.9 |
| Analyst target | 4.0 |
- ▸P/OCF: 15.4x (FFO proxy — REITs gated off P/E)
NHI · Why this verdict
Why National Health Investors (NHI) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.0/10
ConfidenceMEDIUM
MacroNEUTRAL
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. | →Stable |
| 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. | →Stable |
| 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. | →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.
→StableQuality 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.
→StableMomentum 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.
→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.
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.
Per-dimension breakdown
Quality
6.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 3.3 |
| ROA | 2.9 |
| Gross margin | 10.0 |
| Op margin | 10.0 |
| Net margin | 10.0 |
| Current ratio | 2.4 |
| FCF quality | 9.7 |
| Moat | 4.6 |
| Rule of 40 | 8.1 |
| Piotroski F | 6.7 |
- ▸Strong margins: 37%
- ▸Excellent cash conversion: 140% FCF/NI
- ▸No competitive moat
- ▸Rule of 40: 49 (pass)
Growth
3.1/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 1.9 |
| EPS growth | 4.3 |
- ▸Declining revenue: -3%
Momentum
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.2 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 7.5 |
| Volume | 0.3 |
- ▸Overbought (RSI 76)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat/negative + RSI 76 (late-cycle distribution risk)
Sentiment
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.8 |
| Price target | 6.0 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (8.0) — signal dampened
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸Negligible insider buying — $167,027 (0.004% of mkt cap)
Peer rank
4.7/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 4.6 |
| quality rank | 7.5 |
| growth rank | 1.9 |
Technical
2.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.9 |
| support resistance | 0.3 |
| 52w position | 7.4 |
Risk (lower is worse)
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.0 |
| days to cover | 6.3 |
| volatility | 6.6 |
| put call | 10.0 |
| implied vol | 4.1 |
| beta | 9.8 |
| debt equity | 5.1 |
Catalyst
3.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 2.9 |
| dividend safety | 3.5 |
- ▸Earnings concerns: 2B/2M
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:6.4>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:33d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.5=NEGATIVE
Warning (2)
- DEATH_CROSS:momentum=6.4>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.52
Upside
-7.0%
Downside
13.4%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 76
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $3.8B<$5B
Investment implication
The F-path SELL output reflects an overall score of 5.0 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Risk (lower is worse) at 7.1) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.5=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.52 — supplementary context, not the trigger for this path.
The strongest dimensions are Risk (lower is worse) at 7.1, Quality at 6.8, and Momentum at 6.4; the weakest are Technical at 2.9, Growth at 3.1, and Catalyst at 3.9. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of -0.52 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 Trend
Trip ifPrice drops below $66.78 stop-loss level or 200-day moving average slope turns negative.
- P4Analyst Upside Sentiment
Trip ifAnalyst consensus price target declines below $68 or revenue declines more than 8% year-over-year.