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Franklin Street Properties (FSP)
XASE:FSP
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Franklin Street Properties
(NYSE MKT:FSP)
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Rating:40Neutral
Price Target:
$0.80
▼(-15.11% Downside)
The overall stock score is primarily driven by weak financial performance and bearish technical indicators. The company's financial challenges, including declining revenues and profitability, are significant risks. Technical analysis further indicates negative momentum, with the stock trading below key moving averages and in oversold conditions. Valuation concerns are underscored by a negative P/E ratio, despite a high dividend yield.
Positive Factors
Strong Equity Position
A strong equity position provides financial stability and reduces reliance on debt, supporting long-term operational resilience.
Strategic Review
The strategic review could lead to significant structural changes, potentially enhancing shareholder value and addressing financial challenges.
Property Management Services
Diversified revenue through property management services can provide stable cash flow, reducing reliance on rental income alone.
Negative Factors
Declining Revenue
Continued revenue decline indicates challenges in maintaining market position and could pressure future profitability and cash flow.
Negative Profitability
Sustained negative profitability undermines financial health, limiting reinvestment capacity and potential for growth.
Cash Flow Issues
Declining free cash flow growth indicates challenges in liquidity management, potentially impacting operational and strategic flexibility.
Franklin Street Properties (FSP) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$82.95M
Dividend Yield4.71%
Average Volume (3M)671.36K
Price to Earnings (P/E)―
Beta (1Y)0.90
Revenue Growth-14.68%
EPS Growth-13.53%
CountryUS
Employees28
SectorReal Estate
Sector Strength53
IndustryREIT - Office
Share Statistics
EPS (TTM)-0.08
Shares Outstanding103,690,340
10 Day Avg. Volume456,985
30 Day Avg. Volume671,362
Financial Highlights & Ratios
PEG Ratio-0.42
Price to Book (P/B)0.29
Price to Sales (P/S)1.58
P/FCF Ratio-11.67
Enterprise Value/Market Cap3.57
Enterprise Value/Revenue2.71
Enterprise Value/Gross Profit5.21
Enterprise Value/Ebitda17.65
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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 generates revenue primarily through rental income from its portfolio of commercial properties. The company leases space to various tenants, including businesses and government entities, which provides a consistent cash flow. Additionally, FSP benefits from property appreciation and can realize capital gains when selling properties. The company may also engage in property management services for third parties, further diversifying its revenue streams. Partnerships with real estate brokers, financial institutions, and property developers play a crucial role in expanding FSP's portfolio and accessing new investment opportunities, thereby contributing to its overall earnings.
Franklin Street Properties Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q1-2025)
| % Change Since: |
Next Earnings Date:Feb 17, 2026
Earnings Call Sentiment Neutral
While Franklin Street Properties Corp. has made significant strides in reducing corporate debt and shows promise with a growing leasing pipeline and strong demand in Texas markets, the company faces challenges with a reported net loss and decreased leasing activity. The leasing decisions have been impacted by market volatility and macroeconomic factors, making the overall sentiment mixed.Q1-2025 Updates
Positive Updates
Debt Reduction Success
Since initiating the disposition strategy in late 2020, Franklin Street Properties Corp. has completed approximately $1.1 billion in property sales, contributing to a nearly 75% reduction in corporate indebtedness.
Increased National Office Transaction Volumes
National office transaction volumes rose by 22% in 2024 from the lows of 2023 and accelerated in Q1 2025, finishing 31% higher year-over-year.
Growing Leasing Pipeline
FSP is tracking approximately 800,000 square feet of prospective new tenants, including 300,000 square feet of prospects that have identified FSP assets on their shortlists.
Strong Demand in Texas Markets
Consistent strong demand was observed in Texas, particularly in the Houston energy corridor, with Dallas also showing a pickup in tenant market activity.
Negative Updates
Net Loss Reported
A GAAP net loss of approximately $21.4 million or $0.21 per share was reported for the first quarter of 2025.
Decreased Leasing Activity
FSP's directly owned portfolio saw a decrease in lease occupancy, with a drop to 69.2% from 70.3% in the previous quarter, attributed to lease expirations and departures in Dallas and Denver.
Challenges in Corporate Leasing Decisions
Corporate leasing decisions regarding relocations stalled due to market volatility and macroeconomic circumstances, impacting the execution of new leases.
Company Guidance
During the Franklin Street Properties Corp. first quarter 2025 earnings call, several key metrics and strategic directions were discussed. The company reported funds from operations (FFO) of approximately $2.7 million or $0.03 per share, alongside a GAAP net loss of around $21.4 million or $0.21 per share. Leasing activity showed a decline, with the directly owned portfolio being 69.2% leased, down from 70.3% at the end of the previous quarter, and economic occupancy at 67.7%, a decrease from 68.6%. Despite a challenging quarter, 60,000 square feet of leasing was finalized, consisting solely of renewals and expansions. The company is also tracking a pipeline of approximately 800,000 square feet of prospective new tenants and 400,000 square feet of potential renewals. Additionally, Franklin Street Properties is marketing about 1 million square feet for potential disposition, having completed $1.1 billion in property sales since 2020, which significantly reduced corporate indebtedness by nearly 75%. The company remains cautious of macroeconomic uncertainties affecting leasing and investment decisions but is optimistic about potential improvements in the coming quarters.Franklin Street Properties Financial Statement Overview
Summary
Franklin Street Properties faces financial challenges with declining revenues and profitability, as evidenced by negative net income and cash flow issues. While the balance sheet shows a strong equity position, the company struggles with cash generation and profitability, posing risks to financial stability.Income Statement
The income statement shows declining revenue with a negative growth rate of -2.13% in the TTM period. The company has a negative net profit margin of -42.16%, indicating significant losses. Gross profit margin is relatively stable at 51.98%, but EBIT and EBITDA margins are weak, with EBIT margin at -14.28% and EBITDA margin at 25.41%.45
Neutral
Balance Sheet
The balance sheet reflects a moderate debt-to-equity ratio of 0.40, indicating manageable leverage. However, the return on equity is negative at -7.30%, reflecting poor profitability. The equity ratio stands at 68.28%, suggesting a strong equity position relative to assets.55
Neutral
Cash Flow
Cash flow analysis reveals a significant decline in free cash flow growth at -63.69% in the TTM period. The operating cash flow to net income ratio is low, indicating challenges in converting income to cash. Free cash flow to net income ratio is negative, reflecting cash flow issues.35
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 109.50M | 120.11M | 145.71M | 165.62M | 209.36M | 245.85M |
| Gross Profit | 56.91M | 52.35M | 67.78M | 78.17M | 107.42M | 130.52M |
| EBITDA | 16.79M | 21.64M | 33.68M | 89.69M | 206.21M | 160.16M |
| Net Income | -46.16M | -52.72M | -48.11M | 1.09M | 92.72M | 32.62M |
Balance Sheet | ||||||
| Total Assets | 901.03M | 946.93M | 1.17B | 1.24B | 1.36B | 1.79B |
| Cash, Cash Equivalents and Short-Term Investments | 31.43M | 41.12M | 125.53M | 3.74M | 34.31M | 2.65M |
| Total Debt | 247.98M | 247.63M | 404.71M | 413.01M | 480.03M | 938.85M |
| Total Liabilities | 285.69M | 291.07M | 456.52M | 472.93M | 580.97M | 1.03B |
| Stockholders Equity | 615.34M | 655.86M | 712.80M | 768.74M | 783.20M | 768.09M |
Cash Flow | ||||||
| Free Cash Flow | -3.97M | -16.23M | -13.77M | -39.68M | -28.47M | -9.47M |
| Operating Cash Flow | 2.17M | 8.99M | 17.87M | 15.23M | 36.36M | 68.45M |
| Investing Cash Flow | 19.94M | 70.28M | 113.64M | 74.04M | 505.47M | 11.04M |
| Financing Cash Flow | -32.91M | -164.47M | -10.25M | -123.39M | -505.24M | -85.13M |
Franklin Street Properties Technical Analysis
Negative
0.94
Price Trends
0.92
Negative
1.15
Negative
1.39
Negative
Market Momentum
-0.03
Positive
34.07
Neutral
9.20
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FSP, the sentiment is Negative. The current price of 0.94 is above the 20-day moving average (MA) of 0.88, above the 50-day MA of 0.92, and below the 200-day MA of 1.39, indicating a bearish trend. The MACD of -0.03 indicates Positive momentum. The RSI at 34.07 is Neutral, neither overbought nor oversold. The STOCH value of 9.20 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FSP.
Franklin Street Properties Risk Analysis
Franklin Street Properties disclosed 34 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
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
57 Neutral | $139.66M | ― | -18.67% | 7.34% | -11.41% | -56.73% | |
55 Neutral | $1.07B | -15.40 | -4.45% | 6.09% | -1.23% | 9.10% | |
51 Neutral | $548.78M | -3.12 | -19.60% | 17.55% | -5.52% | 40.27% | |
40 Neutral | $82.95M | -1.73 | -7.21% | 4.71% | -14.68% | -13.53% |
* Real Estate Sector Average
FSP
Franklin Street Properties
0.80
-0.96
-54.65%
PDM
Piedmont Office
8.63
0.27
3.23%
BDN
Brandywine Realty
3.15
-1.23
-28.16%
ONL
Orion Office REIT
2.48
-1.48
-37.37%
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.