Service Properties Trust (SVC)
NASDAQ:SVC
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Service Properties
(NASDAQ:SVC)
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Rating:48Neutral
Price Target:
$1.50
▲(4.17% Upside)
Action:Reiterated
Date:05/09/26
The score is held down primarily by weak financial performance—persistent net losses, very high leverage versus equity, and recently deteriorating free cash flow. Offsetting this, the latest earnings call emphasized significant balance-sheet strengthening, reduced maturities, interest savings, and raised normalized FFO guidance. Technicals remain a headwind with the stock still below key longer-term moving averages, while valuation is mixed given a negative P/E and only moderate yield.
Positive Factors
Balance-sheet strengthening
Large, completed capital markets actions materially lowered unsecured maturities and interest cost, producing durable liquidity and refinancing flexibility. That reduced interest expense and improved ratings, giving the company more runway to execute portfolio recycling and lower structural funding risk over the medium term.
Negative Factors
Very high leverage
Substantial leverage relative to a thin equity base leaves limited financial flexibility and heightens refinancing and interest-rate sensitivity. Even with recent debt reductions, elevated debt-to-equity and negative ROE constrain capital allocation and increase the company's vulnerability to weaker cash flow or credit market stress.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance-sheet strengthening
Large, completed capital markets actions materially lowered unsecured maturities and interest cost, producing durable liquidity and refinancing flexibility. That reduced interest expense and improved ratings, giving the company more runway to execute portfolio recycling and lower structural funding risk over the medium term.
Read all positive factors
Service Properties (SVC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.16B
Dividend Yield2.31%
Average Volume (3M)9.50M
Price to Earnings (P/E)―
Beta (1Y)1.15
Revenue Growth-8.19%
EPS Growth24.63%
CountryUS
EmployeesN/A
SectorReal Estate
Sector Strength53
IndustryREIT - Hotel & Motel
Share Statistics
EPS (TTM)-1.42
Shares Outstanding647,207,000
10 Day Avg. Volume8,957,672
30 Day Avg. Volume9,498,133
Financial Highlights & Ratios
PEG Ratio0.06
Price to Book (P/B)0.47
Price to Sales (P/S)0.17
P/FCF Ratio2.59
Enterprise Value/Market Cap4.61
Enterprise Value/Revenue3.08
Enterprise Value/Gross Profit13.26
Enterprise Value/Ebitda12.61
Forecast
1Y Price Target
$2.75Price Target Upside90.97% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)-0.75
Revenue Forecast (FY)$1.50B
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 bran...
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-part...
Service Properties Earnings Call Summary
Earnings Call Date:May 06, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 11, 2026
Earnings Call Sentiment Positive
The call conveyed meaningful progress on financial repositioning and long-term portfolio transformation, led by substantial capital markets activity (ABS, equity) that materially improved liquidity, reduced maturities and lowered interest expense. Operationally, the retained hotel portfolio showed healthy RevPAR and modest EBITDA growth, and the net lease portfolio maintained solid occupancy, coverage and long lease terms. Near-term results were weighed down by losses and capital needs tied to 15 marketed hotels, credit reserves for two franchisees, higher insurance costs and renovation-related displacement, which pressured Q1 normalized FFO and consolidated hotel EBITDA. Given the scale of balance sheet improvement, the upward revision to full-year normalized FFO guidance, and positive retained-portfolio trends that management expects to drive future margin flow-through, the positive strategic developments and financial repair outweigh the short-term operating headwinds.Positive Updates
Material Balance Sheet Strengthening via Capital Markets Activity
Executed roughly $1.5 billion of capital markets transactions (including a $745M ABS and a $575M underwritten equity offering), used proceeds and cash to retire about $1.6 billion of debt, resulting in annualized cash interest savings of approximately $59 million and reducing unsecured maturities until 2028.
Negative Updates
Quarterly Normalized FFO Decline
Normalized FFO for Q1 was $7.4 million, or $0.04 per share, down $0.03 per share year-over-year, primarily driven by a $7.2 million decline in hotel results and $2.2 million decline in net lease NOI due to credit loss reserves.
Read all updates
Q1-2026 Updates
Positive
Negative
Material Balance Sheet Strengthening via Capital Markets Activity
Executed roughly $1.5 billion of capital markets transactions (including a $745M ABS and a $575M underwritten equity offering), used proceeds and cash to retire about $1.6 billion of debt, resulting in annualized cash interest savings of approximately $59 million and reducing unsecured maturities until 2028.
Read all positive updates
Company Guidance
Service Properties Trust reaffirmed its full‑year outlook for hotel EBITDA, net‑lease NOI and consolidated adjusted EBITDAre and raised 2026 normalized FFO to $124 million–$144 million (or $0.24–$0.27 per share, assuming a 526 million weighted average share count); the guidance assumes midpoint interest expense of $360 million, G&A of $40 million and $25 million of net‑lease capital recycling, does not reflect the potential impact of completing any of the 15 Sonesta hotel dispositions, and management also reiterated total 2026 CapEx as stated on the call.Service Properties Financial Statement Overview
Summary
Income Statement
33
Negative
Balance Sheet
24
Negative
Cash Flow
41
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.74B | 1.81B | 1.90B | 1.87B | 1.86B | 1.50B |
| Gross Profit | 404.69M | 566.70M | 602.96M | 632.29M | 622.48M | 469.19M |
| EBITDA | 425.53M | 473.43M | 462.63M | 664.80M | 588.09M | 286.05M |
| Net Income | -237.06M | -202.32M | -275.53M | -32.78M | -132.38M | -544.60M |
Balance Sheet | ||||||
| Total Assets | 6.08B | 6.49B | 7.12B | 7.36B | 7.49B | 9.15B |
| Cash, Cash Equivalents and Short-Term Investments | 19.29M | 346.81M | 143.48M | 180.12M | 38.37M | 944.04M |
| Total Debt | 5.09B | 5.48B | 5.71B | 5.52B | 5.66B | 7.14B |
| Total Liabilities | 5.59B | 5.85B | 6.27B | 6.13B | 6.10B | 7.60B |
| Stockholders Equity | 493.74M | 646.12M | 851.87M | 1.23B | 1.39B | 1.56B |
Cash Flow | ||||||
| Free Cash Flow | 38.51M | 117.81M | 139.39M | 485.55M | 243.13M | 49.90M |
| Operating Cash Flow | 115.19M | 117.81M | 139.39M | 485.55M | 243.13M | 49.90M |
| Investing Cash Flow | 520.43M | 528.71M | -222.86M | -29.58M | 397.25M | -101.31M |
| Financing Cash Flow | -690.35M | -431.82M | 43.02M | -303.56M | -1.54B | 907.37M |
Service Properties Technical Analysis
Positive
1.44
Price Trends
1.57
Positive
1.85
Negative
2.04
Negative
Market Momentum
0.05
Negative
62.15
Neutral
78.57
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 1.44 is below the 20-day moving average (MA) of 1.65, below the 50-day MA of 1.57, and below the 200-day MA of 2.04, indicating a neutral trend. The MACD of 0.05 indicates Negative momentum. The RSI at 62.15 is Neutral, neither overbought nor oversold. The STOCH value of 78.57 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 61 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
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $515.36M | 55.64 | 1.24% | 5.00% | -7.39% | -69.66% | |
67 Neutral | $706.98M | -48.21 | -1.46% | 6.61% | 0.26% | -233.17% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
55 Neutral | $172.39M | -10.78 | -3.38% | 7.17% | -3.86% | -11.52% | |
48 Neutral | $1.16B | -1.26 | -38.18% | 2.31% | -8.19% | 24.63% | |
44 Neutral | $19.11M | -0.09 | 56.27% | ― | -4.46% | -34.66% |
* Real Estate Sector Average
SVC
Service Properties
1.79
-0.48
-21.32%
INN
Summit Hotel Properties
5.77
1.65
40.15%
CLDT
Chatham Lodging
10.85
4.08
60.27%
AHT
Ashford Hospitality
3.08
-2.58
-45.58%
BHR
Braemar Hotels & Resorts
2.46
0.26
12.02%
Service Properties Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Service Properties Announces Major Equity Offering and Note Redemption
Neutral
Apr 2, 2026
On March 31, 2026, Service Properties entered into an underwriting agreement with Yorkville Securities for a $500 million underwritten public offering of 416,666,667 common shares at $1.20 per share, with an option for underwriters to buy an addit...
Business Operations and StrategyPrivate Placements and Financing
Service Properties Announces Major ABS Issuance and Debt Redemption
Positive
Feb 23, 2026
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 spl...
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.