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BrightSpire Capital (BRSP)
NYSE:BRSP
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BrightSpire Capital
(NYSE:BRSP)
47Neutral
Positive Factors
Credit Quality
Credit quality is improving, with a decrease in the number of loans on the watch list and a decline in general CECL reserves.
Financial Performance
The company's shares are considered undervalued at current levels, providing a strong risk-reward potential.
Liquidity and Capital Deployment
The company has increased liquidity by 31% and maintains a strong cash position, supporting further stock repurchases and new originations.
Negative Factors
CECL Reserve Increase
GAAP earnings were negatively impacted by a $1M, or $0.01 per share, net increase to CECL reserves.
Impairment Charges
BrightSpire reported non-GAAP impairment charges associated with the accumulated depreciation related to nine legacy net lease properties in Norway.
Loan Downgrades
The company saw two loans downgraded in 4Q, including a Las Vegas multifamily asset loan and a Santa Clara land loan.
BrightSpire Capital (BRSP) vs. S&P 500 (SPY)
Market Cap
$648.06M
Dividend Yield14.26%
Average Volume (3M)886.88K
Price to Earnings (P/E)―
Beta (1Y)1.22
Revenue Growth-11.51%
EPS Growth-756.83%
CountryUS
Employees48
SectorReal Estate
Sector Strength83
IndustryREIT - Diversified
Share Statistics
EPS (TTM)-1.04
Shares Outstanding130,658,170
10 Day Avg. Volume678,661
30 Day Avg. Volume886,883
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap4.31
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit17.52
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$7.21Price Target Upside42.77% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
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 generates revenue primarily through the interest and fees collected from its real estate debt investments. The company's key revenue streams include income from senior mortgage loans, mezzanine loans, and preferred equity investments. Additionally, BrightSpire Capital profits from net lease real estate investments by collecting rental income from its properties. The company's earnings are significantly influenced by factors such as interest rate fluctuations, the performance of the commercial real estate market, and the creditworthiness of its borrowers. Strategic partnerships with financial institutions and real estate operators also play a crucial role in enhancing its deal flow and investment opportunities, thereby contributing to its revenue growth.
BrightSpire Capital Financial Statement Overview
Summary
BrightSpire Capital faces significant financial challenges with declining revenues and consistent net losses. Although leverage reduction and positive cash flow offer some hope, major strategic changes are needed to improve profitability.Income Statement
The income statement shows a troubling picture with declining revenue and significant net losses over recent years. The company's total revenue dropped to zero in 2024, from $392.1 million in 2023. Net income has been negative in four of the past five years, with a sharp decline in 2024. EBIT and EBITDA margins have fluctuated, with negative EBITDA in 2024 reflecting operational challenges.45
Neutral
Balance Sheet
BrightSpire Capital's balance sheet displays a moderate financial position. The debt-to-equity ratio improved to 0.59 in 2024 from 2.14 in 2023, indicating reduced leverage. However, stockholders' equity has decreased over the years. The equity ratio stands at 28.1% in 2024, demonstrating some stability, but a declining asset base is a concern.55
Neutral
Cash Flow
The cash flow statement highlights a mixed performance. Operating cash flow and free cash flow are positive in 2024, but have decreased compared to previous years. The free cash flow to net income ratio is not meaningful due to negative net income, yet the company managed to maintain positive free cash flow, suggesting some operational resilience.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 347.22M | 392.11M | 358.54M | 323.09M | 424.35M | Gross Profit |
| 159.42M | 197.81M | 193.07M | 191.86M | 212.37M | EBIT |
| 102.44M | 0.00 | 77.92M | 169.13M | -109.11M | EBITDA |
| -66.81M | 35.91M | 112.52M | 205.63M | -49.35M | Net Income Common Stockholders |
| -131.98M | -15.55M | 45.79M | 26.53M | -240.41M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 302.17M | 257.51M | 306.32M | 259.72M | 485.21M | Total Assets |
| 3.72B | 4.20B | 4.75B | 5.64B | 6.21B | Total Debt |
| 619.05M | 2.74B | 3.19B | 3.97B | 4.10B | Net Debt |
| 316.88M | 2.48B | 2.88B | 3.71B | 3.63B | Total Liabilities |
| 2.68B | 2.92B | 3.36B | 4.15B | 4.25B | Stockholders Equity |
| 1.05B | 1.28B | 1.39B | 1.46B | 1.67B |
| Cash Flow | Free Cash Flow | |||
| 103.41M | 137.62M | 121.31M | -31.19M | 73.15M | Operating Cash Flow |
| 103.41M | 137.62M | 125.28M | -21.27M | 96.36M | Investing Cash Flow |
| 313.08M | 384.16M | 89.34M | -555.79M | 1.00B | Financing Cash Flow |
| -327.95M | -558.60M | -161.45M | 384.36M | -754.06M |
BrightSpire Capital Technical Analysis
Neutral
5.05
Price Trends
5.40
Negative
5.52
Negative
5.48
Negative
Market Momentum
-0.16
Negative
53.44
Neutral
96.02
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BRSP, the sentiment is Neutral. The current price of 5.05 is above the 20-day moving average (MA) of 4.76, below the 50-day MA of 5.40, and below the 200-day MA of 5.48, indicating a neutral trend. The MACD of -0.16 indicates Negative momentum. The RSI at 53.44 is Neutral, neither overbought nor oversold. The STOCH value of 96.02 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $649.57M | 53.29 | 7.10% | 8.50% | 1.22% | ― | |
66 Neutral | $691.00M | 28.63 | 5.73% | 11.23% | 6.17% | ― | |
63 Neutral | $520.89M | 17.18 | 9.80% | 7.50% | -0.09% | 1.93% | |
60 Neutral | $600.11M | 36.87 | -0.37% | 8.45% | 14.11% | -667.02% | |
59 Neutral | $2.74B | 11.73 | 0.14% | 8782.99% | 5.34% | -16.62% | |
58 Neutral | $437.84M | ― | -0.95% | 7.56% | -10.31% | 98.15% | |
47 Neutral | $648.06M | ― | -11.39% | 14.26% | -11.51% | -756.83% |
* Real Estate Sector Average
Performance Comparison
BRSP
BrightSpire Capital
5.05
-0.53
-9.50%
CTO
CTO Realty Growth
18.18
2.18
13.62%
GOOD
Gladstone Commercial
14.14
1.78
14.40%
OLP
One Liberty Properties
24.25
2.86
13.37%
AHH
Armada Hoffler Properties
6.85
-2.92
-29.89%
PKST
Peakstone Realty Trust
11.71
-1.23
-9.51%
BrightSpire Capital Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q4-2024)
| % Change Since: 0.00%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call presented both positive and negative aspects. BrightSpire Capital showcased proactive asset management strategies, such as new loan originations and REO sales, alongside maintaining dividend coverage. However, financial strain was evident with a GAAP net loss and substantial watch list exposure, indicating ongoing challenges in the interest rate and lending environment.Q4-2024 Updates
Positive Updates
New Loan Originations
BrightSpire Capital funded five new loans totaling $119 million with another $59 million in closing, all in the multifamily segment, signaling a proactive approach in rebuilding their loan book.
Significant Progress in REO Sales
The company completed the sale of an Oakland office property and received substantial repayments across various loans resulting in total aggregate repayments and resolution proceeds of $198 million.
Dividend Coverage
BrightSpire Capital covered their dividend with an adjusted DE of $0.18 per share, maintaining a strategic focus on sustaining positive dividend coverage.
Negative Updates
GAAP Net Loss
The company reported a fourth quarter GAAP net loss attributable to common stockholders of $19.7 million or $0.16 per share, primarily due to increases in CECL reserves and impairments on REO assets.
High Watch List Exposure
Watch list exposure stood at $411 million or 16% of the loan portfolio, with significant focus required on resolving the San Jose Hotel loan which comprises one third of the watch list.
Interest Rate Environment Challenges
Elevated lending rates are causing negative equity leverage for investments, creating a challenging environment for new acquisitions and refinancing demand.
Company Guidance
During the fourth quarter and full year 2024 earnings call for BrightSpire Capital, several key financial metrics and future guidance were provided by the management team. The company reported a fourth quarter GAAP net loss attributable to common stockholders of $19.7 million, or $0.16 per share, and adjusted distributable earnings of $23.7 million, or $0.18 per share. The liquidity stood at $418 million, with $253 million in unrestricted cash. BrightSpire's GAAP net book value was $8.08 per share, and the undepreciated book value was $8.89 per share as of December 31, 2024. The management outlined plans to originate over $1 billion in new loans in 2025, aiming to grow the loan portfolio to over $3 billion. They successfully funded five new loans totaling $119 million, with another $59 million in closing, primarily in the multifamily sector. The company also made significant progress in resolving watchlist loans and reducing office loan exposure by $500 million. BrightSpire expressed optimism about the potential for spread tightening in the lending market and plans to execute another CLO in the latter half of 2025 to enhance returns on equity.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.