It has been about a month since the last earnings report for Ventas (VTR Quick QuoteVTR - Free Report) . Shares have lost about 3.3% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Ventas due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Ventas' Q1 FFO and Revenues Beat, SHOP NOI Increases

Ventas reported first-quarter 2023 normalized FFO per share of 74 cents, outpacing the Zacks Consensus Estimate of 70 cents. The bottom line was, however, lower than the prior-year quarter’s tally of 79 cents, which included a benefit of $33 million from net Health and Human Services (HHS) grants.

Results reflected better-than-anticipated revenues. Ventas’ same-store cash NOI for the SHOP increased year over year on strong pricing power and margin expansion. SHOP occupancy also improved from the prior-year period. The company maintained its outlook for 2023.

VTR clocked in revenues of $1.08 billion in the first quarter, surpassing the Zacks Consensus Estimate. The figure increased 5.9% year over year.

Per Debra A. Cafaro, chairman and CEO of Ventas, “Our impressive SHOP performance was fueled by robust growth in the U.S. and bolstered by our high-quality, highly occupied Canadian communities. Our senior housing portfolio continues to exhibit significant pricing power, reflecting strong demand and attractive positioning in the marketplace. With favorable demographic demand providing tailwinds across our businesses, our company is in a strong position to excel, and we are re-affirming our Normalized FFO guidance range for the full year.”

Quarter in Detail

In the first quarter, same-store cash NOI growth for the total property portfolio (1,146 assets) increased 8.1% to $419.5 million from the prior-year quarter.

Segment-wise, the same-store cash NOI for the SHOP portfolio (507 assets) climbed 17.4% year over year to $158.6 million, mainly led by the United States communities. The rise was driven by same-store revenue growth of almost 8% and margin expansion of 200 bps. Moreover, the revenue per occupied room (RevPOR) for the total SHOP segment improved more than 6.8% year over year, a record high.

The same-store average occupancy expanded 80 bps year over year to 81.3% in the first quarter for the SHOP portfolio. The upswing was driven by robust demand.

For the office portfolio (327 assets), same-store cash NOI improved 2.1% year over year to $125.4 million. The uptick was backed by continued strong performance in MOBs that witnessed same-store cash NOI growth of more than 3% in six of the past seven quarters. Also, the year-over-year same-store occupancy growth of 50 bps to 91.8% in the MOB segment was a contributing factor.

The triple-net leased portfolio’s (312 assets) same-store cash NOI rose 4.3% year over year to $135.5 million.

Balance-Sheet Position

Ventas exited first-quarter 2023 with cash and cash equivalents of $145.4 million, up from $122.6 million as of Dec 31, 2022.

Moreover, it ended the quarter with $2.41 billion of liquidity. As of Mar 31, 2023, the net debt to further adjusted EBITDA was 6.9, unchanged from the year-ago period.

2023 Outlook Maintained

Ventas reaffirmed its guidance for 2023.

The current-year normalized FFO per share was maintained in the range of $2.90-$3.04.

The total same-store cash NOI growth was unchanged between 6% and 9%. The SHOP segment's same-store cash NOI was retained between 15% and 21%, based on expected year-over-year revenue growth and continuation in occupancy gains.

The office segment's same-store cash NOI was maintained in the range of 2-3%, while the estimation for triple-net leased same-store cash NOI was unchanged at 0-1.5%.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month.

VGM Scores

Currently, Ventas has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Ventas has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Ventas is part of the Zacks REIT and Equity Trust - Other industry. Over the past month, Boston Properties (BXP Quick QuoteBXP - Free Report) , a stock from the same industry, has gained 2.1%. The company reported its results for the quarter ended March 2023 more than a month ago.

Boston Properties reported revenues of $756.88 million in the last reported quarter, representing a year-over-year change of +5.4%. EPS of $0.50 for the same period compares with $1.82 a year ago.

Boston Properties is expected to post earnings of $1.79 per share for the current quarter, representing a year-over-year change of -7.7%. Over the last 30 days, the Zacks Consensus Estimate has changed -0.8%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Boston Properties. Also, the stock has a VGM Score of D.