Medical Properties Trust, Inc. (MPW) Is a Trending Stock: Facts to Know Before Betting on It

Medical Properties (MPW) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.Shares of this health care real estate investment trust have returned +17.9% over the past month versus the Zacks S&P 500 composite's +4.3% change. The Zacks REIT and Equity Trust - Other industry, to which Medical Properties belongs, has gained 7.5% over this period. Now the key question is: Where could the stock be headed in the near term?While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.Revisions to Earnings EstimatesRather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings estimates for a company go up, the fair value for its stock goes up as well. And when a stock's fair value is higher than its current market price, investors tend to buy the stock, resulting in its price moving upward. Because of this, empirical studies indicate a strong correlation between trends in earnings estimate revisions and short-term stock price movements.For the current quarter, Medical Properties is expected to post earnings of $0.16 per share, indicating a change of -55.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -10% over the last 30 days.For the current fiscal year, the consensus earnings estimate of $0.78 points to a change of -50.9% from the prior year. Over the last 30 days, this estimate has changed -14.7%.For the next fiscal year, the consensus earnings estimate of $0.58 indicates a change of -26% from what Medical Properties is expected to report a year ago. Over the past month, the estimate has changed -14.7%.With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #4 (Sell) for Medical Properties.The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:12 Month EPSProjected Revenue GrowthWhile earnings growth is arguably the most superior indicator of a company's financial health, nothing happens as such if a business isn't able to grow its revenues. After all, it's nearly impossible for a company to increase its earnings for an extended period without increasing its revenues. So, it's important to know a company's potential revenue growth.In the case of Medical Properties, the consensus sales estimate of $220.48 million for the current quarter points to a year-over-year change of -280.2%. The $984.18 million and $939.1 million estimates for the current and next fiscal years indicate changes of +12.9% and -4.6%, respectively.Last Reported Results and Surprise HistoryMedical Properties reported revenues of $225.83 million in the last reported quarter, representing a year-over-year change of -26.3%. EPS of -$1.34 for the same period compares with $0.19 a year ago.Compared to the Zacks Consensus Estimate of $241.18 million, the reported revenues represent a surprise of -6.37%. The EPS surprise was -20%.Over the last four quarters, Medical Properties surpassed consensus EPS estimates two times. The company topped consensus revenue estimates just once over this period.ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.Medical Properties is graded C on this front, indicating that it is trading at par with its peers. Click here to see the values of some of the valuation metrics that have driven this grade.Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Medical Properties. However, its Zacks Rank #4 does suggest that it may underperform the broader market in the near term.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Medical Properties Trust, Inc. (MPW): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks