Franklin Street Properties (FSP) AI Stock Analysis

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Franklin Street Properties

(NYSE MKT:FSP)

Rating:56Neutral

Price Target:

$2.00

▲(11.11%Upside)

Franklin Street Properties faces substantial challenges with profitability and leasing activity, impacting its financial performance score negatively. The technical indicators show some upward momentum but caution is warranted due to potential overbought conditions. The valuation is affected by negative earnings, although the dividend yield offers some support. The reduction in debt and prospective tenant pipeline are positives from the earnings call, yet the overall outlook remains cautious due to ongoing operational issues.

Franklin Street Properties (FSP) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$186.42M

Dividend Yield2.22%

Average Volume (3M)443.69K

Price to Earnings (P/E)―

Beta (1Y)1.03

Revenue Growth-18.97%

EPS Growth-14.57%

CountryUS

Employees28

SectorReal Estate

Sector Strength64

IndustryREIT - Office

Share Statistics

EPS (TTM)-0.21

Shares Outstanding103,566,710

10 Day Avg. Volume352,083

30 Day Avg. Volume443,686

Financial Highlights & Ratios

PEG Ratio-2.61

Price to Book (P/B)0.37

Price to Sales (P/S)0.00

P/FCF Ratio-7.11

Enterprise Value/Market Cap2.12

Enterprise Value/Revenue0.79

Enterprise Value/Gross Profit10.35

Enterprise Value/Ebitda3.74

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusHold

Number of Analyst Covering1

Franklin Street Properties Business Overview & Revenue Model

Company DescriptionFranklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on infill and central business district (CBD) office properties in the U.S. Sunbelt and Mountain West, as well as select opportunistic markets. FSP seeks value-oriented investments with an eye towards long-term growth and appreciation, as well as current income. FSP is a Maryland corporation that operates in a manner intended to qualify as a real estate investment trust (REIT) for federal income tax purposes.

How the Company Makes MoneyFranklin Street Properties Corp. generates revenue primarily through leasing office space to tenants, which provides a steady stream of rental income. As a REIT, FSP is required to distribute at least 90% of its taxable income to shareholders in the form of dividends, allowing it to maintain its tax-advantaged status. The company's revenue streams are bolstered by its strategic investments in urban markets with strong economic fundamentals and demand for office space. FSP may also increase revenue through property acquisitions, redevelopment projects, and strategic partnerships that enhance the value and appeal of its existing portfolio.

Franklin Street Properties Earnings Call Summary

Earnings Call Date:Apr 29, 2025

(Q1-2025)

% Change Since: 16.13%|

Next Earnings Date:Aug 05, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted significant reduction in corporate debt and a growing pipeline of prospective tenants. However, challenges persist with a decline in leasing activity, lower occupancy rates, and a reported net loss.

Q1-2025 Updates

Positive Updates

Significant Reduction in Corporate Indebtedness

Since late 2020, Franklin Street Properties has completed approximately $1.1 billion in property sales, contributing to a nearly 75% reduction in corporate indebtedness, enhancing financial flexibility.

Growth in National Office Transaction Volumes

National office transaction volumes rose by 22% in 2024 from the cyclical lows of 2023 and accelerated in the first quarter of 2025, finishing 31% higher year-over-year, indicating signs of stabilization.

Prospective Tenant Pipeline

FSP is tracking approximately 800,000 square feet of prospective new tenants, including 300,000 square feet of prospects on their shortlists, indicating potential for future leasing growth.

Negative Updates

Leasing Challenges and Lower Occupancy

The directly owned portfolio was approximately 69.2% leased at the end of the first quarter, down from 70.3% at the end of the fourth quarter. Economic occupancy also decreased due to lease expirations and departures.

Disappointing First Quarter Leasing Activity

FSP finalized only 60,000 square feet of leasing in the first quarter, comprised entirely of renewals and expansions, with no new leases executed.

GAAP Net Loss

Reported a GAAP net loss of approximately $21.4 million or $0.21 per share for the first quarter of 2025.

Company Guidance

In the first quarter of 2025, Franklin Street Properties Corp. reported funds from operations (FFO) of approximately $2.7 million, equating to $0.03 per share, and a GAAP net loss of about $21.4 million, or $0.21 per share. The company's directly owned portfolio was 69.2% leased, down from 70.3% at the end of the previous quarter, with economic occupancy at 67.7%. The quarter saw 60,000 square feet of leasing activity, all from renewals and expansions, with a forecast of continued instability in leasing activities throughout the year. The company is tracking approximately 800,000 square feet of prospective new tenants and 400,000 square feet in potential renewals. Scheduled lease expirations for 2025 total approximately 246,000 square feet, representing 5.1% of the directly owned portfolio. Franklin Street continues its disposition strategy, having sold $1.1 billion in properties since late 2020, reducing corporate debt by nearly 75%. The office market shows signs of stabilization, with national transaction volumes rising by 31% year-over-year in Q1 2025, although investment liquidity remains constrained.

Franklin Street Properties Financial Statement Overview

Summary

Franklin Street Properties is experiencing significant challenges with profitability and revenue growth, as seen in the income statement. The balance sheet shows a focus on reducing debt, while cash flow stability offers some hope. Overall, the company faces hurdles in achieving financial stability and growth.

Income Statement

Neutral

The income statement shows a declining trend in revenue with a significant decrease from previous years. Gross profit margins have deteriorated, and net profit margins are negative, indicating struggles with profitability. The EBIT and EBITDA margins are also negative for the most recent period, reflecting operational inefficiencies and challenges in maintaining profitability.

Balance Sheet

Neutral

The balance sheet reveals a relatively stable stockholders' equity, although total debt levels have decreased, suggesting a focus on deleveraging. However, the equity ratio indicates a moderate reliance on equity financing, and the return on equity is negative due to net losses, highlighting profitability issues.

Cash Flow

Positive

Cash flow analysis shows a positive trend in operating cash flow, although free cash flow remains volatile and has improved slightly in the latest period. The company has managed to maintain operating cash flow even in times of net income losses, indicating some level of operational resilience.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
115.99M	120.11M	145.71M	165.62M	209.36M	245.85M
	Gross Profit
38.24M	52.35M	67.78M	78.17M	107.42M	130.52M
	EBIT
-7.46M	-6.30M	-984.00K	482.00K	12.97M	26.96M
	EBITDA
30.19M	21.64M	57.93M	66.06M	93.98M	118.23M
	Net Income Common Stockholders
-66.61M	-52.72M	-48.11M	1.09M	92.72M	32.62M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
17.28M	41.12M	125.53M	6.63M	40.75M	2.65M
	Total Assets
1.85B	946.93M	1.17B	1.24B	1.36B	1.79B
	Total Debt
996.98M	247.63M	404.71M	413.01M	474.79M	921.54M
	Net Debt
979.70M	206.51M	279.18M	406.38M	434.04M	918.89M
	Total Liabilities
1.09B	291.07M	456.52M	472.93M	580.97M	1.03B
	Stockholders Equity
757.32M	655.86M	712.80M	768.74M	783.20M	768.09M
Cash Flow		Free Cash Flow
-10.31M	-16.23M	-13.77M	-39.68M	-28.47M	-9.47M
	Operating Cash Flow
10.59M	8.99M	17.87M	15.23M	36.36M	68.45M
	Investing Cash Flow
40.26M	70.28M	113.64M	74.04M	505.47M	11.04M
	Financing Cash Flow
-57.07M	-164.47M	-10.25M	-123.39M	-505.24M	-85.13M

Franklin Street Properties Technical Analysis

Technical Analysis Sentiment

Positive

Last Price1.80

Price Trends

50DMA

1.65

Positive

100DMA

1.75

Positive

200DMA

1.76

Positive

Market Momentum

MACD

0.04

Positive

RSI

56.03

Neutral

STOCH

48.34

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FSP, the sentiment is Positive. The current price of 1.8 is above the 20-day moving average (MA) of 1.78, above the 50-day MA of 1.65, and above the 200-day MA of 1.76, indicating a bullish trend. The MACD of 0.04 indicates Positive momentum. The RSI at 56.03 is Neutral, neither overbought nor oversold. The STOCH value of 48.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FSP.

Franklin Street Properties Risk Analysis

Franklin Street Properties disclosed 32 risk factors in its most recent earnings report. Franklin Street Properties 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

Franklin Street Properties Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$2.85B	10.96	0.41%	8438.88%	5.73%	-21.25%
CIO	57 Neutral	$208.65M	―	-2.51%	7.74%	-4.92%	-128.59%
FSP	56 Neutral	$186.42M	―	-9.96%	2.22%	-18.97%	-14.57%
BDN	55 Neutral	$773.66M	―	-18.11%	13.45%	-2.22%	1.51%
PDM	52 Neutral	$947.99M	―	-3.79%	6.56%	-6.23%	18.07%
ONL	49 Neutral	$118.01M	―	-10.71%	15.24%	-18.92%	-15.81%
OPI	44 Neutral	$14.18M	―	-15.03%	20.00%	-11.91%	-80.43%

* Real Estate Sector Average

Performance Comparison

FSP

Franklin Street Properties

1.80

0.19

11.80%

PDM

Piedmont Office

7.60

1.05

16.03%

BDN

Brandywine Realty

4.56

0.65

16.62%

OPI

Office Properties Income

0.20

-1.96

-90.74%

CIO

City Office REIT

5.29

0.93

21.33%

ONL

Orion Office REIT

2.19

-0.93

-29.81%

Franklin Street Properties Corporate Events

Shareholder Meetings

Franklin Street Properties Holds 2025 Annual Meeting

Positive

May 15, 2025

On May 15, 2025, Franklin Street Properties Corp. held its 2025 Annual Meeting of Stockholders to elect six directors, ratify the appointment of Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025, and approve the company’s executive compensation by a non-binding vote. All proposals were approved, with the directors elected for a one-year term expiring at the 2026 Annual Meeting, and the ratification and executive compensation receiving significant support, indicating continued confidence in the company’s leadership and financial oversight.

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.