Is DRI Healthcare Trust a buy right now?

Its fourth quarter results are in the books and Raymond James analyst Michael W. Freeman still thinks there is money to be made on DRI Healthcare Trust (DRI Healthcare Trust Stock Quote, Chart, News, Analysts, Financials TSX:DHT.UN).

On March 3, DHT reported its Q4 and fiscal 2024 results. In the fourth quarter, the company posted Adjusted EBITDA of $37.0-million on Total Income of $62.3-million.

“2024 was a year of evolution and a step forward for the Trust,” CEO Gary Collins said. “In addition to significant earnings growth compared to the previous year, we advanced our investment strategy, solidified our management team, and strengthened our governance practices. Our team showed great dedication as we worked diligently to enact new procedures with strong internal controls and focused on building better alignment for all stakeholders. Now that we have cleared our material weaknesses, we can look to the future and focus on a new chapter. With significant deployment capacity available against a robust pipeline and a committed team behind us, we are excited for the year to come.”

Freeman says things are improving at DRI.

“Management suggests that its pipeline remains strong, with >$3 bln in opportunities in-view, though, unfortunately, a significant late-stage deal recently fell through due to reasons unrelated to DRI or the asset in question (potential to revisit in the future),” the analyst wrote. “The company continues to aggressively push forward on deal execution, with multiple transactions in mid-stages of development. We remain constructive on DRI given its definitive action resolving its governance-oriented deficiencies, its progress against the goal of internalizing its manager, and its capacity to drive a solid cadence of high-quality royalty transactions; this team is emerging as a premier royalty partner for biotech and biopharma players. We also flag DRI as a business with limited exposure to tariff-related macro volatility given it is a non-cyclical, hard currency, US dollar-based business. With its series of big, internal lifts nearing completion, its deal pipeline brimming, and its ample supply of available capital, we see DRI playing offence for the balance of FY25, handily meeting its guidance.”

In a research update to clients March 5, Freeman maintained his “Outperform 2” rating and $22.00 price target on DRI.

The analyst thinks the company will post EPS of $2.55 on revenue of $174.0-million in fiscal 2025.