Diversified Healthcare Trust (DHC) Shares: Cheap or Risky?


Diversified Healthcare Trust (NASDAQ:DHC) saw a downside of -6.50% to close Tuesday at $0.73 after subtracting -$0.05 on the day. The 5-day average trading volume is 3,051,180 shares of the company’s common stock. It has gained $0.8100 in the past week and touched a new high 3 times within the past 5 days. An average of 2,963,450 shares of the company has been traded in the last 20 days, and the 50-day average volume stands at 4,703,626.

DHC’s 1-month performance is 13.56% or $0.0704 on its low of $0.6229 reached on 12/28/22. The company’s shares have touched a 52-week low of $0.61 and high of $3.28, with the stock’s rally to the 52-week high happening on 01/11/23. YTD, DHC has achieved 12.37% or $0.0800 and has reached a new high 6 times. However, the current price is down -77.84% from the 52-week high price.

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Valuation Metrics

DHC stock has a beta of 1.73. Moving on to other valuation ratios, the trailing price-to-sales (P/S) ratio is 0.13 while the price-to-book (PB) in the most recent quarter is 0.06.

As well, the company’s long term debt to equity for the quarter ending June 29 was 1.13, while the total debt to equity was 1.13.. In terms of profitability, the gross margin trailing 12 months is 14.50%. The firm’s gross profit as reported stood at -$31.15 million against revenue of $1.38 billion.

Earnings Surprise

For the quarterly period ending June 29 this year, Net income and sales went up compared to those figures reported in the previous quarter. Net income shrunk -9.63% to -$81.49 million, while revenue of -$109.38 million was -34.23% off the previous quarter. Analysts expected DHC to announce -$0.26 per share in earnings in its latest quarter, but it posted -$0.46, representing a -76.90% surprise. EBITDA for the quarter stood at more than $29.31 million. Shareholders hold equity totaling $239.7 million.

Let’s look briefly at Diversified Healthcare Trust (DHC) price momentum from a technical analysis perspective. The 9-day relative strength index as at close on 24 January was 45.35% to suggest the stock is trending Neutral, with historical volatility in this time period at 69.22%.

The stock’s 5-day moving average is $0.7483, reflecting a +0.43% or $0.0031 change from its current price. DHC is currently trading +15.68% above its 20-day SMA, -51.55% above its 100-day SMA. However, the stock’s current price level is away from the SMA50 by -37.88% and SMA200 by-74.85%.

Stochastic %K and %D was 48.09% and 49.31% and the average true range (ATR) pointed at 0.0588. The RSI (14) points at 44.98%, while the 14-day stochastic is at 31.81% with the period’s ATR at 0.0609. The stock’s 9-day MACD Oscillator is pointing at -0.0086 and -0.0064 on the 14-day charts.

Analyst Ratings

In the most recent analyst report for Diversified Healthcare Trust (NASDAQ: DHC), Wells Fargo downgraded it to an Underweight rating. They previously had an Equal weight rating on the stock. Analysts offering their rating for DHC stock have a consensus rating for the stock as Hold. Currently, 1 brokerage advisors rate DHC as a “sell,”, while 1 advise that investors “Hold.” 1 analysts have rated the stock as underweight. 0 rates the stock as overweight while 1 have offered a “buy” rating.

What is DHC’s price target for the next 12 months?

Analysts have a consensus price target ranging from a low of $0.80 and a high of $4.50, with their median price target at $1.00. Looking at these predictions, the average price target given by analysts is for Diversified Healthcare Trust (DHC) stock is $2.10.


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