Seven Hills Realty Trust (SEVN) AI Stock Analysis

• Market Cap: $195.69M
• Dividend Yield: 13.82%
• Average Volume (3M): 48.62K
• Price to Earnings (P/E): 8.6
• Beta (1Y): 0.63
• Revenue Growth: -18.06%
• EPS Growth: -18.94%
• Country: US
• Employees: N/A
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Mortgage
• EPS (TTM): 0.28
• Shares Outstanding: 22,596,891
• 10 Day Avg. Volume: 53,606
• 30 Day Avg. Volume: 48,617
• PEG Ratio: -0.53
• Price to Book (P/B): 0.41
• Price to Sales (P/S): 2.30
• P/FCF Ratio: 9.02
• Enterprise Value/Market Cap: 2.54
• Enterprise Value/Revenue: 11.54
• Enterprise Value/Gross Profit: 11.92
• Enterprise Value/Ebitda: 13.95
• 1Y Price Target: $10.75
• Price Target Upside: 25.58% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 1.05
• Revenue Forecast (FY): $33.77M

• Rating: 65 Neutral
• Price Target: $9.50 ▲(10.98% Upside)
• Action: Reiterated Date: 02/19/26
• Date: Action: Reiterated 02/19/26

The score is driven primarily by fair-to-good financial performance (strong bottom-line and improved cash conversion, but soft/volatile revenue and leverage/consistency concerns). Valuation is supportive (low P/E and high yield), while technicals are weaker with the stock below longer-term averages. Earnings call tone was constructive on liquidity and credit quality, tempered by near-term dilution and softer Q1 earnings guidance.

Positive Factors

Portfolio Credit Quality

Consistently current loans and no nonaccruals indicate disciplined underwriting and active asset management, lowering probability of credit losses and provision volatility. For a mortgage REIT, sustained low delinquency supports predictable interest income and preserves distributable earnings over multiple quarters.

Expanded Capital & Alignment

The rights offering materially expanded capital and investment capacity, improving ability to originate and replace maturing loans. Manager ownership rising aligns incentives with shareholders and the enlarged secured facility capacity plus cash on hand strengthens funding flexibility, reducing structural liquidity risk.

Stable Cash Generation

Tight free cash flow to net income conversion demonstrates real cash conversion of reported profits, supporting sustainable distributions and reinvestment. For a lending-focused REIT, steady operating cash flow reduces dependence on external financing and cushions against cyclical revenue variability.

Negative Factors

Elevated Leverage & Reporting Shift

Historically high leverage amplifies sensitivity to credit stress and interest rate moves for a mortgage REIT. The abrupt 2025 reporting shift to zero reported debt creates uncertainty about true funding structure and consistency, complicating assessment of long-term capitalization and downside resilience.

Concentrated Loan Maturities (H2 2026)

A large cluster of maturities within a short window creates refinancing and reinvestment risk: the company may face compressed spreads or funding pressure if market conditions tighten. Concentration increases execution risk and could force sales or less favorable terms when replacing maturing assets.

Spread Compression Risk

Structural competition and securitization trends compress lending spreads, eroding net interest margin which is core to earnings. Over time, persistent spread pressure can reduce return on equity and distributable income, especially if financing costs or loan floors do not move in tandem.

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

Strong recent profitability with consistently high net margins and positive net income since 2021, supported by improved cash conversion (FCF closely tracking net income in 2022–2025). Offsets include declining/volatile revenue in recent years and leverage/consistency concerns on the balance sheet (historically elevated debt-to-equity with an unusual 2025 shift in reported debt).

Income Statement

Profitability is strong in recent years, with net profit margins consistently high (roughly ~49% to ~74% from 2021–2025) and net income positive each year since 2021. However, the revenue line is volatile and has trended down in the most recent periods (2025 down ~15% year over year; 2023 down ~38%), and operating profit metrics show inconsistency/quality issues in the dataset (e.g., 2025 EBIT/EBITDA reported at zero; 2023 shows a negative EBIT margin despite positive EBIT). Overall: strong bottom-line results, but weakening top-line trajectory and uneven operating-level signals.

Balance Sheet

The balance sheet shows meaningful leverage in most years, with debt-to-equity generally elevated (~1.3x–1.7x from 2021–2024), which increases sensitivity to credit conditions and asset performance—typical but still a risk for a mortgage REIT. A positive is that equity and assets have grown over time, and returns on equity were solid in 2021–2024 (~6.5%–10%). In 2025, reported total debt drops to zero and leverage metrics collapse to 0x, which looks like a major change versus prior years and may indicate a one-off reporting shift; even with that, return on equity also dipped (~4.7%). Net: acceptable capitalization with leverage risk and some year-to-year consistency concerns.

Cash Flow

Cash generation is generally supportive of reported earnings: free cash flow tracks net income closely in most years (including 2022–2025 where free cash flow to net income is ~1.0). Operating cash flow is positive from 2021 onward and relatively stable around the mid-teens to ~$20M in 2022–2025, though growth cooled and turned slightly negative in the last two years. Weaknesses include a 2021 period where free cash flow was negative despite positive earnings, and a very weak 2020 with deeply negative operating and free cash flow. Overall: improved and now steady cash conversion, with some historical volatility and recent growth softness.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	58.87M	29.97M	34.91M	55.99M	35.71M
Gross Profit	47.36M	27.36M	33.61M	49.50M	30.92M
EBITDA	46.04M	50.91M	0.00	52.33M	27.83M
Net Income	15.43M	17.64M	25.75M	27.45M	24.65M
Balance Sheet
Total Assets	820.86M	692.81M	731.52M	746.85M	599.99M
Cash, Cash Equivalents and Short-Term Investments	123.47M	70.75M	87.86M	71.07M	26.20M
Total Debt	487.66M	417.80M	454.42M	471.52M	339.63M
Total Liabilities	492.20M	423.53M	460.28M	475.27M	342.30M
Stockholders Equity	328.65M	269.28M	271.25M	271.58M	257.69M
Cash Flow
Free Cash Flow	15.04M	20.11M	20.27M	12.75M	-4.12M
Operating Cash Flow	15.04M	20.11M	20.27M	12.75M	792.00K
Investing Cash Flow	-72.96M	21.26M	35.84M	-84.07M	-283.86M
Financing Cash Flow	110.64M	-58.48M	-39.33M	116.09M	205.80M

Seven Hills Realty Trust Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 8.56
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• 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 8.56 is below the 20-day moving average (MA) of 8.72, below the 50-day MA of 8.72, and below the 200-day MA of 9.57, indicating a bearish trend. The MACD of -0.01 indicates Positive momentum. The RSI at 48.15 is Neutral, neither overbought nor oversold. The STOCH value of 42.07 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
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
SEVN	65 Neutral	$195.69M	8.56	5.72%	13.82%	-18.06%	-18.94%
MITT	57 Neutral	$258.01M	9.01	8.82%	9.61%	20.44%	-59.21%
CHMI	57 Neutral	$100.67M	-22.22	―	21.65%	22.14%	―
LFT	53 Neutral	$72.79M	14.27	4.14%	23.03%	-31.69%	-72.10%
ACR	47 Neutral	$135.15M	19.33	6.58%	―	-18.37%	18.80%
GPMT	45 Neutral	$84.86M	-1.53	-7.12%	7.97%	-28.13%	62.49%

Seven Hills Realty Trust Corporate Events

Seven Hills Realty Trust Completes Rights Offering

On December 10, 2025, Seven Hills Realty Trust announced the completion of its transferable rights offering, which began on November 10, 2025, and concluded on December 4, 2025. The offering resulted in subscriptions for approximately 73.2% of the shares offered, with Tremont Realty Capital purchasing the remaining shares, bringing the total gross proceeds to approximately $65.2 million. The proceeds are intended to support the growth of SEVN’s loan portfolio and capitalize on opportunities in the lending market.

The most recent analyst rating on (SEVN) stock is a Buy with a $12.50 price target. To see the full list of analyst forecasts on Seven Hills Realty Trust stock, see the SEVN Stock Forecast page.