What's in the Offing for Ventas Stock This Earnings Season?

Ventas, Inc. VTR is scheduled to report second-quarter 2025 results on July 30, after market close. The quarterly results are likely to display year-over-year growth in revenues and normalized funds from operations (FFO) per share.

In the last reported quarter, this Chicago-based healthcare real estate investment trust (REIT) delivered a normalized FFO per share of 84 cents, beating the Zacks Consensus Estimate of 82 cents. The quarterly results reflected an increase in same-store cash net operating income, led by higher investments and improved same-store average occupancy in the SHOP segment.

Ventas’ normalized FFO per share surpassed the Zacks Consensus Estimate in three of the trailing four quarters and met in the remaining period, with the average beat being 1.24%. The graph below depicts this surprise history:

Ventas, Inc. Price and EPS Surprise

Ventas, Inc. price-eps-surprise | Ventas, Inc. Quote

Factors at Play

In the second quarter, Ventas’ senior housing operating portfolio (SHOP) is likely to have benefited from an aging U.S. population and a rise in healthcare expenditure by this age cohort, which is generally higher than the average population. With the segment witnessing positive net move-ins, occupancy is expected to have remained high.

A well-diversified tenant base with long-term leases is expected to have contributed well to stable rental revenue generation, boosting the top line.

However, the triple-net leased properties are likely to be affected during the to-be-reported quarter. Further, high interest expenses are expected to have cast a pall on the company’s performance to some extent.

VTR’s Q2 Projections

The Zacks Consensus Estimate for second-quarter resident fees and services is pegged at $977.1 million, suggesting an increase from $817.6 million reported in the year-ago period.

The Zacks Consensus Estimate for second-quarter revenues is currently pegged at $1.37 billion, implying a 14.3% increase from the prior-year quarter’s reported figure.

The consensus mark for outpatient medical and research portfolio rental income for the second quarter is pegged at $222.6 million, indicating an increase from $218.9 million reported in the year-ago period.

However, the Zacks Consensus Estimate for second-quarter triple-net leased properties' rental income is pegged at $153.5 million, suggesting a marginal decrease from the $153.9 million reported in the year-ago period.

Ventas’ activities during the soon-to-be-reported quarter were inadequate to gain analysts’ confidence. The Zacks Consensus Estimate for second-quarter FFO per share has remained unchanged at 85 cents over the past two months. However, the figure implies an increase of 6.3% from the year-ago quarter’s reported number.

What Our Quantitative Model Predicts

Our proven model does not conclusively predict a surprise in terms of FFO per share for Ventas this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.

Ventas currently has an Earnings ESP of -1.10% and carries a Zacks Rank of 3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks That Warrant a Look

Here are two stocks from the broader REIT sector — VICI Properties VICI and SBA Communications SBAC — that you may want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter.

VICI, scheduled to report quarterly numbers on July 30, has an Earnings ESP of +15.43% and carries a Zacks Rank of 3.

SBA Communications is slated to report quarterly numbers on Aug. 4. SBAC has an Earnings ESP of +1.86% and carries a Zacks Rank of 3 presently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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