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Service Properties Trust (SVC)
NASDAQ:SVC

Service Properties (SVC) AI Stock Analysis

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SVC

Service Properties

(NASDAQ:SVC)

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Neutral 49 (OpenAI - 5.2)
Rating:49Neutral
Price Target:
$2.00
▼(-6.98% Downside)
The score is held down primarily by weak financial performance (losses, high leverage, and unstable cash flows) and bearish technicals (below key moving averages with negative MACD). Offsetting factors include earnings-call progress on liquidity and debt maturities via substantial asset-sale and financing proceeds, while valuation support is limited given negative earnings despite a modest dividend yield.
Positive Factors
Net-lease portfolio stability
High occupancy (>97%), steady rent growth and stable coverage in the net-lease portfolio create predictable, contractually driven cash flows that are less cyclical than hotel operations. As SVC shifts to a majority net-lease model, this improves revenue visibility and reduces operating volatility, supporting consistent debt service and long-term cash generation.
Successful capital raises and liability reduction
Securing over $850M via asset sales and bond issuance materially improved liquidity and enabled repayment of the revolver and 2026 notes. This durable improvement in funding and maturity profile lowers near-term refinancing risk and provides strategic runway to execute portfolio transformation and deleveraging initiatives.
Accelerated hotel disposition strategy
Rapid disposition of over 90% of designated hotels for nearly $859M represents a structural pivot from operating hotels toward net-lease assets. Converting capital-heavy, variable hotel assets into sale proceeds and long-term leases reduces operational risk, converts cash needs into predictable rent, and strengthens balance sheet durability.
Negative Factors
High leverage and weakened equity base
Very high leverage and a shrinking equity ratio materially increase financial vulnerability. Elevated debt amplifies earnings volatility, raises interest burden, constrains flexibility for refinancing or opportunistic investments, and leaves the company exposed if asset-sale timing or proceeds underperform expectations.
Negative earnings and margin pressure
Persistent negative net income and falling gross margins signal structural profitability issues. Continued losses limit the company's ability to self-fund investments or cover debt organically, increasing dependence on asset sales and external financing to meet obligations and sustain operations over the medium term.
Hotel operating weakness and disruptions
An almost 19% drop in hotel EBITDA, driven by weaker demand, rising labor and insurance costs, and fire-related disruptions, shows the hotel segment remains volatile. Continued weakness undermines remaining cash flows, could slow deleveraging, and risks additional impairments or operational losses absent sustained recovery.

Service Properties (SVC) vs. SPDR S&P 500 ETF (SPY)

Service Properties Business Overview & Revenue Model

Company DescriptionService 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 MoneyService Properties Trust generates revenue primarily through rental income from its hotel and service properties. The company leases its properties to various hotel operators, who manage the day-to-day operations and pay rent based on fixed terms or a percentage of revenues. Key revenue streams include base rent from long-term leases, percentage rents tied to property performance, and income from management fees associated with its properties. Additionally, SVC may benefit from strategic partnerships with leading hotel brands, which can enhance its occupancy rates and overall profitability. The company also explores opportunities for capital appreciation through property acquisitions and developments, further contributing to its revenue.

Service Properties Earnings Call Summary

Earnings Call Date:Nov 05, 2025
(Q3-2025)
|
% Change Since: |
Next Earnings Date:Mar 04, 2026
Earnings Call Sentiment Neutral
The call reflected a mix of strategic progress, particularly in capital market activities and debt management, alongside challenges in the hotel segment due to market headwinds and increased expenses. While there are significant achievements in asset sales and net lease performance, the decline in hotel EBITDA and other disruptions indicate a balanced sentiment.
Q3-2025 Updates
Positive Updates
Successful Capital Market Activities
Raised over $850 million in proceeds, including $295 million from asset sales during the quarter, $67 million in asset sales in October and November, and approximately $490 million from the issuance of new zero-coupon bonds.
Debt Management and Financial Flexibility
Fully repaid the revolving credit facility and retired all 2026 senior notes, improving debt maturity profile and enhancing covenant position.
Hotel Sales Progress
On track to complete the sale of 121 hotels for gross proceeds of $959 million, with 6 hotels sold for $66.5 million in October and 69 more expected to close in November and December for $567.5 million.
Net Lease Segment Performance
Net lease portfolio delivered steady performance with rent growth over 2%, stable rent coverage, and occupancy over 97%.
RevPAR Growth
RevPAR increased 20 basis points year-over-year, outpacing the broader industry by 160 basis points, driven by occupancy gains.
Negative Updates
Decline in Hotel EBITDA
Hotel EBITDA declined 18.9% from the prior year due to softer demand and expense pressures, including elevated labor costs and insurance expenses.
Interest Expense Increase
Interest expense increased by $8.7 million year-over-year.
Travel Market Headwinds
U.S. travel market facing headwinds with uneven demand trends amid economic uncertainty, affecting hotel performance.
Insurance and Fire-Related Disruptions
Significant disruption from fire-related events at two full-service hotels, impacting performance.
Impairment Charges
A $27 million impairment was recorded due to shifting of purchase price allocations among hotel portfolios.
Company Guidance
During the Service Properties Trust Third Quarter 2025 Earnings Conference Call, the company provided guidance that includes adjusted hotel EBITDA, although they did not provide a reconciliation of this non-GAAP measure due to the unavailability of certain required information. The call highlighted a sequential decline in fourth-quarter RevPAR, projected to be between $86 and $89, and adjusted hotel EBITDA anticipated to range from $20 million to $25 million. This guidance reflects seasonal declines and industry headwinds. Additionally, the company has raised over $850 million in proceeds, including $295 million from asset sales, $67 million from sales in October and November, and about $490 million from zero-coupon bonds. The proceeds improved SVC's debt maturity profile by repaying the revolving credit facility and retiring all 2026 senior notes. The company plans to use proceeds from remaining hotel sales, projected to bring in $567.5 million, to repay February 2027 senior unsecured notes.

Service Properties Financial Statement Overview

Summary
Service Properties is facing financial challenges with negative profitability margins and high leverage. The company's declining equity ratio and inconsistent cash flows highlight significant risks. While there are efforts to manage debt, the overall financial health remains precarious, necessitating strategic interventions to stabilize operations and improve financial outcomes.
Income Statement
40
Negative
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
55
Neutral
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
50
Neutral
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.87B1.90B1.87B1.86B1.50B1.27B
Gross Profit576.90M602.96M632.29M622.48M469.19M582.45M
EBITDA427.49M462.63M664.80M588.09M286.05M506.27M
Net Income-277.93M-275.53M-32.78M-132.38M-544.60M-311.38M
Balance Sheet
Total Assets6.98B7.12B7.36B7.49B9.15B8.69B
Cash, Cash Equivalents and Short-Term Investments417.42M143.48M180.12M38.37M944.04M73.33M
Total Debt5.77B5.71B5.52B5.66B7.14B6.21B
Total Liabilities6.33B6.27B6.13B6.10B7.60B6.58B
Stockholders Equity647.91M851.87M1.23B1.39B1.56B2.10B
Cash Flow
Free Cash Flow28.54M139.39M485.55M243.13M49.90M37.60M
Operating Cash Flow28.54M139.39M485.55M243.13M49.90M37.60M
Investing Cash Flow-137.04M-222.86M-29.58M397.25M-101.31M-51.81M
Financing Cash Flow131.69M43.02M-303.56M-1.54B907.37M24.40M

Service Properties Technical Analysis

Technical Analysis Sentiment
Positive
Last Price2.15
Price Trends
50DMA
1.86
Positive
100DMA
2.20
Negative
200DMA
2.27
Negative
Market Momentum
MACD
0.08
Negative
RSI
66.50
Neutral
STOCH
79.42
Neutral
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 2.15 is above the 20-day moving average (MA) of 1.96, above the 50-day MA of 1.86, and below the 200-day MA of 2.27, indicating a neutral trend. The MACD of 0.08 indicates Negative momentum. The RSI at 66.50 is Neutral, neither overbought nor oversold. The STOCH value of 79.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SVC.

Service Properties Risk Analysis

Service Properties disclosed 59 risk factors in its most recent earnings report. Service Properties 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

Service Properties Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
65
Neutral
$2.17B12.193.79%4.94%3.15%1.96%
59
Neutral
$574.95M-25.190.16%6.61%-1.20%-328.23%
59
Neutral
$339.61M630.631.13%5.00%-3.79%
57
Neutral
$208.07M-3.34-1.09%7.17%-2.84%-11.92%
51
Neutral
$44.12M-5.31-0.68%-0.57%-24.28%
49
Neutral
$361.39M-1.28-35.25%2.31%-0.56%-14.18%
46
Neutral
$29.17M-0.10-7.89%-833.99%
* Real Estate Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SVC
Service Properties
2.15
-0.41
-16.02%
INN
Summit Hotel Properties
4.75
-1.53
-24.36%
CLDT
Chatham Lodging
6.91
-1.59
-18.71%
AHT
Ashford Hospitality
4.80
-3.99
-45.39%
BHR
Braemar Hotels & Resorts
2.89
0.48
19.92%
SOHO
Sotherly Hotels
2.17
1.29
146.59%

Service Properties Corporate Events

Business Operations and Strategy
Service Properties Trust Updates Management Fee Benchmark Index
Neutral
Jan 5, 2026

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.

Business Operations and StrategyFinancial DisclosuresM&A Transactions
Service Properties Trust Advances Large-Scale Hotel Disposition Strategy
Positive
Dec 22, 2025

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.

Business Operations and StrategyM&A Transactions
Service Properties Sells Five Hotels for $47.2 Million
Neutral
Dec 16, 2025

On December 10, 2025, Service Properties Trust (SVC) sold five hotels with a total of 679 keys across four states for $47.2 million, as part of a larger agreement to sell 113 hotels for $913.3 million. Since January 1, 2025, SVC has sold 98 hotels for $722.7 million and is under agreement to sell eight more for $102.4 million, with proceeds intended for debt repayment. SVC terminated the sale of seven hotels and is seeking alternative buyers or remarketing in 2026.

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.

Business Operations and StrategyM&A Transactions
Service Properties Sells Eight Hotels in Strategic Move
Neutral
Dec 9, 2025

On December 4, 2025, Service Properties Trust (SVC) sold eight hotels as part of its ongoing strategy to sell a total of 113 hotels for $913.3 million. To date, SVC has sold 93 hotels for $675.5 million, with plans to complete the sale of the remaining 20 hotels by the end of 2025. The proceeds from these sales are intended to repay debt, although one buyer has attempted to terminate an agreement for seven hotels, which SVC is contesting. The company’s strategic asset sales are part of its transformation to a majority net lease REIT, aiming to strengthen its balance sheet and reduce leverage.

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.

Business Operations and StrategyM&A Transactions
Service Properties Sells 34 Hotels for $224.7M
Neutral
Nov 24, 2025

On November 18 and 19, 2025, Service Properties Trust (SVC) sold a total of 34 hotels across 21 states for a combined sales price of $224.7 million, excluding closing costs. These sales are part of a larger agreement to sell 113 hotels for $913.3 million. To date, SVC has sold 85 hotels for $618.5 million and plans to complete the sale of the remaining 28 hotels by the end of 2025. The proceeds from these sales are expected to be used to repay debt, marking a significant shift in SVC’s asset portfolio.

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.

Business Operations and StrategyM&A Transactions
Service Properties Sells Seven Hotels for $48 Million
Neutral
Nov 18, 2025

On November 13, 2025, Service Properties Trust (SVC) sold seven hotels with a total of 839 keys across five states for $48 million, as part of a larger plan to sell 113 hotels for $913.3 million. To date, 51 hotels have been sold for $393.8 million, and 62 more are under agreement to be sold by the end of 2025. The proceeds from these sales are intended to repay debt, and the sales are significant enough to require pro forma financial information under regulatory guidelines.

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.

Business Operations and StrategyM&A Transactions
Service Properties Sells Three Hotels for $29 Million
Neutral
Nov 4, 2025

On October 29, 2025, Service Properties Trust (SVC) sold three hotels totaling 390 keys for $29.0 million as part of a larger agreement to sell 113 hotels. To date, SVC has sold 44 hotels for $345.8 million and plans to sell the remaining 69 hotels by the end of 2025. The proceeds from these sales are expected to be used to repay debt, impacting SVC’s financial strategy and potentially improving its debt position.

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.

Business Operations and StrategyM&A Transactions
Service Properties Sells California Hotel for $27.5M
Neutral
Oct 28, 2025

On October 22, 2025, Service Properties Trust (SVC) sold a hotel in California for $27.5 million as part of a larger agreement to sell 113 hotels for a total of $913.3 million. To date, SVC has sold 41 hotels for $316.8 million and plans to sell the remaining 72 hotels by the end of 2025. The proceeds from these sales are expected to be used to repay debt. The sales of 15 hotels in the 45 Hotel Sale Portfolio have been significant enough to require pro forma financial information, reflecting the company’s financial position as of June 30, 2025.

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.

Business Operations and StrategyM&A Transactions
Service Properties Sells Two Hotels for $10 Million
Neutral
Oct 21, 2025

Service Properties Trust (SVC) announced the sale of two hotels, totaling 235 keys, for $10 million on October 15, 2025, as part of a larger agreement to sell 113 hotels for $913.3 million. To date, SVC has sold 40 hotels, generating $289.3 million, and plans to complete the sale of the remaining 73 hotels by the end of 2025. The proceeds from these sales are intended to repay debt, which could impact the company’s financial stability and market position.

The most recent analyst rating on (SVC) stock is a Hold with a $2.50 price target. To see the full list of analyst forecasts on Service Properties stock, see the SVC Stock Forecast page.

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.Date of analysis: Dec 25, 2025