• If you are wondering whether Medical Properties Trust at around US$5.36 is a potential bargain or a value trap, you are not alone. A closer look at its valuation can help you frame that question more clearly.
• The stock is up 6.8% over the last 7 days and 5.5% year to date. That sits against a 20.0% return over 1 year and much larger declines of 41.4% over 3 years and 64.1% over 5 years.
• Recent news around Medical Properties Trust has largely focused on its balance sheet strength, asset sales, and how it is managing its hospital portfolio, which has been a key focus for investors watching the share price. These updates give context to both the recent short term recovery and the longer term share price pressure.
• On our Simply Wall St model, Medical Properties Trust currently scores 4 out of 6 on our valuation checks. This suggests there are several areas where the stock screens as undervalued. Next we will look at the usual valuation methods before finishing with a different way of thinking about value that can be even more useful.

Approach 1: Medical Properties Trust Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a company might be worth by projecting its future adjusted funds from operations, then discounting those cash flows back to today in dollar terms.

For Medical Properties Trust, the model uses a 2 stage Free Cash Flow to Equity approach based on adjusted funds from operations. The latest twelve months free cash flow is a loss of $1.4b, which means the model relies primarily on expectations for future cash generation rather than recent cash results.

Analysts have provided free cash flow estimates out to 2030, such as $293.09m in 2026 and $413.00m in 2030, with further projections after that extrapolated by Simply Wall St. These projected cash flows are discounted back to today to arrive at an estimated intrinsic value of about $7.42 per share.

With the current share price around $5.36, the DCF output implies a 27.8% discount. On this view, Medical Properties Trust appears undervalued.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Medical Properties Trust is undervalued by 27.8%. Track this in your watchlist or portfolio, or discover 52 more high quality undervalued stocks.

Approach 2: Medical Properties Trust Price vs Sales

For companies where profits are limited or volatile, the P/S ratio can be a useful way to think about valuation because it focuses on revenue instead of earnings that may be affected by one off items or high interest costs.

What investors usually pay for each dollar of sales depends on how they view the company’s growth potential and risk profile. Higher growth and lower perceived risk tend to support a higher P/S multiple, while slower growth or higher risk often come with a lower multiple.

Medical Properties Trust is currently trading on a P/S ratio of 3.19x. That sits below the Health Care REITs industry average P/S of 6.74x. Simply Wall St also calculates a Fair Ratio of 5.75x for Medical Properties Trust, which is an estimate of what the P/S might be given its earnings growth outlook, profit margins, industry, market cap and key risks.

This Fair Ratio aims to be more tailored than a simple comparison with peers or the industry because it ties the valuation back to the company’s own fundamentals and risk profile rather than broad sector averages alone.

Comparing the Fair Ratio of 5.75x with the current P/S of 3.19x, the shares screen as undervalued on this sales based view.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Medical Properties Trust Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simply your story about a company tied directly to your assumptions for fair value, future revenue, earnings and margins.

On Simply Wall St, a Narrative links what you believe is happening at Medical Properties Trust to a concrete financial forecast, then to a fair value that you can compare with the current share price to assess whether the stock looks attractive or stretched.

You build or choose a Narrative on the Community page, where millions of other investors share their views. The fair value in each Narrative updates automatically when fresh information such as news or earnings is added, so your story and numbers stay aligned without extra work.

For example, one Narrative on Medical Properties Trust might assume a cautious outlook with lower long term revenue growth and a higher discount rate. Another might assume stronger revenue growth, healthier margins and a lower discount rate. These differences can lead to very different fair values for the same stock.

Do you think there's more to the story for Medical Properties Trust? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.