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BrightSpire Capital (BRSP)
NYSE:BRSP
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BrightSpire Capital
(NYSE:BRSP)
54Neutral
Positive Factors
Credit Quality
Credit quality is improving, with a decrease in the number of loans on the watch list and a decline in general CECL reserves.
Financial Performance
The company's shares are considered undervalued at current levels, providing a strong risk-reward potential.
Liquidity and Capital Deployment
The company has increased liquidity by 31% and maintains a strong cash position, supporting further stock repurchases and new originations.
Negative Factors
CECL Reserve Increase
GAAP earnings were negatively impacted by a $1M, or $0.01 per share, net increase to CECL reserves.
Impairment Charges
BrightSpire reported non-GAAP impairment charges associated with the accumulated depreciation related to nine legacy net lease properties in Norway.
Loan Downgrades
The company saw two loans downgraded in 4Q, including a Las Vegas multifamily asset loan and a Santa Clara land loan.
BrightSpire Capital (BRSP) vs. S&P 500 (SPY)
Market Cap
$682.32M
Dividend Yield13.57%
Average Volume (3M)881.49K
Price to Earnings (P/E)―
Beta (1Y)1.26
Revenue Growth-14.92%
EPS Growth-3.27%
CountryUS
Employees48
SectorReal Estate
Sector Strength76
IndustryREIT - Diversified
Share Statistics
EPS (TTM)-0.56
Shares Outstanding130,461,990
10 Day Avg. Volume575,177
30 Day Avg. Volume881,493
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap4.09
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit17.52
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$6.96Price Target Upside33.08% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
BrightSpire Capital Business Overview & Revenue Model
Company DescriptionBrightSpire Capital, Inc. operates as a commercial real estate (CRE) credit real estate investment trust in the United States. It focuses on originating, acquiring, financing, and managing a portfolio of CRE senior mortgage loans, mezzanine loans, preferred equity, debt securities, and net leased properties. The company qualifies as a real estate investment trust for federal income tax purposes. The company was formerly known as Colony Credit Real Estate, Inc. and changed its name to BrightSpire Capital, Inc. in June 2021. BrightSpire Capital, Inc. was incorporated in 2017 and is headquartered in New York, New York.
How the Company Makes MoneyBrightSpire Capital generates revenue primarily through the interest and fees collected from its real estate debt investments. The company's key revenue streams include income from senior mortgage loans, mezzanine loans, and preferred equity investments. Additionally, BrightSpire Capital profits from net lease real estate investments by collecting rental income from its properties. The company's earnings are significantly influenced by factors such as interest rate fluctuations, the performance of the commercial real estate market, and the creditworthiness of its borrowers. Strategic partnerships with financial institutions and real estate operators also play a crucial role in enhancing its deal flow and investment opportunities, thereby contributing to its revenue growth.
BrightSpire Capital Financial Statement Overview
Summary
BrightSpire Capital is facing profitability challenges with ongoing net losses despite stable cash flow generation. The high debt-to-equity ratio indicates significant leverage risks, although the equity base remains stable. Cash flow management is strong, but the company must address operational inefficiencies and leverage concerns.Income Statement
BrightSpire Capital has shown volatility in its revenue and profitability metrics over the years. The TTM data reveals a negative net profit margin and a declining revenue trend compared to prior periods. The gross profit margin is relatively stable, but the negative net income indicates challenges in cost management or other operational inefficiencies. Despite a positive gross profit margin, the consistent net losses underscore significant profitability issues.45
Neutral
Balance Sheet
The balance sheet shows a high debt-to-equity ratio, reflecting significant leverage, which can be risky if not managed well. However, the equity ratio remains reasonably stable, indicating a consistent proportion of equity financing. The return on equity is negative due to net losses, highlighting profitability challenges. Overall, while the company maintains a stable equity base, high leverage poses potential financial risks.52
Neutral
Cash Flow
Cash flow metrics indicate a robust operating cash flow relative to net income, suggesting effective cash management despite net losses. The free cash flow remains positive, which is a strength, indicating the company's ability to generate liquidity from operations. However, fluctuations in cash flow components and significant financing activities reflect operational adjustments and potential financial instability.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 347.22M | 392.11M | 358.54M | 323.09M | 424.35M | Gross Profit |
| 159.42M | 197.81M | 193.07M | 191.86M | 212.37M | EBIT |
| -51.81M | 0.00 | 77.92M | 169.13M | -109.11M | EBITDA |
| -66.81M | 35.91M | 112.52M | 205.63M | -49.35M | Net Income Common Stockholders |
| -131.98M | -15.55M | 45.79M | 26.53M | -240.41M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 302.17M | 257.51M | 306.32M | 259.72M | 485.21M | Total Assets |
| 3.72B | 4.20B | 4.75B | 5.64B | 6.21B | Total Debt |
| 2.52B | 2.74B | 3.19B | 3.97B | 4.10B | Net Debt |
| 2.21B | 2.48B | 2.88B | 3.71B | 3.63B | Total Liabilities |
| 2.68B | 2.92B | 3.36B | 4.15B | 4.25B | Stockholders Equity |
| 1.05B | 1.28B | 1.39B | 1.46B | 1.67B |
| Cash Flow | Free Cash Flow | |||
| 103.41M | 137.62M | 121.31M | -31.19M | 73.15M | Operating Cash Flow |
| 103.41M | 137.62M | 125.28M | -21.27M | 96.36M | Investing Cash Flow |
| 313.08M | 384.16M | 89.34M | -555.79M | 1.00B | Financing Cash Flow |
| -327.95M | -558.60M | -161.45M | 384.36M | -754.06M |
BrightSpire Capital Technical Analysis
Neutral
5.23
Price Trends
5.35
Negative
5.49
Negative
5.47
Negative
Market Momentum
-0.07
Negative
59.24
Neutral
92.05
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BRSP, the sentiment is Neutral. The current price of 5.23 is above the 20-day moving average (MA) of 4.70, below the 50-day MA of 5.35, and below the 200-day MA of 5.47, indicating a neutral trend. The MACD of -0.07 indicates Negative momentum. The RSI at 59.24 is Neutral, neither overbought nor oversold. The STOCH value of 92.05 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for BRSP.
BrightSpire Capital Risk Analysis
BrightSpire Capital disclosed 64 risk factors in its most recent earnings report. BrightSpire Capital 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
BrightSpire Capital Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
66 Neutral | $655.10M | 53.74 | 7.10% | 8.44% | 1.22% | ― | |
66 Neutral | $702.77M | 29.05 | 5.73% | 10.91% | 6.17% | ― | |
63 Neutral | $597.44M | 36.87 | -1.05% | 8.38% | 14.11% | -667.02% | |
63 Neutral | $530.61M | 17.50 | 9.80% | 7.41% | -0.09% | 1.93% | |
60 Neutral | $2.79B | 11.37 | 0.20% | 8519.74% | 6.07% | -14.95% | |
58 Neutral | $423.13M | ― | -0.95% | 7.82% | -10.31% | 98.15% | |
54 Neutral | $682.32M | ― | -6.29% | 13.57% | -14.92% | -3.27% |
* Real Estate Sector Average
Performance Comparison
BRSP
BrightSpire Capital
5.23
-0.21
-3.86%
CTO
CTO Realty Growth
18.14
2.49
15.91%
GOOD
Gladstone Commercial
14.22
1.65
13.13%
OLP
One Liberty Properties
24.58
2.69
12.29%
AHH
Armada Hoffler Properties
6.92
-3.30
-32.29%
PKST
Peakstone Realty Trust
11.51
-1.74
-13.13%
BrightSpire Capital Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q1-2025)
| % Change Since: 3.56%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call presents a mixed outlook with strong liquidity and progress in portfolio management as positive highlights. However, ongoing market volatility, challenges in loan origination, and valuation decline present significant concerns. The company's efforts to maintain its dividend and manage its portfolio are promising, but the macroeconomic environment poses risks.Q1-2025 Updates
Positive Updates
Strong Liquidity Position
The company reported current liquidity of $310 million, with $145 million in unrestricted cash and $56 million in approved but undrawn borrowings available on warehouse lines.
Positive Loan Inquiries and Pipeline
Despite market volatility, the company has seen a considerable increase in loan inquiries and is actively evaluating and quoting new loans daily.
Progress in Portfolio Management
For the first time since 2022, year-to-date deployments have outpaced repayments, CECL levels have remained stable, and watch list exposure has been reduced.
Successful REO Asset Sales
The company is in the final stages of exiting its Phoenix multifamily property and has sold one REO office property for $5 million, with strong interest in remaining REO multifamily properties.
Share Repurchase Program
The company repurchased approximately 200,000 shares at an average price of $5.59 and is trading at a 45% discount to its undepreciated book value.
Negative Updates
Market Volatility and Spread Widening
The market has experienced tremendous volatility due to ongoing tariff discussions, leading to wider credit spreads and uncertainties in the commercial real estate market.
Challenges in Loan Origination
Many borrowers are seeking equity-neutral transactions, posing challenges for refinancing, and transaction volume remains below historic levels.
Valuation Decline
Since the start of April, the mortgage REIT sector has experienced a significant decline in valuation.
Watch List and Default Issues
San Jose hotel loan remains in default, and the total watch list loan exposure stands at $396 million, accounting for 16% of the loan portfolio.
Slight Decrease in Book Value
Quarter-over-quarter, total company GAAP net book value decreased from $8.08 to $7.92 per share.
Company Guidance
During the BrightSpire Capital Inc. First Quarter 2025 earnings call, the company provided guidance on various financial metrics and market conditions. The company reported first-quarter GAAP net income attributable to common stockholders of $5.3 million, or $0.04 per share, as well as adjusted distributable earnings of $20.1 million, or $0.16 per share. They highlighted their current liquidity at $310 million, with $145 million in unrestricted cash and approximately $56 million in approved but undrawn borrowings. The GAAP net book value was reported at $7.92 per share, while the undepreciated book value stood at $8.75 per share as of March 31, 2025. Management noted an increase in loan inquiries and a pickup in investment sales, despite transaction volumes being below historic levels. They also emphasized the importance of growing the loan portfolio to $3.5 billion to sustain and potentially grow the dividend, with a current target to reach a leverage level of approximately 3.3 times. Additionally, they discussed the impact of lower interest rates and market volatility on their strategies and expressed optimism about the ongoing improvement of their balance sheet and maintaining their dividend.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.