Seven Hills Realty Trust (SEVN) AI Stock Analysis

• Market Cap: $171.98M
• Dividend Yield: 12.13%
• Average Volume (3M): 50.70K
• Price to Earnings (P/E): 9.6
• Beta (1Y): 0.69
• Revenue Growth: -6.56%
• EPS Growth: -31.89%
• Country: US
• Employees: N/A
• Sector: Real Estate
• Sector Strength: 86
• Industry: REIT - Mortgage
• EPS (TTM): 1.20
• Shares Outstanding: 14,902,773
• 10 Day Avg. Volume: 63,329
• 30 Day Avg. Volume: 50,698
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 6.21
• Price to Cash Flow (P/CF): 12.10
• P/FCF Ratio: 12.10
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $14.75
• Price Target Upside: 27.82% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

Seven Hills Realty Trust shows a solid overall performance with strong financial stability and positive earnings sentiment. While profitability margins face pressure, the company's undervaluation and high dividend yield provide a strong investment case. Recent executive changes may further strengthen strategic direction.

Positive Factors

Analyst Rating

The analyst reiterates the Market Outperform rating on shares of Seven Hills Realty Trust.

Loan Portfolio Growth

Seven Hills Realty Trust is well-positioned to grow its loan portfolio due to solid credit performance and a healthy liquidity position.

Negative Factors

Dividend Coverage

Distributable EPS of $0.33 did not fully cover the $0.35 quarterly dividend, with a coverage ratio of 94%.

Interest Rates

Interest rates have moved higher, which could slow lending activity in the near term.

Seven Hills Realty Trust Business Overview & Revenue Model

Company Description

Seven Hills Realty Trust, a real estate investment trust, focuses on originating and investing in first mortgage loans secured by middle market and transitional commercial real estate in the United States. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders. The company was formerly known as RMR Mortgage Trust. Seven Hills Realty Trust was incorporated in 2008 and is headquartered in Newton, Massachusetts.

How the Company Makes Money

Seven Hills Realty Trust generates revenue primarily through interest income from its portfolio of mortgage loans. The company extends first mortgage loans to commercial real estate properties, earning interest over the life of these loans. SEVN focuses on middle market and transitional properties, often involving repositioning or redevelopment, allowing the company to charge higher interest rates due to the increased risk and complexity. Key revenue streams include interest payments on outstanding loans and fees associated with loan origination. The company may also benefit from strategic partnerships with real estate operators and developers, enhancing its ability to source and manage high-quality loan opportunities. These factors, combined with a focus on underserved markets, contribute to SEVN's earnings.

Seven Hills Realty Trust Financial Statement Overview

Summary

Seven Hills Realty Trust presents a mixed financial picture. The income statement shows stable revenue growth but declining net margins, indicating pressure on profitability. The balance sheet reflects a strong reduction in leverage and a solid equity base, enhancing financial stability. Cash flows remain consistent, with a slight decline in free cash flow growth. Overall, the company is positioned well but faces challenges in improving profitability margins and asset growth.

Income Statement

Seven Hills Realty Trust has shown a steady increase in revenue over recent years, with a revenue growth rate of approximately 1% from 2023 to 2024. The gross profit margin is robust at 100%, indicating efficient management of cost of goods sold. However, the net profit margin has decreased significantly, from 74% in 2023 to 50% in 2024, due to a reduction in net income. EBIT margin remains strong at 89%, suggesting stable operating efficiency. The absence of EBITDA figures limits the analysis of operating cash flows.

Balance Sheet

The company's balance sheet reflects a healthy equity position with a debt-to-equity ratio of 0 in 2024, down from a high of 1.68 in 2022, indicating a strong reduction in debt levels. The equity ratio improved to 38.9% in 2024, highlighting a solid capital structure. Return on equity has decreased from 9.49% in 2023 to 6.62% in 2024, reflecting lower profitability. The substantial cash reserves enhance liquidity, while the declining total assets suggest a need for asset reallocation or growth.

Cash Flow

Operating cash flow decreased slightly by 0.8% from 2023 to 2024, indicating stable cash generation. The free cash flow remains positive but fell 0.8% over the same period. The operating cash flow to net income ratio improved to 1.13 in 2024, up from 0.79 in 2023, suggesting more cash is being generated per dollar of net income. However, the free cash flow to net income ratio has remained stable at 1.13, showing consistency in cash flow relative to earnings.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
35.27M	34.91M	34.10M	30.23M	-54.31M
	Gross Profit
35.27M	33.61M	27.61M	25.45M	-57.21M
	EBIT
31.37M	24.39M	56.10M	25.58M	-65.30M
	EBITDA
0.00	0.00	52.33M	0.00	-54.47M
	Net Income Common Stockholders
17.64M	25.75M	27.45M	24.65M	-46.07M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
70.75M	87.86M	740.99M	26.20M	103.31M
	Total Assets
692.81M	731.52M	746.85M	599.99M	196.06M
	Total Debt
0.00	454.42M	471.52M	339.63M	92.01M
	Net Debt
-70.75M	366.57M	400.46M	313.43M	-11.31M
	Total Liabilities
423.53M	460.28M	475.27M	342.30M	3.16M
	Stockholders Equity
269.28M	271.25M	271.58M	257.69M	192.89M
Cash Flow		Free Cash Flow
20.11M	20.27M	12.75M	-4.12M	210.32M
	Operating Cash Flow
20.11M	20.27M	12.75M	792.00K	210.32M
	Investing Cash Flow
21.26M	35.84M	-84.07M	-283.86M	292.72M
	Financing Cash Flow
-58.48M	-39.33M	116.09M	205.80M	-111.43M

Seven Hills Realty Trust Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 11.54
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SEVN, the sentiment is Negative. The current price of 11.54 is below the 20-day moving average (MA) of 12.37, below the 50-day MA of 12.68, and below the 200-day MA of 12.74, indicating a bearish trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 55.41 is Neutral, neither overbought nor oversold. The STOCH value of 49.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SEVN.

Seven Hills Realty Trust Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SEVN	75 Outperform	$171.98M	9.63	6.53%	12.13%	-6.56%	-31.89%
ABR	70 Outperform	$2.10B	9.39	8.62%	15.52%	-11.26%	-33.80%
STWD	70 Outperform	$6.29B	16.91	5.55%	10.32%	-0.97%	3.75%
LADR	68 Neutral	$1.33B	12.20	7.06%	8.76%	-5.09%	6.25%
Sector *	61 Neutral	$4.30B	16.20	-3.61%	11.22%	6.29%	-21.37%
BXMT	60 Neutral	$3.14B	―	-5.01%	11.09%	-12.86%	-182.05%
RC	43 Neutral	$831.65M	―	-19.41%	19.11%	-24.40%	-210.65%

Seven Hills Realty Trust Corporate Events

Seven Hills Realty Trust Appoints New CFO

On March 10, 2025, Seven Hills Realty Trust appointed Matthew Brown as the new Chief Financial Officer and Treasurer, succeeding Fernando Diaz who resigned on March 9, 2025. Mr. Brown brings extensive experience from his previous roles at Diversified Healthcare Trust and The RMR Group LLC, where he held various finance and accounting leadership positions. This leadership change is expected to enhance the company’s financial oversight and strategic direction.