One-glance verdict
Within fair range
$19.14 our estimate vs market $6.74
Wall Street consensus: $12.19 (-36.3% lower than our fair-value estimate)
65% below our estimate
Fundamentals snapshot
Service Properties Trust
SVC · NMS · Real Estate · REIT - Hotel & Motel
Current price
$6.74
52-week range
$5.65 - $14.50
Market cap
$872.89M
Balance sheet
Distressed
0.57x Concerning
Net debt $4.57B. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
2 Risks
2 rewards · 2 risks
- Reward Free cash flow was positive in 6/10 years.
- Reward Dividend yield is 3.0% with 32-year payout history.
- Risk Return on equity was -56.3% last year — the company lost money on shareholders' equity.
- Risk Insider ownership is only 0.6% (peer median: 2.7%).
What this company does
Service Properties Trust
Service Properties Trust owns a large portfolio of hotels and service-focused retail properties, like convenience stores and restaurants, across the US and Canada. The company acts like a commercial landlord, making its money by collecting rent from the businesses that operate out of its buildings. This means its financial health is closely tied to people traveling for work or leisure and spending money at everyday service locations.
How the company got here
Service Properties Trust started in 1995, originally named Hospitality Properties Trust and focused only on hotels. A major turning point came in 2019 when it bought a large number of retail properties and changed its name to reflect this new, dual focus. The COVID-19 pandemic hit the hotel business hard, leading the company to shift many of its properties to the Sonesta hotel brand, in which it owns a large stake. More recently, the company has been selling off many of its hotels to pay down debt and simplify its business.
What it actually does
Service Properties Trust is a Real Estate Investment Trust (REIT), which is a type of company that owns and collects rent from a portfolio of properties. Think of it like a landlord for big businesses. It owns two main types of properties across the United States, Canada, and Puerto Rico: hotels and standalone retail buildings. Instead of managing these properties itself, it hires an outside firm, The RMR Group, to handle the day-to-day operations.
Hotel Investments
This part of the business owns the physical hotel buildings and the land they sit on, featuring brands like Sonesta, Hyatt, and Radisson. While this segment brings in the majority of the company's total sales, it also comes with very high costs for operations, maintenance, and renovations, making it less profitable. The company collects money from room bookings, food and beverage sales, and other hotel services. This is the larger part of the company by total sales, but it contributes a much smaller slice of the actual profit.
Net Lease Investments
This segment owns service-oriented retail properties, such as convenience stores, quick-service restaurants, and automotive service centers. These properties are rented out on what's called a 'net lease,' where the tenant (the business operating there, like TravelCenters of America) pays for most of the building's expenses like taxes, insurance, and maintenance. This creates a very steady and predictable stream of rental income for the company. While this segment reports lower overall revenue (the total money coming in), it is responsible for the vast majority of the company's profits because the costs are so much lower.
What management is betting on now
Management is currently making a big strategic shift to focus more on its profitable net lease retail business and shrink its hotel portfolio. The main priority is to sell off dozens of its hotels to raise cash. This cash is being used to strengthen the company's financial health by paying down a significant amount of its debt (a process called deleveraging). The goal is to make the company's earnings more stable and predictable by relying more on the steady rental income from its retail tenants rather than the more volatile hotel business.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$24.15M
FY2024 Q4
$-88.87M
FY2025 Q1
$-23.23M
FY2025 Q2
$-46.57M
FY2025 Q3
$57.95M
FY2025 Q4
$-95.18M
FY2026 Q1
$-14.31M
FY2026 Q2
$-18.71M
Revenue
$420.97M
Net income
$-223.84M
Diluted EPS
-1.75
Operating cash flow
$8.26M
Free cash flow
$-18.71M
Fetching…
Sources
Revenue
$364.45M
Net income
$-151.18M
Diluted EPS
-0.91
Operating cash flow
$35.58M
Free cash flow
$-14.31M
Fetching…
Sources
Revenue
$397.45M
Net income
$-782.00K
Diluted EPS
-0.01
Operating cash flow
$-18.50M
Free cash flow
$-95.18M
Fetching…
Sources
Revenue
$478.77M
Net income
$-46.95M
Diluted EPS
-0.28
Operating cash flow
$98.11M
Free cash flow
$57.95M
Fetching…
Sources
Revenue
$503.44M
Net income
$-38.16M
Diluted EPS
-0.23
Operating cash flow
$-7.00K
Free cash flow
$-46.57M
Fetching…
Sources
Revenue
$435.18M
Net income
$-116.44M
Diluted EPS
-0.70
Operating cash flow
$38.20M
Free cash flow
$-23.23M
Fetching…
Sources
Revenue
$456.56M
Net income
$-76.39M
Diluted EPS
-0.46
Operating cash flow
$-9.65M
Free cash flow
$-88.87M
Fetching…
Sources
Revenue
$491.17M
Net income
$-46.90M
Diluted EPS
-0.28
Operating cash flow
$106.15M
Free cash flow
$24.15M
Fetching…
Sources
Is it cheap or expensive?
Fair value $19.14 vs current price $6.74
Wall Street consensus is the average analyst price target: $12.19 (-36.3% lower than our fair-value estimate).
Our most-likely fair value is $19.14 a share — about 183.9% away from today's price of $6.74, so the stock currently looks fairly priced.
Is it drowning in debt?
Distressed
Net debt $4.6B. Interest coverage 0.6x.
Net debt
$4.57B
Interest coverage
0.57x
Service Properties Trust's profit covers its interest bill about 0.6 times over. which is weaker than most peers shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
SVC
BASELINE
Service Properties Trust
Total debt $4.58B Interest coverage 0.57x This is the baseline the peer rows are being compared against.
Total debt $1.40B Interest coverage 0.76x +31% vs SVC Carries about 1.3x more debt cushion than SVC.
Total debt $434.05M Interest coverage 1.10x +91% vs SVC Carries about 1.9x more debt cushion than SVC.
Total debt $2.81B Interest coverage 1.21x +111% vs SVC Carries about 2.1x more debt cushion than SVC.
Total debt $2.46B Interest coverage 0.74x +29% vs SVC Carries about 1.3x more debt cushion than SVC.
Total debt $1.20B Interest coverage 2.66x +363% vs SVC Carries about 4.6x more debt cushion than SVC.
What you should know
The case for and against SVC
2 Rewards
2 Risks
Rewards
-
Free cash flow was positive in 6/10 years.
-
Dividend yield is 3.0% with 32-year payout history.
Risks
-
Return on equity was -56.3% last year — the company lost money on shareholders' equity.
-
Insider ownership is only 0.6% (peer median: 2.7%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
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Forward P/E
-6.07x
P/B
1.08x
P/S
0.53x
EV/EBITDA
11.31x
PEG ratio
2.27x
Profitability
How much profit each dollar creates
Gross margin
31.4%
Operating margin
14.6%
Net margin
-25.4%
ROE
-56.3%
ROA
1.7%
Health
Liquidity and balance-sheet strength
Debt / equity
5.68x
Current ratio
0.88x
Quick ratio
0.46x
Total debt
$4.58B
Total cash
$5.51M
Growth
How the business has been compounding
Revenue TTM
$1.66B
Revenue 5Y CAGR
5.0%
EPS TTM
-24.58
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$123.46M
Free CF TTM
$-107.03M
FCF margin
-6.4%
Dividend
Shareholder payout
Yield
3.0%
Payout ratio
466.7%
Last ex-div date
2026-07-20