Franklin Street Properties (FSP) AI Stock Analysis

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Franklin Street Properties

(NYSE MKT:FSP)

52Neutral

Franklin Street Properties faces significant challenges with profitability and revenue growth, impacting its financial performance score negatively. Technically, the stock is on a bearish trend, aligning with the financial struggles. Valuation is unfavorable due to negative earnings, while the earnings call provides a slight positive with debt reduction and a prospective tenant pipeline. Overall, the stock is currently under pressure from multiple fronts, which is reflected in the score.

Franklin Street Properties (FSP) vs. S&P 500 (SPY)

Market Cap

$155.35M

Dividend Yield2.67%

Average Volume (3M)380.06K

Price to Earnings (P/E)―

Beta (1Y)0.94

Revenue Growth-18.97%

EPS Growth-14.57%

CountryUS

Employees28

SectorReal Estate

Sector Strength66

IndustryREIT - Office

Share Statistics

EPS (TTM)-0.21

Shares Outstanding103,566,710

10 Day Avg. Volume233,010

30 Day Avg. Volume380,058

Financial Highlights & Ratios

PEG Ratio0.09

Price to Book (P/B)0.25

Price to Sales (P/S)0.00

P/FCF Ratio-15.36

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusHold

Number of Analyst Covering1

Franklin Street Properties Business Overview & Revenue Model

Company DescriptionFranklin Street Properties Corp., based in Wakefield, Massachusetts, is focused on infill and central business district (CBD) office properties in the U.S. Sunbelt and Mountain West, as well as select opportunistic markets. FSP seeks value-oriented investments with an eye towards long-term growth and appreciation, as well as current income. FSP is a Maryland corporation that operates in a manner intended to qualify as a real estate investment trust (REIT) for federal income tax purposes.

How the Company Makes MoneyFranklin Street Properties makes money primarily through the acquisition, ownership, and management of office properties. The company's revenue model is centered on generating rental income from its portfolio of office buildings. By leasing office space to a variety of tenants, FSP secures consistent rental revenues. Additionally, FSP may engage in property sales, where strategic dispositions of certain assets can provide capital appreciation and additional income. The company's earnings are also influenced by its ability to maintain high occupancy rates and manage operational efficiencies within its properties. FSP may leverage strategic partnerships or joint ventures to enhance its property portfolio and optimize returns on investment.

Franklin Street Properties Financial Statement Overview

Summary

Franklin Street Properties is experiencing significant challenges with profitability and revenue growth, as seen in the income statement. The balance sheet shows a focus on reducing debt, while cash flow stability offers some hope. Overall, the company faces hurdles in achieving financial stability and growth.

Income Statement

Neutral

The income statement shows a declining trend in revenue with a significant decrease from previous years. Gross profit margins have deteriorated, and net profit margins are negative, indicating struggles with profitability. The EBIT and EBITDA margins are also negative for the most recent period, reflecting operational inefficiencies and challenges in maintaining profitability.

Balance Sheet

Neutral

The balance sheet reveals a relatively stable stockholders' equity, although total debt levels have decreased, suggesting a focus on deleveraging. However, the equity ratio indicates a moderate reliance on equity financing, and the return on equity is negative due to net losses, highlighting profitability issues.

Cash Flow

Positive

Cash flow analysis shows a positive trend in operating cash flow, although free cash flow remains volatile and has improved slightly in the latest period. The company has managed to maintain operating cash flow even in times of net income losses, indicating some level of operational resilience.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
115.99M	120.11M	145.71M	165.62M	209.36M	245.85M
	Gross Profit
38.24M	52.35M	67.78M	78.17M	107.42M	130.52M
	EBIT
-7.46M	-6.30M	-984.00K	482.00K	12.97M	26.96M
	EBITDA
30.19M	21.64M	57.93M	66.06M	93.98M	118.23M
	Net Income Common Stockholders
-66.61M	-52.72M	-48.11M	1.09M	92.72M	32.62M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
37.78M	41.12M	125.53M	6.63M	40.75M	2.65M
	Total Assets
1.04B	946.93M	1.17B	1.24B	1.36B	1.79B
	Total Debt
297.54M	247.63M	404.71M	413.01M	474.79M	921.54M
	Net Debt
259.76M	206.51M	279.18M	406.38M	434.04M	918.89M
	Total Liabilities
335.10M	291.07M	456.52M	472.93M	580.97M	1.03B
	Stockholders Equity
703.86M	655.86M	712.80M	768.74M	783.20M	768.09M
Cash Flow		Free Cash Flow
-10.31M	-16.23M	-13.77M	-39.68M	-28.47M	-9.47M
	Operating Cash Flow
10.59M	8.99M	17.87M	15.23M	36.36M	68.45M
	Investing Cash Flow
40.26M	70.28M	113.64M	74.04M	505.47M	11.04M
	Financing Cash Flow
-57.07M	-164.47M	-10.25M	-123.39M	-505.24M	-85.13M

Franklin Street Properties Technical Analysis

Technical Analysis Sentiment

Negative

Last Price1.46

Price Trends

50DMA

1.65

Negative

100DMA

1.75

Negative

200DMA

1.74

Negative

Market Momentum

MACD

-0.04

Negative

RSI

37.98

Neutral

STOCH

16.02

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FSP, the sentiment is Negative. The current price of 1.46 is below the 20-day moving average (MA) of 1.53, below the 50-day MA of 1.65, and below the 200-day MA of 1.74, indicating a bearish trend. The MACD of -0.04 indicates Negative momentum. The RSI at 37.98 is Neutral, neither overbought nor oversold. The STOCH value of 16.02 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FSP.

Franklin Street Properties Risk Analysis

Franklin Street Properties disclosed 32 risk factors in its most recent earnings report. Franklin Street 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

Franklin Street Properties Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CIO	63 Neutral	$199.37M	―	-2.51%	8.10%	-4.92%	-128.59%
BDN	61 Neutral	$737.23M	―	-18.11%	14.12%	-2.22%	1.51%
Sector *	60 Neutral	$2.83B	10.92	0.21%	8543.15%	5.98%	-17.76%
FSP	52 Neutral	$155.35M	―	-9.96%	2.67%	-18.97%	-14.57%
ONL	51 Neutral	$119.69M	―	-10.71%	15.02%	-18.92%	-15.81%
PDM	48 Neutral	$869.61M	―	-3.79%	7.15%	-6.23%	18.07%
OPI	42 Neutral	$19.51M	―	-15.03%	14.53%	-11.91%	-80.43%

* Real Estate Sector Average

Performance Comparison

FSP

Franklin Street Properties

1.46

-0.44

-23.16%

PDM

Piedmont Office

6.89

0.10

1.47%

BDN

Brandywine Realty

4.24

-0.08

-1.85%

OPI

Office Properties Income

0.27

-2.18

-88.98%

CIO

City Office REIT

4.91

0.26

5.59%

ONL

Orion Office REIT

2.16

-1.23

-36.28%

Franklin Street Properties Earnings Call Summary

Earnings Call Date:Apr 29, 2025

(Q1-2025)

% Change Since: -5.81%|

Next Earnings Date:Aug 05, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted significant reduction in corporate debt and a growing pipeline of prospective tenants. However, challenges persist with a decline in leasing activity, lower occupancy rates, and a reported net loss.

Q1-2025 Updates

Positive Updates

Significant Reduction in Corporate Indebtedness

Since late 2020, Franklin Street Properties has completed approximately $1.1 billion in property sales, contributing to a nearly 75% reduction in corporate indebtedness, enhancing financial flexibility.

Growth in National Office Transaction Volumes

National office transaction volumes rose by 22% in 2024 from the cyclical lows of 2023 and accelerated in the first quarter of 2025, finishing 31% higher year-over-year, indicating signs of stabilization.

Prospective Tenant Pipeline

FSP is tracking approximately 800,000 square feet of prospective new tenants, including 300,000 square feet of prospects on their shortlists, indicating potential for future leasing growth.

Negative Updates

Leasing Challenges and Lower Occupancy

The directly owned portfolio was approximately 69.2% leased at the end of the first quarter, down from 70.3% at the end of the fourth quarter. Economic occupancy also decreased due to lease expirations and departures.

Disappointing First Quarter Leasing Activity

FSP finalized only 60,000 square feet of leasing in the first quarter, comprised entirely of renewals and expansions, with no new leases executed.

GAAP Net Loss

Reported a GAAP net loss of approximately $21.4 million or $0.21 per share for the first quarter of 2025.

Company Guidance

In the first quarter of 2025, Franklin Street Properties Corp. reported funds from operations (FFO) of approximately $2.7 million, equating to $0.03 per share, and a GAAP net loss of about $21.4 million, or $0.21 per share. The company's directly owned portfolio was 69.2% leased, down from 70.3% at the end of the previous quarter, with economic occupancy at 67.7%. The quarter saw 60,000 square feet of leasing activity, all from renewals and expansions, with a forecast of continued instability in leasing activities throughout the year. The company is tracking approximately 800,000 square feet of prospective new tenants and 400,000 square feet in potential renewals. Scheduled lease expirations for 2025 total approximately 246,000 square feet, representing 5.1% of the directly owned portfolio. Franklin Street continues its disposition strategy, having sold $1.1 billion in properties since late 2020, reducing corporate debt by nearly 75%. The office market shows signs of stabilization, with national transaction volumes rising by 31% year-over-year in Q1 2025, although investment liquidity remains constrained.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.