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Seven Hills Realty Trust
(NASDAQ:SEVN)
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Rating:68Neutral
Price Target:
$10.00
▲(22.55% Upside)
Action:Reiterated
Date:06/27/26
SEVN’s score is supported by solid profitability, improving operating momentum and liquidity from the latest earnings call (record commitments, better origination margins, strong secured capacity), and an attractive headline valuation (low P/E and high dividend yield). The rating is held back by balance-sheet leverage, very weak cash-flow coverage metrics, and the near-term dividend coverage shortfall and dilution risk highlighted by management.
Positive Factors
High net margins
Seven Hills’ TTM net margin of ~36% demonstrates durable earnings power from its commercial real estate debt business. Strong operating profitability across recent periods supports cash generation potential and the ability to absorb funding cost variability, underpinning distributable earnings as new originations are deployed.
Negative Factors
Elevated leverage
Meaningful leverage (debt-to-equity ~1.5x–1.7x) constrains balance-sheet flexibility and increases sensitivity to higher funding costs or margin compression. In a mortgage REIT model, higher leverage amplifies earnings volatility and limits the firm's ability to absorb adverse CRE market movements without relying on external capital.
Read all positive and negative factors
Positive Factors
Negative Factors
High net margins
Seven Hills’ TTM net margin of ~36% demonstrates durable earnings power from its commercial real estate debt business. Strong operating profitability across recent periods supports cash generation potential and the ability to absorb funding cost variability, underpinning distributable earnings as new originations are deployed.
Read all positive factors
Seven Hills Realty Trust Key Performance Indicators (KPIs)
Seven Hills Realty Trust (SEVN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$187.32M
Dividend Yield13.82%
Average Volume (3M)139.83K
Price to Earnings (P/E)9.4
Beta (1Y)0.58
Revenue Growth-7.31%
EPS Growth-22.36%
CountryUS
Employees1,000
SectorReal Estate
Sector Strength53
IndustryREIT - Mortgage
Share Statistics
EPS (TTM)0.89
Shares Outstanding22,596,077
10 Day Avg. Volume197,509
30 Day Avg. Volume139,833
Financial Highlights & Ratios
PEG Ratio-0.53
Price to Book (P/B)0.41
Price to Sales (P/S)2.30
P/FCF Ratio9.02
Enterprise Value/Market Cap2.93
Enterprise Value/Revenue9.24
Enterprise Value/Gross Profit11.51
Enterprise Value/Ebitda12.02
Forecast
1Y Price Target
$9.83Price Target Upside20.51% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)1.04
Revenue Forecast (FY)$36.19M
Seven Hills Realty Trust Business Overview & Revenue Model
Company Description
Seven Hills Realty Trust functions as a real estate investment trust (REIT), concentrating on both the creation and acquisition of senior mortgage loans. These loans are specifically backed by middle-market and transitional commercial properties s...
How the Company Makes Money
SEVN makes money primarily through income generated from its commercial real estate debt investments. Its core revenue stream is interest income earned on loans and other debt instruments it originates or acquires that are secured by commercial re...
Seven Hills Realty Trust Earnings Call Summary
Earnings Call Date:Apr 28, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 28, 2026
Earnings Call Sentiment Positive
The call conveyed predominantly positive operational and financial momentum: strong distributable earnings (at the high end of guidance), record loan commitments, improved origination margins (1.95%), conservative underwriting (66% LTV), robust liquidity (~$110M cash + ~$400M facility capacity), and a large replenishing pipeline. Offsetting items include a near-term earnings-per-share dilution from the December rights offering ($0.08 impact), a dividend not covered by this quarter's distributable earnings ($0.24 vs $0.28), and heightened macro and market volatility that has moderated transaction activity and placed pressure on multifamily spreads. Overall, management emphasized disciplined deployment, selective underwriting, and expectations that earnings will recover to cover the dividend as proceeds are invested.Positive Updates
Solid First Quarter Distributable Earnings
Distributable earnings of $5.3 million, or $0.24 per share, came in at the high end of guidance for the quarter.
Negative Updates
Dividend Not Covered by Current Distributable Earnings
Quarterly distributable earnings of $0.24 per share did not cover the declared dividend of $0.28 per share (a shortfall of $0.04 per share); management expects earnings to trend back to dividend level by year-end.
Read all updates
Q1-2026 Updates
Positive
Negative
Solid First Quarter Distributable Earnings
Distributable earnings of $5.3 million, or $0.24 per share, came in at the high end of guidance for the quarter.
Read all positive updates
Company Guidance
Management guided that Q1 distributable earnings were $5.3M ($0.24/share, including $0.08/share dilution from the December rights offering), the Board declared a $0.28/share quarterly dividend (≈14% annualized yield) and Q2 distributable earnings are expected to be $0.23–$0.25/share with distributable earnings forecast to trend back to the dividend level by year‑end; originations year‑to‑date carried a 1.95% net interest margin (195 bps, highest in four years) with three near‑term loans expected closer to 180 bps, new loan investments added $0.03/share to Q1 results, seven loans had floors that contributed $0.01/share, CECL reserve is 1.3% (130 bps) of total commitments, total loan commitments were ≈$776M across 26 loans with a 7.8% weighted average all‑in yield, 66% weighted avg LTV at origination and a 2.8 weighted risk rating, cash on hand ≈$110M plus nearly $400M available secured capacity (including a $250M Wells Fargo facility), the pipeline includes >$105M of term sheets and three loans ≈$78M in diligence, and management expects roughly $200M of originations this quarter, net portfolio growth of $50–$75M this quarter, and year‑end portfolio near $950M.Seven Hills Realty Trust Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
56
Neutral
Cash Flow
61
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 59.36M | 58.87M | 67.04M | 71.75M | 55.99M | 35.71M |
| Gross Profit | 47.66M | 47.36M | 54.02M | 62.00M | 49.50M | 30.92M |
| EBITDA | 45.62M | 46.04M | 50.91M | 60.04M | 45.38M | 27.24M |
| Net Income | 15.29M | 15.43M | 17.82M | 25.96M | 27.64M | 24.65M |
Balance Sheet | ||||||
| Total Assets | 797.40M | 820.86M | 692.81M | 731.52M | 746.85M | 599.99M |
| Cash, Cash Equivalents and Short-Term Investments | 56.61M | 123.47M | 70.75M | 87.86M | 71.07M | 26.30M |
| Total Debt | 465.82M | 487.66M | 417.80M | 454.42M | 471.52M | 339.63M |
| Total Liabilities | 470.42M | 492.20M | 423.53M | 460.28M | 475.27M | 342.30M |
| Stockholders Equity | 326.98M | 328.65M | 269.28M | 271.25M | 271.58M | 257.69M |
Cash Flow | ||||||
| Free Cash Flow | 16.37M | 15.04M | 20.11M | 20.27M | 12.75M | -4.12M |
| Operating Cash Flow | 16.37M | 15.04M | 20.11M | 20.27M | 12.75M | 792.00K |
| Investing Cash Flow | -66.69M | -72.96M | 21.26M | 35.84M | -84.07M | -283.86M |
| Financing Cash Flow | 65.28M | 110.64M | -58.48M | -39.33M | 116.09M | 205.80M |
Seven Hills Realty Trust Technical Analysis
Positive
8.16
Price Trends
8.39
Positive
8.27
Positive
8.46
Negative
Market Momentum
<0.01
Positive
49.63
Neutral
10.62
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SEVN, the sentiment is Positive. The current price of 8.16 is below the 20-day moving average (MA) of 8.39, below the 50-day MA of 8.39, and below the 200-day MA of 8.46, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 49.63 is Neutral, neither overbought nor oversold. The STOCH value of 10.62 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $187.32M | 9.43 | 5.14% | 13.82% | -7.31% | -22.36% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
58 Neutral | $124.30M | 25.09 | 6.11% | ― | -11.12% | 106.91% | |
58 Neutral | $84.13M | 20.65 | 6.09% | 21.65% | -7.99% | ― | |
55 Neutral | $247.11M | 19.18 | 6.11% | 9.61% | 15.52% | -54.74% | |
49 Neutral | $48.72M | -7.31 | -0.90% | 23.03% | -28.61% | -164.74% | |
46 Neutral | $64.69M | -1.26 | -6.46% | 7.97% | -23.52% | 64.81% |
* Real Estate Sector Average
SEVN
Seven Hills Realty Trust
8.40
-1.34
-13.72%
ACR
ACRES Commercial Realty
17.32
-0.58
-3.24%
MITT
AG Mortgage
7.72
0.90
13.25%
LFT
Lument Finance Trust
0.94
-0.96
-50.45%
CHMI
Cherry Hill Mortgage
2.30
-0.02
-1.03%
GPMT
Granite Point Mortgage
1.38
-0.88
-39.05%
Seven Hills Realty Trust Corporate Events
Executive/Board ChangesShareholder Meetings
Seven Hills Realty Trust Announces Trustee Changes, Board Re-Elections
Positive
Jun 10, 2026
On June 9, 2026, Seven Hills Realty Trust announced that independent trustee Jeffrey P. Somers resigned effective at the close of the company’s annual shareholder meeting, with the board noting his departure did not arise from any disagreeme...
Business Operations and StrategyFinancial Disclosures
Seven Hills Realty Highlights Portfolio Strength and Growth Plans
Positive
Jun 1, 2026
On June 1, 2026, Seven Hills Realty Trust released an investor presentation detailing a fully performing portfolio of senior secured, floating rate first mortgage loans diversified across geographies, sponsors and property types, with a conservati...
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.