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BrightSpire Capital (BRSP)
NYSE:BRSP
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BrightSpire Capital (BRSP) AI Stock Analysis

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BRSP

BrightSpire Capital

(NYSE:BRSP)

Rating:57Neutral
Price Target:
$5.00
▲(0.60%Upside)
The overall score reflects financial and operational challenges, with profitability issues being the most significant concern. Despite favorable cash flow and a strong dividend yield, high leverage and market volatility present substantial risks. The earnings call highlighted positive liquidity management but also underscored ongoing market challenges.
Positive Factors
Credit Quality
The watch list declined to 16% of the loan portfolio from 18%, indicating progress in credit quality.
Earnings
Adjusted distributable EPS covered the quarterly dividend with a coverage ratio of 113%.
Loan Portfolio
Management expects the loan portfolio to see net growth with a target size of at least $3.0B.
Negative Factors
CECL Reserve
The CECL reserve increased by $10.4M despite reducing its total watchlist size.
Loan Downgrades
BRSP saw two loans downgraded, including a Las Vegas multifamily asset loan and a Santa Clara land loan.
Realized Loss
The company took a ($9M) realized loss on an REO foreclosure.

BrightSpire Capital (BRSP) vs. SPDR S&P 500 ETF (SPY)

BrightSpire Capital Business Overview & Revenue Model

Company DescriptionBrightSpire Capital, Inc. operates as a commercial real estate (CRE) credit real estate investment trust in the United States. It focuses on originating, acquiring, financing, and managing a portfolio of CRE senior mortgage loans, mezzanine loans, preferred equity, debt securities, and net leased properties. The company qualifies as a real estate investment trust for federal income tax purposes. The company was formerly known as Colony Credit Real Estate, Inc. and changed its name to BrightSpire Capital, Inc. in June 2021. BrightSpire Capital, Inc. was incorporated in 2017 and is headquartered in New York, New York.
How the Company Makes MoneyBrightSpire Capital makes money through various revenue streams primarily centered around its investment in commercial real estate debt and equity. The company generates income from interest earned on its loan portfolios, rental income from owned properties, and capital gains from the sale of assets. Additionally, BrightSpire Capital may engage in strategic partnerships or joint ventures with other real estate or financial entities to enhance its investment opportunities and diversify its income sources. The firm's careful selection of investment opportunities, along with its focus on maintaining a balanced and diversified portfolio, plays a significant role in its profitability.

BrightSpire Capital Earnings Call Summary

Earnings Call Date:Jul 29, 2025
(Q1-2025)
|
% Change Since: 1.43%|
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Neutral
The earnings call presents a mixed outlook with strong liquidity and progress in portfolio management as positive highlights. However, ongoing market volatility, challenges in loan origination, and valuation decline present significant concerns. The company's efforts to maintain its dividend and manage its portfolio are promising, but the macroeconomic environment poses risks.
Q1-2025 Updates
Positive Updates
Strong Liquidity Position
The company reported current liquidity of $310 million, with $145 million in unrestricted cash and $56 million in approved but undrawn borrowings available on warehouse lines.
Positive Loan Inquiries and Pipeline
Despite market volatility, the company has seen a considerable increase in loan inquiries and is actively evaluating and quoting new loans daily.
Progress in Portfolio Management
For the first time since 2022, year-to-date deployments have outpaced repayments, CECL levels have remained stable, and watch list exposure has been reduced.
Successful REO Asset Sales
The company is in the final stages of exiting its Phoenix multifamily property and has sold one REO office property for $5 million, with strong interest in remaining REO multifamily properties.
Share Repurchase Program
The company repurchased approximately 200,000 shares at an average price of $5.59 and is trading at a 45% discount to its undepreciated book value.
Negative Updates
Market Volatility and Spread Widening
The market has experienced tremendous volatility due to ongoing tariff discussions, leading to wider credit spreads and uncertainties in the commercial real estate market.
Challenges in Loan Origination
Many borrowers are seeking equity-neutral transactions, posing challenges for refinancing, and transaction volume remains below historic levels.
Valuation Decline
Since the start of April, the mortgage REIT sector has experienced a significant decline in valuation.
Watch List and Default Issues
San Jose hotel loan remains in default, and the total watch list loan exposure stands at $396 million, accounting for 16% of the loan portfolio.
Slight Decrease in Book Value
Quarter-over-quarter, total company GAAP net book value decreased from $8.08 to $7.92 per share.
Company Guidance
During the BrightSpire Capital Inc. First Quarter 2025 earnings call, the company provided guidance on various financial metrics and market conditions. The company reported first-quarter GAAP net income attributable to common stockholders of $5.3 million, or $0.04 per share, as well as adjusted distributable earnings of $20.1 million, or $0.16 per share. They highlighted their current liquidity at $310 million, with $145 million in unrestricted cash and approximately $56 million in approved but undrawn borrowings. The GAAP net book value was reported at $7.92 per share, while the undepreciated book value stood at $8.75 per share as of March 31, 2025. Management noted an increase in loan inquiries and a pickup in investment sales, despite transaction volumes being below historic levels. They also emphasized the importance of growing the loan portfolio to $3.5 billion to sustain and potentially grow the dividend, with a current target to reach a leverage level of approximately 3.3 times. Additionally, they discussed the impact of lower interest rates and market volatility on their strategies and expressed optimism about the ongoing improvement of their balance sheet and maintaining their dividend.

BrightSpire Capital Financial Statement Overview

Summary
BrightSpire Capital's financial performance shows significant challenges with profitability, as indicated by negative net profit margins and ongoing net losses. While the cash flow is stable and positive, the high leverage poses financial risks.
Income Statement
45
Neutral
BrightSpire Capital has shown volatility in its revenue and profitability metrics over the years. The TTM data reveals a negative net profit margin and a declining revenue trend compared to prior periods. The gross profit margin is relatively stable, but the negative net income indicates challenges in cost management or other operational inefficiencies. Despite a positive gross profit margin, the consistent net losses underscore significant profitability issues.
Balance Sheet
52
Neutral
The balance sheet shows a high debt-to-equity ratio, reflecting significant leverage, which can be risky if not managed well. However, the equity ratio remains reasonably stable, indicating a consistent proportion of equity financing. The return on equity is negative due to net losses, highlighting profitability challenges. Overall, while the company maintains a stable equity base, high leverage poses potential financial risks.
Cash Flow
60
Neutral
Cash flow metrics indicate a robust operating cash flow relative to net income, suggesting effective cash management despite net losses. The free cash flow remains positive, which is a strength, indicating the company's ability to generate liquidity from operations. However, fluctuations in cash flow components and significant financing activities reflect operational adjustments and potential financial instability.
Breakdown
Income Statement
Total Revenue
Gross Profit
EBITDA
Net Income
Balance Sheet
Total Assets
Cash, Cash Equivalents and Short-Term Investments
Total Debt
Total Liabilities
Stockholders Equity
Cash Flow
Free Cash Flow
Operating Cash Flow
Investing Cash Flow
Financing Cash Flow

BrightSpire Capital Technical Analysis

Technical Analysis Sentiment
Negative
Last Price4.97
Price Trends
50DMA
5.03
Negative
100DMA
5.05
Negative
200DMA
5.26
Negative
Market Momentum
MACD
-0.03
Positive
RSI
46.94
Neutral
STOCH
37.88
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BRSP, the sentiment is Negative. The current price of 4.97 is below the 20-day moving average (MA) of 5.04, below the 50-day MA of 5.03, and below the 200-day MA of 5.26, indicating a bearish trend. The MACD of -0.03 indicates Positive momentum. The RSI at 46.94 is Neutral, neither overbought nor oversold. The STOCH value of 37.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BRSP.

BrightSpire Capital Risk Analysis

BrightSpire Capital disclosed 64 risk factors in its most recent earnings report. BrightSpire Capital reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

BrightSpire Capital Peers Comparison

Overall Rating
UnderperformOutperform
Sector (54)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$500.56M17.139.57%7.89%1.82%-1.03%
69
Neutral
$633.68M47.037.51%8.99%3.01%
68
Neutral
$713.48M123.513.05%9.93%-12.13%-14.54%
61
Neutral
$581.30M36.87-1.05%8.61%17.48%-172.41%
57
Neutral
$640.57M-6.29%12.88%-14.92%-3.27%
56
Neutral
$507.10M-6.09%6.41%-8.41%88.62%
54
Neutral
$1.24B3.840.67%6.03%-2.39%-129.28%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
BRSP
BrightSpire Capital
4.97
-0.55
-9.96%
CTO
CTO Realty Growth
17.34
-1.26
-6.77%
GOOD
Gladstone Commercial
13.35
-0.61
-4.37%
OLP
One Liberty Properties
22.82
-1.96
-7.91%
AHH
Armada Hoffler Properties
6.95
-4.23
-37.84%
PKST
Peakstone Realty Trust
14.04
1.16
9.01%

BrightSpire Capital Corporate Events

Executive/Board ChangesShareholder Meetings
BrightSpire Capital Holds Annual Stockholders Meeting
Neutral
May 14, 2025

On May 14, 2025, BrightSpire Capital held its annual meeting of stockholders, where several key decisions were made. The stockholders elected six directors to serve until the 2026 meeting, approved executive compensation for 2024, decided on an annual advisory vote on executive compensation, and ratified Deloitte & Touche LLP as the independent public accounting firm for 2025. These decisions reflect the company’s commitment to maintaining transparent governance and aligning executive pay with shareholder interests.

The most recent analyst rating on (BRSP) stock is a Buy with a $9.00 price target. To see the full list of analyst forecasts on BrightSpire Capital stock, see the BRSP Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 09, 2025