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Seven Hills Realty Trust (SEVN)
:SEVN
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Seven Hills Realty Trust
(NASDAQ:SEVN)
66Neutral
Positive Factors
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.
New Loan Originations
Seven Hills Realty Trust originated two new loans with a total value of $87M, contributing to a meaningful increase in the loan portfolio.
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 Impact
Interest rates have moved higher, which could slow lending activity in the near term.
Seven Hills Realty Trust (SEVN) vs. S&P 500 (SPY)
Market Cap
$179.17M
Dividend Yield11.72%
Average Volume (3M)50.03K
Price to Earnings (P/E)10.4
Beta (1Y)0.53
Revenue Growth-11.97%
EPS Growth-27.40%
CountryUS
EmployeesN/A
SectorReal Estate
Sector Strength68
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)0.34
Shares Outstanding14,905,747
10 Day Avg. Volume36,813
30 Day Avg. Volume50,035
Financial Highlights & Ratios
PEG Ratio-2.45
Price to Book (P/B)0.65
Price to Sales (P/S)0.00
P/FCF Ratio9.32
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$14.75Price Target Upside22.71% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Seven Hills Realty Trust Business Overview & Revenue Model
Company DescriptionSeven 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 MoneySeven 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 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.65
Positive
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.70
Positive
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.60
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 40.74M | 35.27M | 34.91M | 34.10M | 30.23M | -54.31M | Gross Profit |
| 37.05M | 35.27M | 33.61M | 27.61M | 25.45M | -57.21M | EBIT |
| 32.67M | 31.37M | 24.39M | 56.10M | 25.58M | -65.30M | EBITDA |
| 11.65M | 0.00 | 0.00 | 52.33M | 0.00 | -54.47M | Net Income Common Stockholders |
| 16.93M | 17.64M | 25.75M | 27.45M | 24.65M | -46.07M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 8.95M | 70.75M | 87.86M | 740.99M | 26.20M | 103.31M | Total Assets |
| 635.02M | 692.81M | 731.52M | 746.85M | 599.99M | 196.06M | Total Debt |
| 367.68M | 0.00 | 454.42M | 471.52M | 339.63M | 92.01M | Net Debt |
| 358.73M | -70.75M | 366.57M | 400.46M | 313.43M | -11.31M | Total Liabilities |
| 369.77M | 423.53M | 460.28M | 475.27M | 342.30M | 3.16M | Stockholders Equity |
| 265.25M | 269.28M | 271.25M | 271.58M | 257.69M | 192.89M |
| Cash Flow | Free Cash Flow | ||||
| 19.07M | 20.11M | 20.27M | 12.75M | -4.12M | 210.32M | Operating Cash Flow |
| 19.07M | 20.11M | 20.27M | 12.75M | 792.00K | 210.32M | Investing Cash Flow |
| -68.19M | 21.26M | 35.84M | -84.07M | -283.86M | 292.72M | Financing Cash Flow |
| -2.54M | -58.48M | -39.33M | 116.09M | 205.80M | -111.43M |
Seven Hills Realty Trust Technical Analysis
Neutral
12.02
Price Trends
11.80
Positive
12.12
Negative
12.32
Negative
Market Momentum
0.08
Negative
53.86
Neutral
55.69
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SEVN, the sentiment is Neutral. The current price of 12.02 is above the 20-day moving average (MA) of 11.67, above the 50-day MA of 11.80, and below the 200-day MA of 12.32, indicating a neutral trend. The MACD of 0.08 indicates Negative momentum. The RSI at 53.86 is Neutral, neither overbought nor oversold. The STOCH value of 55.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SEVN.
Seven Hills Realty Trust Risk Analysis
Seven Hills Realty Trust disclosed 63 risk factors in its most recent earnings report. Seven Hills Realty 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
Seven Hills Realty Trust Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $215.15M | 8.19 | 8.55% | 10.59% | 36.70% | -48.88% | |
67 Neutral | $237.59M | 6.68 | 14.14% | 12.66% | 54.49% | -17.44% | |
66 Neutral | $179.17M | 10.39 | 6.27% | 11.72% | -11.97% | -27.40% | |
60 Neutral | $2.82B | 10.29 | 0.31% | 8508.26% | 5.91% | -17.42% | |
56 Neutral | $131.86M | 12.41 | 6.38% | 12.70% | -10.98% | -35.75% | |
52 Neutral | $211.08M | 20.41 | 3.99% | 16.84% | 440.31% | 21.03% | |
48 Neutral | $269.53M | ― | -2.33% | 18.67% | -52.08% | 10.36% |
* Real Estate Sector Average
Performance Comparison
SEVN
Seven Hills Realty Trust
11.90
0.18
1.54%
ACRE
Ares Commercial
4.90
-1.10
-18.33%
MITT
AG Mortgage
7.25
1.07
17.31%
EARN
Ellington Residential Mortgage
5.62
-0.62
-9.94%
LFT
Lument Finance Trust
2.52
0.35
16.13%
AOMR
Angel Oak Mortgage
10.11
-1.01
-9.08%
Seven Hills Realty Trust Earnings Call Summary
Earnings Call Date:Apr 28, 2025
(Q1-2025)
| % Change Since: 8.00%|
Next Earnings Date:Aug 04, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mixed sentiment. While the company highlights strong portfolio performance, successful loan originations, and financial flexibility, it also acknowledges potential earnings pressure due to market volatility and repayment of higher-spread loans. The management is cautious about dividend sustainability and market-driven challenges.Q1-2025 Updates
Positive Updates
Exceeding Earnings Guidance
Distributable earnings of $0.34 per share exceeded the high end of the guidance range, driven by strong loan portfolio performance and new loan production.
Strong Portfolio Health
All loans remain current with no nonaccrual loans, and the weighted average risk rating improved to 2.9 from 3.1.
Significant Financial Flexibility
The company ended the quarter with $42 million in cash and $298 million in unused financing capacity.
Successful Loan Origination
Closed two new student housing loans totaling $50 million, aligning with the focus on resilient sectors.
Improved Office Exposure
Office exposure declined to 25% from 27% at year-end, reflecting a strategic shift to stronger asset classes.
Negative Updates
Potential Earnings Pressure
Anticipated repayments could pressure earnings over the year, particularly as loans originated at higher spreads are repaid.
Market Uncertainty and Volatility
Increased competition among lenders and potential spread widening due to tariff-related headlines and uncertainty about interest rates.
Dividend Sustainability Concerns
Possibility of dividend adjustments due to declining benchmark interest rates and compressed net interest margins.
Dependence on Market Conditions
Earnings are influenced by market-driven factors such as interest rates, loan origination pace, and competitive dynamics.
Company Guidance
During the Seven Hills Realty Trust First Quarter 2025 Financial Results Conference Call, the company provided guidance highlighting several key metrics. The company reported distributable earnings of $0.34 per share, exceeding the high end of their guidance range. They declared and paid a quarterly dividend of $0.35 per share. The portfolio's total commitments stood at $691 million, consisting of 23 first mortgage loans with a weighted average all-in yield of 8.5% and a weighted average coupon of SOFR plus 3.69%. The portfolio had a weighted average loan-to-value of 67% at close and a weighted average risk rating that improved to 2.9 from 3.1 last quarter. The company ended the quarter with $42 million in cash and $298 million in unused financing capacity. Looking forward, they anticipated second-quarter distributable earnings to range between $0.29 and $0.31 per share, acknowledging potential earnings pressure from a lower rate environment and anticipated loan repayments.Seven Hills Realty Trust Corporate Events
Executive/Board Changes
Seven Hills Realty Trust Appoints New CFO
Positive
Mar 10, 2025
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.
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.