Rithm Property Trust (RPT) AI Stock Analysis

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Rithm Property Trust

(NYSE:RPT)

42Neutral

Rithm Property Trust faces significant financial challenges with declining revenues and high leverage, impacting its ability to maintain profitability and liquidity. Technical indicators reflect a bearish trend, further dampening the outlook. However, the recent earnings call provides some optimism with a strategic shift and the first profitable quarter in years. Valuation metrics are mixed, with a high dividend yield but negative earnings. Overall, the stock remains a high-risk investment with some potential for recovery if strategic initiatives succeed.

Positive Factors

Management Expertise

RPT will benefit from having no legacy CRE exposure and sponsorship from a manager with experience and a strong historical track record of scaling mortgage REITs.

Transition Strategy

The company’s transition to a CRE investment strategy will deliver near-term earnings in support of the dividend and capitalize on substantial demand for CRE capital.

Negative Factors

Financial Performance

GAAP BVPS declined 1.6% QoQ in 3Q24 to $5.47 as the company under earns the dividend.

Rithm Property Trust (RPT) vs. S&P 500 (SPY)

Market Cap

$128.70M

Dividend Yield9.96%

Average Volume (3M)282.72K

Price to Earnings (P/E)―

Beta (1Y)1.12

Revenue Growth-32.95%

EPS Growth-45.50%

CountryUS

EmployeesN/A

SectorReal Estate

Sector Strength86

IndustryREIT - Mortgage

Share Statistics

EPS (TTM)-2.85

Shares Outstanding47,489,986

10 Day Avg. Volume251,455

30 Day Avg. Volume282,718

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.65

Price to Cash Flow (P/CF)1.30

P/FCF Ratio1.40

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$5.00

Price Target Upside84.50% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering0

Rithm Property Trust Business Overview & Revenue Model

Company DescriptionRithm Property Trust (RPT) is a real estate investment trust that operates in the real estate sector, focusing on the acquisition, ownership, and management of income-generating properties. The company's core services include leasing, property management, and real estate development, with a diversified portfolio that spans across residential, commercial, and mixed-use properties.

How the Company Makes MoneyRithm Property Trust generates revenue primarily through rental income from its portfolio of properties. This involves leasing space to residential tenants, businesses, and retailers, which provides a steady stream of rental payments. The company may also engage in property development and sales, where it constructs and sells properties to earn profits. Additionally, RPT might benefit from strategic partnerships with other real estate firms and financial institutions, enhancing its revenue through joint ventures and investment opportunities. The trust's ability to effectively manage and optimize its property assets contributes significantly to its financial performance.

Rithm Property Trust Financial Statement Overview

Summary

Rithm Property Trust is experiencing considerable financial distress, marked by declining revenues, consistent net losses, and high leverage. The company faces challenges in maintaining profitability and liquidity, which could impact its ability to sustain operations and growth.

Income Statement

Negative

Rithm Property Trust shows a concerning decline in revenue and profitability. The total revenue turned negative in recent years, indicating the company is facing significant financial challenges. The net income has been consistently negative, highlighting ongoing losses. The lack of EBIT and EBITDA margins further points to operational difficulties.

Balance Sheet

Negative

The balance sheet reveals a moderate financial position with a high debt-to-equity ratio, suggesting potential leverage risks. The equity ratio is relatively low, indicating dependence on liabilities. The return on equity is negative due to persistent net losses, pointing to inefficiency in generating returns for shareholders. However, the company maintains a reasonable level of cash and short-term investments.

Cash Flow

Negative

Cash flow analysis indicates significant volatility. The operating cash flow has fluctuated, turning negative recently, which affects liquidity. Free cash flow is minimal, limiting the company's ability to reinvest. The operating cash flow to net income ratio is unfavorable due to negative net income, further indicating cash flow constraints.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
-76.92M	-16.86M	217.66M	213.49M	191.71M
	Gross Profit
-76.92M	-16.86M	150.95M	145.21M	127.75M
	EBIT
98.67M	0.00	37.49M	44.39M	26.70M
	EBITDA
0.00	0.00	116.94M	116.64M	103.75M
	Net Income Common Stockholders
-91.83M	-47.07M	-15.01M	68.64M	-10.47M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
373.04M	184.39M	262.48M	13.37M	208.89M
	Total Assets
977.34M	1.34B	1.48B	1.90B	1.95B
	Total Debt
366.00M	621.57M	907.38M	902.44M	1.05B
	Net Debt
301.75M	568.74M	901.96M	889.07M	837.56M
	Total Liabilities
730.57M	1.03B	1.15B	1.01B	1.15B
	Stockholders Equity
246.92M	308.93M	960.51M	876.94M	782.39M
Cash Flow		Free Cash Flow
290.00K	-46.46M	68.27M	64.72M	39.94M
	Operating Cash Flow
290.00K	-46.46M	1.14M	92.86M	63.06M
	Investing Cash Flow
297.27M	172.82M	-63.73M	-167.13M	-18.93M
	Financing Cash Flow
-286.15M	-121.37M	-42.10M	-123.18M	52.80M

Rithm Property Trust Technical Analysis

Technical Analysis Sentiment

Negative

Last Price2.71

Price Trends

50DMA

3.01

Negative

100DMA

2.94

Negative

200DMA

3.08

Negative

Market Momentum

MACD

-0.05

Positive

RSI

36.63

Neutral

STOCH

12.82

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RPT, the sentiment is Negative. The current price of 2.71 is below the 20-day moving average (MA) of 2.85, below the 50-day MA of 3.01, and below the 200-day MA of 3.08, indicating a bearish trend. The MACD of -0.05 indicates Positive momentum. The RSI at 36.63 is Neutral, neither overbought nor oversold. The STOCH value of 12.82 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RPT.

Rithm Property Trust Risk Analysis

Rithm Property Trust disclosed 54 risk factors in its most recent earnings report. Rithm Property Trust 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

Rithm Property Trust Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FRT	76 Outperform	$7.48B	25.30	9.58%	5.24%	6.21%	22.32%
KIM	68 Neutral	$13.70B	36.50	4.03%	5.24%	14.51%	-45.53%
Sector *	61 Neutral	$4.31B	16.14	-3.60%	11.88%	6.17%	-20.99%
BXP	60 Neutral	$10.71B	681.31	0.23%	6.89%	4.10%	-92.47%
SLG	52 Neutral	$3.93B	662.34	0.71%	6.33%	5.12%	―
VNO	52 Neutral	$13.36B	831.59	1.32%	2.33%	-1.30%	-80.81%
RPT	42 Neutral	$128.70M	―	-32.96%	9.96%	-32.95%	-45.50%

* Real Estate Sector Average

Performance Comparison

RPT

Rithm Property Trust

2.71

-0.85

-23.88%

BXP

Boston Properties

61.59

2.95

5.03%

KIM

Kimco Realty

20.16

3.00

17.48%

SLG

SL Green Realty

52.06

1.71

3.40%

VNO

Vornado Realty

35.01

6.89

24.50%

FRT

Federal Realty

90.38

-5.30

-5.54%

Rithm Property Trust Earnings Call Summary

Earnings Call Date: Jan 30, 2025 | % Change Since: -3.56% | Next Earnings Date: May 1, 2025

Earnings Call Sentiment Neutral

The earnings call showcased a positive turnaround for Rithm Property Trust with its first profitable quarter in three years and a strategic shift towards commercial real estate. However, the need for additional capital and challenges with legacy assets present ongoing financial hurdles. Overall, the sentiment is cautiously optimistic with a focus on growth and value creation.

Highlights

Positive Economic Result

For the first time in three years, Rithm Property Trust reported a positive economic result in Q4, with earnings of $0.06 per diluted share from a GAAP perspective.

Repositioning and Strategic Shift

The company repositioned its balance sheet to focus on high-quality commercial real estate, selling down legacy residential positions and reinvesting the proceeds.

Stable Dividend and Book Value

Maintained a dividend of $0.06 per common share and kept the book value essentially unchanged at $5.44 despite interest rates rising by approximately 60 basis points.

Pipeline and Growth Strategy

A robust pipeline of $1 billion in potential investments is being targeted, with a focus on commercial real estate and opportunistic situations yielding low double-digit returns.

M&A Opportunities for Growth

Plans to explore mergers and acquisitions to grow the company, leveraging a broad pipeline at Rithm Capital.

Lowlights

Need for Additional Capital

The company plans to seek more capital, likely through a preferred equity deal in Q1, as the current stock price is deemed undervalued and trades at roughly 50% of book value.

High Coupon Unsecured Notes

Part of the new capital will be used to address the higher coupon unsecured notes currently on the balance sheet.

Legacy Residential Assets

Several legacy residential RMBS cannot be sold due to being part of older securitizations, which will remain on the balance sheet.

Company Guidance

In the fourth quarter of 2024, Rithm Property Trust reported a positive economic result for the first time in three years, with GAAP income of $2.9 million, translating to $0.06 per diluted share. The company maintained its dividend at $0.06 per common share and ended Q4 with cash and liquidity of $64 million and total shareholder equity of $247 million. Despite a 60 basis points increase in interest rates, the book value remained steady at $5.44. The firm repositioned by selling approximately $340 million of legacy residential mortgage assets and reinvested $50 million into high-quality commercial real estate. Rithm aims to raise additional capital in Q1 through a preferred equity deal, targeting low double-digit returns on new commercial real estate investments. The vehicle's current equity is roughly $250 million, trading at about 50% of book value, and the firm sees opportunities for growth through M&A, following a strategy similar to its past successes.

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.