Office Properties Income (OPI) AI Stock Analysis

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Office Properties Income

(NASDAQ:OPI)

Rating:44Neutral

Price Target:

$0.00

▼(-100.00%Downside)

Office Properties Income's overall stock score is primarily impacted by its weak financial performance and bearish technical indicators. The company's financial difficulties, including declining revenues and high leverage, are critical concerns. Negative market momentum and unsustainable valuation metrics further weigh down the score. Positive leasing achievements and sustainability efforts provide some support but are not enough to offset the significant financial and market challenges.

Office Properties Income (OPI) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$13.43M

Dividend Yield20.64%

Average Volume (3M)998.06K

Price to Earnings (P/E)―

Beta (1Y)1.45

Revenue Growth-11.91%

EPS Growth-80.43%

CountryUS

EmployeesN/A

SectorReal Estate

Sector Strength63

IndustryREIT - Office

Share Statistics

EPS (TTM)-0.59

Shares Outstanding70,894,950

10 Day Avg. Volume1,529,156

30 Day Avg. Volume998,063

Financial Highlights & Ratios

PEG Ratio<0.01

Price to Book (P/B)0.02

Price to Sales (P/S)0.00

P/FCF Ratio0.37

Enterprise Value/Market Cap173.12

Enterprise Value/Revenue1.15

Enterprise Value/Gross Profit6.52

Enterprise Value/Ebitda2.94

Forecast

1Y Price Target

$0.75

Price Target Upside275.00% Upside

Rating ConsensusModerate Sell

Number of Analyst Covering0

Office Properties Income Business Overview & Revenue Model

Company DescriptionOPI is a REIT focused on owning, operating and leasing properties primarily leased to single tenants and those with high credit quality characteristics such as government entities. OPI is managed by the operating subsidiary of The RMR Group Inc. (Nasdaq: RMR), an alternative asset management company that is headquartered in Newton, Massachusetts.

How the Company Makes MoneyOPI generates revenue primarily through leasing office spaces to tenants, which include government entities, professional service firms, and other corporate clients. The company earns income from long-term lease agreements, providing stable and predictable cash flows. Additionally, OPI may engage in property acquisitions and dispositions, strategically optimizing its portfolio to enhance returns. OPI's revenue is also influenced by factors such as property occupancy rates, rental rates, and lease renewals. The company may benefit from strategic partnerships with property management firms and real estate brokers to maximize property value and tenant retention.

Office Properties Income Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q1-2025)

% Change Since: -51.22%|

Next Earnings Date:Jul 24, 2025

Earnings Call Sentiment Negative

The earnings call highlighted some positive leasing achievements and commitments to sustainability. However, these are overshadowed by significant financial challenges, including a sharp decline in revenue, increased interest expenses, and liquidity constraints. The overall sentiment reflects a company struggling with a difficult market environment and financial pressures.

Q1-2025 Updates

Positive Updates

Leasing Achievements

Executed 11 leases totaling 223,000 square feet with a weighted average lease term of 10.3 years and a 13.5% roll up in rent.

Sustainability Commitment

Highlighted the publication of the Aramark Group's Annual Sustainability Report, showing commitment to corporate sustainability practices.

Negative Updates

Revenue Decline

Annualized revenue was down $93 million or 19% to $405 million compared to a year ago.

Increased Interest Expense

Interest expense increased $17.9 million to $53.4 million, representing a 50% increase year-over-year.

Liquidity and Debt Challenges

Limited liquidity with $73 million of cash, restricted by debt covenants, and upcoming $280 million in debt principal payments due in 2026.

Negative Net Absorption and Declining Rents

Experienced negative net absorption and declining asking rents due to minimal leasing interest and heightened competition, especially in Washington DC.

Normalized FFO Decrease

Normalized FFO of $4.4 million or $0.06 per share, below guidance and down from $20.9 million or $0.36 per share in the previous quarter.

Company Guidance

During the Office Properties Income Trust's First Quarter 2025 Earnings Conference Call, key guidance metrics were discussed. The company anticipates normalized Funds From Operations (FFO) for the second quarter to range between $0.09 and $0.11 per share, up from the first quarter's $0.06 per share. This increase is attributed to higher net operating income (NOI) driven by lower seasonal operating expenses and stronger performance from their Washington D.C. hotel. For recurring general and administrative expenses, a forecast of $5 million for Q2 was given. Additionally, they project a same property cash basis NOI decrease of 10% to 12% compared to the second quarter of 2024, largely due to tenant vacancies and increased free rent. Capital expenditures for 2025 have been revised down from $80 million to approximately $75 million. The company is facing liquidity constraints with $73 million in cash and is evaluating options to address upcoming maturities, including $120 million due in March 2026 and $134 million due in June 2026.

Office Properties Income Financial Statement Overview

Summary

Office Properties Income shows several financial challenges, including declining revenues, persistent net losses, and high leverage. The company's cash flow generation is weak, and the balance sheet is under pressure from high debt levels. Despite some stability in EBITDA margins, the overall financial health indicates a need for strategic improvements to enhance profitability and reduce financial risk.

Income Statement

Neutral

The company has seen a consistent decline in revenue over the years, with a drop from $587.9M in 2020 to $476.2M in the TTM period. Gross profit margins have decreased from 88.9% in 2020 to 74.9% in TTM. Additionally, the company has reported net losses across all periods, with net profit margins deteriorating substantially. Despite a relatively stable EBITDA margin, the declining revenue and persistent net losses are concerning trends.

Balance Sheet

Neutral

The debt-to-equity ratio is relatively high, indicating significant leverage, which is typical for the REIT industry but poses risks. The equity ratio has decreased over time, suggesting a declining proportion of equity financing. Return on equity is negative due to consistent net losses. The company’s financial stability is challenged by high debt levels and declining equity percentage.

Cash Flow

Negative

Operating cash flow has decreased significantly from $233.6M in 2020 to $11.9M in TTM, which is concerning. Free cash flow has also shown volatility, with a decrease from $151.9M in 2020 to $51.9M in the TTM period. The operating cash flow to net income ratio is positive but reflects low efficiency due to negative net income. Overall, cash flow generation appears weak and inconsistent.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
476.16M	501.98M	533.55M	554.27M	576.48M	587.92M
	Gross Profit
356.58M	439.61M	360.84M	496.43M	504.51M	522.80M
	EBIT
69.21M	88.88M	334.06M	111.58M	105.09M	112.72M
	EBITDA
99.82M	285.62M	302.34M	334.14M	348.45M	368.12M
	Net Income Common Stockholders
-176.79M	-136.11M	-69.43M	-2.60M	-5.68M	6.68M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
63.74M	261.32M	12.31M	12.25M	83.03M	42.05M
	Total Assets
3.57B	3.82B	3.99B	3.98B	4.24B	3.95B
	Total Debt
2.37B	2.54B	2.58B	2.45B	2.59B	2.21B
	Net Debt
2.31B	2.28B	2.57B	2.43B	2.51B	2.17B
	Total Liabilities
2.46B	2.67B	2.73B	2.59B	2.74B	2.34B
	Stockholders Equity
1.11B	1.15B	1.26B	1.39B	1.50B	1.61B
Cash Flow		Free Cash Flow
51.98M	67.17M	141.73M	-11.49M	121.35M	151.87M
	Operating Cash Flow
11.95M	67.17M	141.73M	192.61M	221.49M	233.63M
	Investing Cash Flow
86.01M	66.61M	-194.82M	-4.62M	-442.99M	-22.99M
	Financing Cash Flow
-65.41M	114.67M	67.56M	-260.26M	249.15M	-254.48M

Office Properties Income Technical Analysis

Technical Analysis Sentiment

Negative

Last Price0.20

Price Trends

50DMA

0.32

Negative

100DMA

0.58

Negative

200DMA

1.11

Negative

Market Momentum

MACD

-0.04

Negative

RSI

32.78

Neutral

STOCH

39.41

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OPI, the sentiment is Negative. The current price of 0.2 is below the 20-day moving average (MA) of 0.22, below the 50-day MA of 0.32, and below the 200-day MA of 1.11, indicating a bearish trend. The MACD of -0.04 indicates Negative momentum. The RSI at 32.78 is Neutral, neither overbought nor oversold. The STOCH value of 39.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OPI.

Office Properties Income Risk Analysis

Office Properties Income disclosed 52 risk factors in its most recent earnings report. Office Properties Income 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 3 New Risks

We have concluded that there is substantial doubt about our ability to continue as a going concern. Q4, 2024

RMR is incorporating artificial intelligence into some of its business workflows and processes, and challenges with properly managing its use could result in reputational harm, competitive harm, legal liability, and increased regulatory costs and could adversely affect our results of operations. Q4, 2024

If arrangements involving one of our TRSs fail to comply as intended with the REIT qualification and taxation rules, we may fail to qualify for taxation as a REIT under the IRC or be subject to significant penalty taxes. Q4, 2024

Office Properties Income Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$2.82B	10.84	0.42%	8439.00%	5.74%	-20.95%
CIO	57 Neutral	$200.18M	―	-2.51%	8.06%	-4.92%	-128.59%
FSP	56 Neutral	$182.28M	―	-9.96%	2.23%	-18.97%	-14.57%
PDM	52 Neutral	$919.38M	―	-3.79%	6.77%	-6.23%	18.07%
ONL	49 Neutral	$113.51M	―	-10.71%	15.84%	-18.92%	-15.81%
OPI	44 Neutral	$13.43M	―	-15.03%	20.64%	-11.91%	-80.43%
NYC	32 Underperform	$23.57M	―	-96.16%	―	-6.36%	-26.04%

* Real Estate Sector Average

Performance Comparison

OPI

Office Properties Income

0.20

-1.92

-90.57%

FSP

Franklin Street Properties

1.76

0.01

0.57%

PDM

Piedmont Office

7.39

0.44

6.33%

CIO

City Office REIT

4.98

0.40

8.73%

NYC

New York City REIT

9.67

0.45

4.88%

ONL

Orion Office REIT

2.07

-1.18

-36.31%

Office Properties Income Corporate Events

Private Placements and FinancingBusiness Operations and Strategy

Office Properties Income Trust’s Note Exchange Discussions

Neutral

Apr 1, 2025

Office Properties Income Trust engaged in confidential discussions with certain parties regarding a proposed transaction involving the exchange of its outstanding senior unsecured notes for new notes with similar terms to its 8.000% Senior Priority Guaranteed Unsecured Notes due 2029. However, the parties could not reach an agreement on the rate, scope of unsecured guarantees, covenants, and other terms. This disclosure was made to satisfy public disclosure obligations under confidentiality agreements, but the information should not be considered a reliable prediction of future events.

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.