Service Properties (SVC) AI Stock Analysis

• Market Cap: $351.25M
• Dividend Yield: 2.31%
• Average Volume (3M): 1.46M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.22
• Revenue Growth: -0.56%
• EPS Growth: -14.18%
• Country: US
• Employees: N/A
• Sector: Real Estate
• Sector Strength: 53
• Industry: REIT - Hotel & Motel
• EPS (TTM): 0.00
• Shares Outstanding: 168,061,040
• 10 Day Avg. Volume: 1,190,175
• 30 Day Avg. Volume: 1,459,907
• PEG Ratio: 0.06
• Price to Book (P/B): 0.47
• Price to Sales (P/S): 0.17
• P/FCF Ratio: 2.59
• Enterprise Value/Market Cap: 15.58
• Enterprise Value/Revenue: 3.01
• Enterprise Value/Gross Profit: -76.41
• Enterprise Value/Ebitda: 10.96
• 1Y Price Target: $2.00
• Price Target Upside: -5.66% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): -1.16
• Revenue Forecast (FY): $1.60B

• Rating: 53 Neutral
• Price Target: $2.00 ▼(-5.66% Downside)
• Action: Reiterated Date: 02/26/26
• Date: Action: Reiterated 02/26/26

The score is held back primarily by weak financial performance (ongoing losses and historically high leverage, with a notable 2025 EBITDA deterioration). Offsetting factors include constructive technical momentum and improving balance-sheet flexibility from asset sales and debt refinancing, while valuation remains constrained by negative earnings and only a modest dividend yield.

Positive Factors

Balance-sheet de-risking via asset-backed financing

The issuance of ABS and planned redemption of high-cost 2029 unsecured notes converts expensive unsecured liabilities into asset-backed financing. This materially improves the debt maturity profile and reduces refinancing and interest-rate risk, creating lasting balance-sheet flexibility to support deleveraging and covenant stability.

Stable net-lease cash flows and high occupancy

The net-lease portfolio delivers predictable, triple-net style cash flows with >2% rent growth and >97% occupancy. Such low-operating-risk leases provide durable property-level income that cushions overall cash generation, reduces earnings volatility versus hotels, and supports debt service and distributions over multiple quarters.

Consistent operating and free cash flow generation

Consistent positive operating and free cash flow—even amid accounting losses—gives the company internal liquidity to fund debt repayments, asset dispositions and working capital. Rebounding FCF in 2023 and a 36% YoY improvement in 2025 underpin sustainable cash generation supporting restructuring efforts and near-term obligations.

Negative Factors

Historically elevated leverage and equity erosion

A multi-year record of very high leverage and declining equity materially weakens the balance sheet, limiting financial flexibility. High debt ratios increase sensitivity to interest rates and asset-value declines, elevate refinancing and covenant risk, and constrain the company's ability to absorb shocks without further asset sales or dilutive financing.

Persistent net losses and 2025 EBITDA deterioration

Ongoing net losses and a material 2025 EBITDA decline undermine internal capital formation and profit sustainability. Negative margins erode retained earnings, impede equity rebuilding, and force reliance on asset sales or external financing to restore balance-sheet health, constraining long-term strategic optionality.

Hotel operating headwinds and expense pressures

An 18.9% drop in hotel EBITDA, rising interest expense and episodic shocks (fires, higher insurance and labor costs) make hotel cash flows volatile and less reliable. Such structural headwinds increase downside risk for hotel assets, complicate recovery of operating margins, and heighten reliance on non-hotel cash sources for stability.

Service Properties Business Overview & Revenue Model

Company Description

Service Properties Trust is a real estate investment trust, or REIT, which owns a diverse portfolio of hotels and net lease service and necessity-based retail properties across the United States and in Puerto Rico and Canada with 149 distinct brands across 23 industries. SVC's properties are primarily operated under long-term management or lease agreements. SVC is managed by the operating subsidiary of The RMR Group Inc. (Nasdaq: RMR), or RMR Inc., an alternative asset management company that is headquartered in Newton, Massachusetts.

How the Company Makes Money

SVC primarily makes money by collecting rent and related property income from long-term leases on its real estate portfolio. Its key revenue streams are (1) lease income from hotel properties, where the underlying hotels are operated by third-party managers and SVC earns revenue as a landlord based on contractual lease terms rather than directly selling room nights, and (2) lease income from service-oriented, net-lease retail properties, where tenants operate their businesses and pay rent (often under triple-net style structures in which tenants typically bear many property operating costs such as taxes, insurance, and maintenance, depending on specific lease terms). Additional earnings can come from contractual rent escalators, percentage-based rent components where applicable, tenant reimbursements and other property-level recoveries, and gains (or losses) from selling properties. As a REIT, SVC’s ability to generate and distribute cash flow is influenced by occupancy/tenant performance, lease structures and credit quality, hotel industry demand cycles that affect lessee/operator economics and lease coverage, and its cost of capital (including interest expense on debt). Significant partnerships: null.

Service Properties Financial Statement Overview

Summary

Revenue has been relatively stable but profitability is weak with persistent net losses and a sharp 2025 deterioration in EBITDA. Cash flow is a support (positive operating and free cash flow), but volatility and historically high leverage/equity erosion constrain overall financial quality.

Income Statement

Revenue has been relatively stable since 2022 (~$1.86B–$1.90B) but turned slightly down in 2025 (-3.15% YoY). Profitability is the key weakness: net losses persist every year shown (near break-even in 2023, but a larger loss again in 2024 and 2025), keeping net margins negative (about -11% in 2025 and -15% in 2024). While operating-level profitability looked healthier in 2022–2024 (positive EBIT/EBITDA margins), the 2025 EBITDA figure is sharply negative, indicating a material deterioration in operating performance or higher costs/charges.

Balance Sheet

Leverage is elevated: debt-to-equity was very high in 2022–2024 (roughly 4.1x–6.7x), which increases refinancing and downturn risk for a lodging REIT. Equity has also trended down meaningfully from 2020–2024, and returns on equity are consistently negative, reflecting ongoing losses. 2025 shows zero reported debt and a lower asset base versus prior years, which may reflect reporting/structure changes or major balance sheet actions, but the multi-year history still points to a highly leveraged profile and weakened equity cushion.

Cash Flow

Cash generation is a relative bright spot: operating cash flow and free cash flow are positive in every year shown. Free cash flow rebounded strongly in 2023 and improved again in 2025 (up 36% YoY), supporting liquidity despite net losses. However, cash flow has been volatile (very low in 2020–2021, much stronger in 2022–2023, then lower again in 2024–2025), and in several years operating cash flow covered only a small portion of obligations as implied by the low coverage ratios (notably 2020–2022 and 2024).

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.81B	1.90B	1.87B	1.86B	1.50B
Gross Profit	-71.61M	602.96M	632.29M	622.48M	469.19M
EBITDA	379.06M	462.63M	664.80M	588.09M	286.05M
Net Income	-202.32M	-275.53M	-32.78M	-132.38M	-544.60M
Balance Sheet
Total Assets	6.49B	7.12B	7.36B	7.49B	9.15B
Cash, Cash Equivalents and Short-Term Investments	346.81M	143.48M	180.12M	38.37M	944.04M
Total Debt	5.48B	5.71B	5.52B	5.66B	7.14B
Total Liabilities	5.85B	6.27B	6.13B	6.10B	7.60B
Stockholders Equity	646.12M	851.87M	1.23B	1.39B	1.56B
Cash Flow
Free Cash Flow	117.81M	139.39M	485.55M	243.13M	49.90M
Operating Cash Flow	117.81M	139.39M	485.55M	243.13M	49.90M
Investing Cash Flow	528.71M	-222.86M	-29.58M	397.25M	-101.31M
Financing Cash Flow	-431.82M	43.02M	-303.56M	-1.54B	907.37M

Service Properties Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.12
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SVC, the sentiment is Negative. The current price of 2.12 is below the 20-day moving average (MA) of 2.18, below the 50-day MA of 2.14, and below the 200-day MA of 2.29, indicating a bearish trend. The MACD of -0.01 indicates Positive momentum. The RSI at 44.32 is Neutral, neither overbought nor oversold. The STOCH value of 26.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SVC.

Service Properties Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CLDT	66 Neutral	$365.27M	22.07	1.13%	5.00%	-3.79%	―
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
INN	54 Neutral	$524.99M	-65.40	-0.56%	6.61%	-1.20%	-328.23%
SVC	53 Neutral	$351.25M	―	-29.70%	2.31%	-0.56%	-14.18%
AHT	46 Neutral	$20.34M	-0.14	56.27%	―	-7.89%	-833.99%
BHR	45 Neutral	$166.89M	-1.46	-4.39%	7.17%	-2.84%	-11.92%

Service Properties Corporate Events

Service Properties Announces Major ABS Issuance and Debt Redemption

On February 20, 2026, Service Properties’ special purpose subsidiaries agreed to sell $745 million of non-recourse Net-Lease Mortgage Notes Series 2026-1 to qualified institutional investors, backed by 472 net lease retail properties and split into three tranches rated AAA, AA and BBB by S&P. The notes, expected to be issued around March 6, 2026 and maturing in March 2031, should generate about $730 million in net proceeds earmarked for debt repayment and general corporate purposes, strengthening the company’s balance sheet.

Also on February 20, 2026, the company sent a redemption notice for all $700 million of its 8.375% Senior Guaranteed Unsecured Notes due 2029, with the redemption anticipated on or about March 7, 2026. Service Properties expects to fund this redemption largely with the new ABS proceeds, effectively refinancing higher-cost unsecured debt with asset-backed financing and potentially reducing interest expense over time.

The most recent analyst rating on (SVC) stock is a Hold with a $2.00 price target. To see the full list of analyst forecasts on Service Properties stock, see the SVC Stock Forecast page.

Service Properties Trust completes major hotel portfolio sale

On January 22, 2026, Service Properties Trust completed the sale of one 133-key hotel for $7.1 million, finalizing a previously arranged 35-hotel, 4,247-key portfolio sale totaling $230.3 million, excluding closing costs. In the broader disposition program launched January 1, 2025, the company had sold 105 hotels from a larger 113-hotel portfolio plus eight additional hotels, generating aggregate hotel sale proceeds of $865.9 million as of January 22, 2026, which it has indicated will be used to repay debt; the completion of the 35-hotel portfolio constitutes a significant disposition and is reflected in newly issued unaudited pro forma financial statements showing the company’s balance sheet and results as if these sales had been completed in 2024–2025, highlighting an ongoing strategic shift in its hotel holdings and capital structure.

The most recent analyst rating on (SVC) stock is a Sell with a $2.00 price target. To see the full list of analyst forecasts on Service Properties stock, see the SVC Stock Forecast page.

Service Properties Trust Updates Management Fee Benchmark Index

On January 1, 2026, Service Properties Trust and its external manager, The RMR Group LLC, amended their long-standing business management agreement to change the benchmark index used to calculate incentive management fees and assess termination for performance. For periods beginning on or after that date, the agreement will reference the MSCI US REIT Diversified Index instead of the prior MSCI U.S. REIT/Hotel & Resort REIT Index for these purposes, a move that was reviewed and approved by the company’s Compensation Committee composed solely of independent trustees, signaling an adjustment in how management performance is measured and potentially aligning incentives with a broader diversified REIT market benchmark.

The most recent analyst rating on (SVC) stock is a Hold with a $1.50 price target. To see the full list of analyst forecasts on Service Properties stock, see the SVC Stock Forecast page.

Service Properties Trust Advances Large-Scale Hotel Disposition Strategy

On December 16 and 17, 2025, Service Properties Trust completed the sale of six hotels totaling 870 keys for $90.5 million, excluding closing costs, as part of a broader asset disposition strategy that includes the previously announced 45-hotel sale portfolio. Since January 1, 2025, the REIT has sold 104 of the 113 hotels designated for sale, plus eight additional hotels, realizing $858.8 million in proceeds before closing costs, and remains under contract to sell two more hotels for $11.9 million while seeking buyers or potential remarketing in early 2026 for seven remaining assets; upon completion of the pending transactions, total proceeds from hotel dispositions are expected to reach $870.7 million, which the company has indicated will be used to repay debt and is significant enough to warrant pro forma financial disclosure due to the scale of the portfolio shift.

The most recent analyst rating on (SVC) stock is a Hold with a $1.50 price target. To see the full list of analyst forecasts on Service Properties stock, see the SVC Stock Forecast page.