Service Properties (SVC) AI Stock Analysis

• Market Cap: $506.57M
• Dividend Yield: 1.32%
• Average Volume (3M): 1.25M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.16
• Revenue Growth: 0.78%
• EPS Growth: -128.16%
• Country: US
• Employees: N/A
• Sector: Real Estate
• Sector Strength: 59
• Industry: REIT - Hotel & Motel
• EPS (TTM): -0.70
• Shares Outstanding: 166,636,140
• 10 Day Avg. Volume: 1,726,533
• 30 Day Avg. Volume: 1,248,553
• PEG Ratio: 0.11
• Price to Book (P/B): 0.63
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 1.82
• Enterprise Value/Market Cap: 11.94
• Enterprise Value/Revenue: 0.80
• Enterprise Value/Gross Profit: 7.66
• Enterprise Value/Ebitda: 2.77
• 1Y Price Target: $3.00
• Price Target Upside: -1.32% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 57 Neutral
• Price Target: $3.00 ▼(-1.32%Downside)

The overall stock score reflects significant financial challenges due to negative profitability and high leverage. Technical analysis provides some positive momentum, but valuation concerns with a negative P/E ratio weigh heavily. The earnings call offers a balanced but cautious outlook.

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

Service Properties Trust generates revenue primarily through leasing its properties to tenants, including hotel operators and retail businesses. The company's income is largely derived from rental payments under long-term lease agreements and management contracts with hotel operators. A significant portion of its earnings comes from its hotel properties, which are managed by well-known hotel brands under management agreements that typically include base and incentive management fees. Additionally, SVC benefits from stable cash flows from its net lease properties, which are subject to long-term, triple-net lease agreements where tenants are responsible for most property-related expenses. The company's strategic partnerships with leading hotel operators and its focus on service-oriented properties are key factors contributing to its financial performance.

Service Properties Financial Statement Overview

Summary

Service Properties is facing financial challenges with negative profitability margins and high leverage. The declining equity ratio and inconsistent cash flows highlight significant risks, though there are efforts to manage debt.

Income Statement

The income statement shows a concerning trend with negative net income in recent periods and a declining gross profit margin from 33.5% in 2024 to 28.5% TTM (Trailing-Twelve-Months). The revenue growth rate is minimal at 1.7% from 2023 to 2024, with a slight decrease in 2025 TTM. Negative EBIT and Net Profit Margins indicate financial distress, affecting profitability.

Balance Sheet

The balance sheet reveals high leverage with a debt-to-equity ratio of 7.71 TTM, reflecting significant financial risk. The equity ratio has been declining from 16.7% in 2021 to 10.5% TTM, indicating reduced financial stability. However, the decrease in total liabilities suggests some effort in managing debt, albeit not sufficient to offset overall risks.

Cash Flow

Cash flow analysis shows inconsistent free cash flow with a drastic decline from 2023 to the TTM period. The operating cash flow to net income ratio indicates challenges in converting income to cash, exacerbated by negative net income. This instability in cash flows raises concerns about liquidity and operational efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.90B	1.90B	1.87B	1.86B	1.50B	1.27B
Gross Profit	789.88M	602.96M	632.29M	635.65M	484.84M	567.35M
EBITDA	509.68M	555.83M	664.80M	581.45M	286.05M	501.76M
Net Income	-313.58M	-275.53M	-32.78M	-135.24M	-543.66M	-301.47M
Balance Sheet
Total Assets	6.98B	7.12B	7.36B	7.49B	9.15B	8.69B
Cash, Cash Equivalents and Short-Term Investments	80.15M	143.48M	180.12M	38.37M	944.04M	73.33M
Total Debt	5.66B	5.71B	5.52B	5.66B	7.14B	6.21B
Total Liabilities	6.24B	6.27B	6.13B	6.10B	7.60B	6.58B
Stockholders Equity	734.57M	851.87M	1.23B	1.39B	1.56B	2.10B
Cash Flow
Free Cash Flow	254.78M	139.39M	485.55M	293.55M	151.23M	-152.43M
Operating Cash Flow	178.52M	139.39M	485.55M	243.13M	49.90M	37.60M
Investing Cash Flow	-190.22M	-222.86M	-29.58M	397.25M	-101.31M	-51.81M
Financing Cash Flow	18.47M	43.02M	-303.56M	-1.54B	907.37M	24.40M

Service Properties Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3.04
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SVC, the sentiment is Positive. The current price of 3.04 is above the 20-day moving average (MA) of 2.66, above the 50-day MA of 2.45, and above the 200-day MA of 2.65, indicating a bullish trend. The MACD of 0.13 indicates Negative momentum. The RSI at 63.21 is Neutral, neither overbought nor oversold. The STOCH value of 83.33 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SVC.

Service Properties Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
XHR	70 Outperform	$1.32B	59.55	1.83%	3.90%	3.57%	12.66%
CLDT	70 Outperform	$357.59M	126.74	1.42%	4.38%	1.75%	―
PEB	69 Neutral	$1.28B	―	-0.33%	0.37%	2.18%	56.00%
INN	65 Neutral	$726.64M	45.76	4.45%	5.88%	-1.86%	―
Sector *	64 Neutral	$6.89B	17.45	-1.92%	7.02%	4.59%	-24.66%
RLJ	64 Neutral	$1.20B	30.14	2.92%	7.79%	2.82%	-8.08%
SVC	57 Neutral	$506.57M	―	-33.91%	1.32%	0.78%	-128.16%

Service Properties Corporate Events

Service Properties Shareholders Approve Governance Resolutions

At the recent Annual Meeting, Service Properties‘ shareholders elected seven Trustees to the Board for a one-year term, with the election results showing varying levels of support for each nominee. Additionally, shareholders approved a non-binding advisory resolution on executive compensation, the Share Award Plan, and ratified Deloitte & Touche LLP as the independent auditors for the 2025 fiscal year, reflecting continued confidence in the company’s governance and operational strategies.

The most recent analyst rating on (SVC) stock is a Buy with a $8.00 price target. To see the full list of analyst forecasts on Service Properties stock, see the SVC Stock Forecast page.

Service Properties Trust Outlines Strategic Priorities in June 2025

On June 2, 2025, Service Properties Trust released an investor presentation outlining its strategic priorities and financial position. The company emphasized its focus on rebalancing its hotel portfolio towards full-service urban and leisure-oriented properties, reducing leverage through planned hotel sales, and acquiring single-tenant freestanding properties that are service-oriented and e-commerce resistant. The presentation highlighted the company’s strong financial position with no near-term debt maturities and ample liquidity, positioning it to optimize its portfolio and generate consistent cash flows with embedded growth. The strategic initiatives aim to enhance asset quality, market share, and operating performance, potentially impacting the company’s valuation and stakeholder interests.

The most recent analyst rating on (SVC) stock is a Buy with a $8.00 price target. To see the full list of analyst forecasts on Service Properties stock, see the SVC Stock Forecast page.