Education
About Us
Working with TipRanks
Follow Us
Service Properties Trust (SVC)
NASDAQ:SVC
Top Page
Service Properties
(NASDAQ:SVC)
Rating:54Neutral
Price Target:
$2.50
▲(2.04%Upside)
Service Properties (SVC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$413.26M
Dividend Yield1.61%
Average Volume (3M)1.54M
Price to Earnings (P/E)―
Beta (1Y)1.19
Revenue Growth0.78%
EPS Growth-128.16%
CountryUS
EmployeesN/A
SectorReal Estate
Sector Strength63
IndustryREIT - Hotel & Motel
Share Statistics
EPS (TTM)-0.70
Shares Outstanding166,636,140
10 Day Avg. Volume1,001,391
30 Day Avg. Volume1,535,418
Financial Highlights & Ratios
PEG Ratio0.12
Price to Book (P/B)0.86
Price to Sales (P/S)0.00
P/FCF Ratio4.09
Enterprise Value/Market Cap16.50
Enterprise Value/Revenue0.90
Enterprise Value/Gross Profit8.63
Enterprise Value/Ebitda3.13
Forecast
1Y Price Target
$2.50Price Target Upside2.04% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
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 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 Earnings Call Summary
Earnings Call Date:May 06, 2025
(Q1-2025)
| % Change Since: 18.36%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture. While there were notable achievements in terms of RevPAR growth and successful strategic asset dispositions, challenges such as declines in adjusted hotel EBITDA, RevPAR softening, and financial impacts from decreased interest expenses also prevailed. The balanced nature of the highlights and lowlights suggests a neutral outlook for the company.Q1-2025 Updates
Positive Updates
Comparable RevPAR Growth
RevPAR grew 2.6% year-over-year within the lodging portfolio, outpacing the industry by 40 basis points despite revenue displacement from renovation activity.
Select Service Portfolio Performance
The select service portfolio produced exceptional growth with RevPAR up 10.6% year-over-year, driven by a 15% occupancy rise and 2.7% improvement in ADR at recently renovated Hyatt Place hotels.
Successful Hotel Disposition Strategy
SVC plans to sell 125 hotels in 2025 for approximately $1.1 billion, applying an 18x multiple on hotel EBITDA of $60 million over the trailing 12 months.
Net Lease Portfolio Resilience
The net lease assets were nearly 98% leased with a weighted average lease term of eight years and provided stable cash flows with annual minimum rents of $381 million.
Net Lease Property Acquisitions
Acquired or entered agreements to acquire nine net lease properties for $33 million, with a weighted average lease term of 16 years and average cash cap rates of 7.3%.
Negative Updates
Decline in Adjusted Hotel EBITDA
Adjusted hotel EBITDA declined 20.5% year-over-year primarily due to hotel renovations, increases in labor, and higher utility costs.
RevPAR Softening
RevPAR softened as the quarter progressed, driven by a pullback in government and inbound international travel, as well as airlines reducing flight commitments.
Extended Stay Portfolio Challenges
In the extended stay portfolio, RevPAR was essentially flat as a modest increase in ADR was offset by a decline in occupancy, with significant impact from renovation activity.
Interest Expense Decrease Impact
A $10.1 million decrease in interest expense impacted financial results, contributing to a decline in normalized FFO to $0.07 per share from $0.13 per share in the prior year quarter.
Company Guidance
During the Service Properties Trust First Quarter 2025 Earnings Conference Call, the company provided several metrics and guidance regarding its performance and strategic initiatives. The first quarter saw a comparable RevPAR growth of 2.6% in their lodging portfolio despite challenges such as renovation disruptions. The company is on track to sell 123 hotels in 2025, expecting proceeds of $1.1 billion, with a significant shift towards increasing net lease retail properties. They reported a 10.6% year-over-year growth in RevPAR for their select service portfolio, driven by occupancy gains, and maintained steady operating performance in their net lease retail properties, which were 98% leased with a weighted average lease term of eight years. For the second quarter of 2025, the company projects RevPAR between $99 and $102 and adjusted hotel EBITDA between $69 million and $74 million. Additionally, they anticipate that the composition of SVC's investments will shift to 54% triple net lease and 46% lodging assets post-dispositions and acquisitions.Service Properties Financial Statement Overview
Summary
Service Properties is facing significant financial challenges with negative profitability margins, high leverage, and inconsistent cash flows. The declining equity ratio and negative net income highlight the need for strategic interventions to stabilize operations and improve financial outcomes.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.40
Negative
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.55
Neutral
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.50
Neutral
| 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 | EBIT |
| 297.43M | 190.93M | 253.30M | 180.34M | -69.56M | 2.85M | EBITDA |
| 509.68M | 555.83M | 664.80M | 581.45M | 286.05M | 501.76M | Net Income Common Stockholders |
| -313.58M | -275.53M | -32.78M | -135.24M | -543.66M | -301.47M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 80.15M | 143.48M | 180.12M | 38.37M | 944.04M | 73.33M | Total Assets |
| 6.98B | 7.12B | 7.36B | 7.49B | 9.15B | 8.69B | Total Debt |
| 5.66B | 5.71B | 5.52B | 5.66B | 7.14B | 6.21B | Net Debt |
| 5.58B | 5.57B | 5.34B | 5.62B | 6.20B | 6.14B | 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
Positive
2.45
Price Trends
2.09
Positive
2.41
Positive
2.95
Negative
Market Momentum
0.08
Negative
64.59
Neutral
85.80
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 2.45 is above the 20-day moving average (MA) of 2.28, above the 50-day MA of 2.09, and below the 200-day MA of 2.95, indicating a neutral trend. The MACD of 0.08 indicates Negative momentum. The RSI at 64.59 is Neutral, neither overbought nor oversold. The STOCH value of 85.80 is Negative, 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 58 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 (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $359.05M | 127.26 | 1.42% | 4.91% | 1.75% | ― | |
70 Outperform | $1.24B | 55.89 | 1.83% | 4.47% | 3.57% | 12.66% | |
64 Neutral | $602.33M | 37.93 | 4.45% | 7.03% | -1.86% | ― | |
63 Neutral | $1.16B | ― | -0.33% | 0.41% | 2.18% | 56.00% | |
63 Neutral | $1.13B | 28.38 | 2.92% | 7.44% | 2.82% | -8.08% | |
61 Neutral | $2.86B | 10.96 | 0.41% | 6.08% | 5.73% | -21.25% | |
54 Neutral | $413.26M | ― | -33.91% | 1.61% | 0.78% | -128.16% |
* Real Estate Sector Average
Performance Comparison
SVC
Service Properties
2.45
-2.36
-49.06%
INN
Summit Hotel Properties
4.73
-0.89
-15.84%
PEB
Pebblebrook Hotel
9.59
-4.35
-31.21%
CLDT
Chatham Lodging
7.23
-0.91
-11.18%
RLJ
RLJ Lodging
7.33
-1.88
-20.41%
XHR
Xenia Hotels & Resorts
12.36
-1.65
-11.78%
Service Properties Corporate Events
Business Operations and StrategyFinancial Disclosures
Service Properties Trust Outlines Strategic Priorities in June 2025
Positive
Jun 2, 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.
Executive/Board ChangesM&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Service Properties Trust Announces Strategic Portfolio Optimization
Positive
Mar 12, 2025
On March 12, 2025, Service Properties Trust announced its strategic initiatives aimed at optimizing its portfolio and financial position. The company reported a 4.2% growth in comparable Hotel RevPAR in Q4 2024 and completed the sale of eight hotels and three net lease properties for $51.1 million. Service Properties Trust plans to sell an additional 115 hotels, expecting to generate approximately $1.1 billion in proceeds, which will be used to address its 2026 debt maturities. The company also completed renovations at 28 hotels and appointed Chris Bilotto as President and CEO.
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.