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Service Properties
(NASDAQ:SVC)
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Rating:47Neutral
Price Target:
$6.00
â–¼(-23.37% Downside)
Action:Reiterated
Date:10/20/26
SVC’s score is held down primarily by weak financial performance (declining revenue, sharply compressed margins, and sizable losses) and bearish technicals (price below key moving averages with negative MACD). The reaffirmed FFO guidance and reported operational/balance-sheet progress provide some support, while valuation is only mildly supportive due to a negative P/E despite a moderate dividend yield.
Positive Factors
Net-Lease Stability
High occupancy and contractual rent protections support recurring cash flow from the net-lease portfolio. Because most annualized base rent includes escalators or percentage-rent protections, this segment offers durable revenue visibility and some ability to offset operating cost inflation over the next several quarters.
Negative Factors
High Leverage
Historically high leverage and declining equity reduce balance-sheet flexibility and leave less capacity to absorb operating weakness. The capital structure can also constrain acquisitions, distributions, and refinancing options, making durable recovery in property-level earnings especially important.
Read all positive and negative factors
Positive Factors
Negative Factors
Net-Lease Stability
High occupancy and contractual rent protections support recurring cash flow from the net-lease portfolio. Because most annualized base rent includes escalators or percentage-rent protections, this segment offers durable revenue visibility and some ability to offset operating cost inflation over the next several quarters.
Read all positive factors
Service Properties (SVC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$796.48M
Dividend Yield3.25%
Average Volume (3M)2.33M
Price to Earnings (P/E)―
Beta (1Y)1.51
Revenue Growth-12.04%
EPS Growth-75.70%
CountryUS
EmployeesN/A
SectorReal Estate
Sector Strength53
IndustryREIT - Hotel & Motel
Share Statistics
EPS (TTM)-7.72
Shares Outstanding129,509,490
10 Day Avg. Volume4,050,884
30 Day Avg. Volume2,329,564
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 Cap5.98
Enterprise Value/Revenue2.87
Enterprise Value/Gross Profit12.35
Enterprise Value/Ebitda20.21
Forecast
1Y Price Target
$11.00Price Target Upside40.49% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)-2.46
Revenue Forecast (FY)$1.26B
Service Properties Business Overview & Revenue Model
Company Description
Service Properties Trust (SVC) operates as a Real Estate Investment Trust (REIT), maintaining a broad and varied collection of hotels alongside retail properties that provide essential services and necessities under net lease agreements. These hol...
How the Company Makes Money
SVC primarily makes money by collecting contractual rent and lease-related income from properties it owns. A major revenue stream comes from long-term net lease agreements (typically structured so the tenant is responsible for property operating c...
Service Properties Earnings Call Summary
Earnings Call Date:Aug 05, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call conveyed constructive operational momentum in the retained hotel portfolio (solid RevPAR growth, improving hotel EBITDA and preliminary July strength), steady net lease NOI and credit metrics, successful capital markets execution (equity raise and debt redemption) and early cost savings initiatives. These positives are offset by near-term transitional headwinds: renovation-related disruption (notably Nautilus), exit-asset negative EBITDA drag, elevated insurance and below-GOP cost pressures, and a near-term dip in normalized FFO (-4.5% YoY). Management emphasized a clear path to improved margins via asset sales, operational initiatives, and redeploying capital, and reaffirmed full-year guidance. Overall, the highlights—particularly balance sheet strengthening and core operating momentum—outweigh the lowlights, which are largely transitional.Positive Updates
RevPAR Outperformance and Growth
Retained hotel portfolio RevPAR increased 6.6% year-over-year (6.5% for 93 comparable hotels) and preliminary July retained portfolio RevPAR was +7.1% year-over-year. Excluding Nautilus short-term disruption, underlying RevPAR growth was ~9%.
Negative Updates
Normalized FFO Decline
Normalized FFO for Q2 was $55M, down $2.6M or 4.5% year-over-year, driven primarily by a ~$20M decline in hotel results (largely from disposition activity).
Read all updates
Q2-2026 Updates
Positive
Negative
RevPAR Outperformance and Growth
Retained hotel portfolio RevPAR increased 6.6% year-over-year (6.5% for 93 comparable hotels) and preliminary July retained portfolio RevPAR was +7.1% year-over-year. Excluding Nautilus short-term disruption, underlying RevPAR growth was ~9%.
Read all positive updates
Company Guidance
Management reaffirmed full‑year 2026 guidance, keeping normalized FFO at $124M–$144M (or $1.20–$1.35 per share on a 105M weighted average share count) and reiterating outlook for hotel EBITDA, net‑lease NOI and consolidated adjusted EBITDA (no reconciliations provided); the plan assumes midpoint operating expense of $360M and G&A of $40M, $25M of net‑lease capital recycling, total CapEx of $120M–$140M, and positive cash flow available for distribution for 2026 after producing $42.5M CAD in Q2, while noting the guidance excludes the impact of remaining Sonesta dispositions and benefits from recent balance‑sheet actions that generated roughly $30M of annual cash interest savings.Service Properties Financial Statement Overview
Summary
Income Statement
24
Negative
Balance Sheet
18
Very Negative
Cash Flow
46
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.66B | 1.81B | 1.90B | 1.87B | 1.86B | 1.50B |
| Gross Profit | 385.88M | 566.70M | 602.96M | 632.29M | 622.48M | 469.19M |
| EBITDA | 235.91M | 473.43M | 462.63M | 664.80M | 588.09M | 286.05M |
| Net Income | -422.74M | -202.32M | -275.53M | -32.78M | -132.38M | -544.60M |
Balance Sheet | ||||||
| Total Assets | 5.84B | 6.49B | 7.12B | 7.36B | 7.49B | 9.15B |
| Cash, Cash Equivalents and Short-Term Investments | 5.51M | 346.81M | 143.48M | 180.12M | 38.37M | 944.04M |
| Total Debt | 4.58B | 5.48B | 5.71B | 5.52B | 5.66B | 7.14B |
| Total Liabilities | 5.03B | 5.85B | 6.27B | 6.13B | 6.10B | 7.60B |
| Stockholders Equity | 806.46M | 646.12M | 851.87M | 1.23B | 1.39B | 1.56B |
Cash Flow | ||||||
| Free Cash Flow | -30.09M | 117.81M | 139.39M | 485.55M | 243.13M | 49.90M |
| Operating Cash Flow | 123.46M | 117.81M | 139.39M | 485.55M | 243.13M | 49.90M |
| Investing Cash Flow | 552.94M | 528.71M | -222.86M | -29.58M | 397.25M | -101.31M |
| Financing Cash Flow | -733.76M | -431.82M | 43.02M | -303.56M | -1.54B | 907.37M |
Service Properties Technical Analysis
Negative
7.83
Price Trends
6.85
Negative
7.56
Negative
8.32
Negative
Market Momentum
-0.21
Negative
45.08
Neutral
38.20
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SVC, the sentiment is Negative. The current price of 7.83 is above the 20-day moving average (MA) of 6.22, above the 50-day MA of 6.85, and below the 200-day MA of 8.32, indicating a bearish trend. The MACD of -0.21 indicates Negative momentum. The RSI at 45.08 is Neutral, neither overbought nor oversold. The STOCH value of 38.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 |
|---|---|---|---|---|---|---|---|
74 Outperform | $4.26B | 24.38 | 5.56% | 5.32% | 1.17% | -1.97% | |
68 Neutral | $653.32M | 118.40 | 1.64% | 2.78% | -3.14% | 197.81% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
64 Neutral | $833.20M | -30.03 | -0.84% | 4.64% | 1.24% | -143.19% | |
62 Neutral | $1.85B | 294.87 | 1.26% | 4.98% | 1.07% | -96.66% | |
60 Neutral | $1.80B | -260.83 | -0.62% | 2.87% | 1.65% | -112.43% | |
47 Neutral | $796.48M | -0.80 | -65.18% | 3.25% | -12.04% | -75.70% |
* Real Estate Sector Average
SVC
Service Properties
6.15
-5.01
-44.90%
INN
Summit Hotel Properties
6.90
1.87
37.04%
CLDT
Chatham Lodging
14.03
7.65
119.80%
RLJ
RLJ Lodging
12.06
5.45
82.53%
XHR
Xenia Hotels & Resorts
19.51
6.94
55.25%
APLE
Apple Hospitality REIT
18.04
7.15
65.60%
Service Properties Corporate Events
Business Operations and StrategyM&A Transactions
Service Properties Trust Completes Targeted Hotel Asset Sale
Positive
Oct 19, 2026
On October 15, 2026, Service Properties Trust completed the sale of three hotel properties for a total of $19.0 million, excluding closing costs, under a previously signed purchase and sale agreement. While the hotels represent a significant asset...
Business Operations and StrategyExecutive/Board ChangesRegulatory Filings and Compliance
Service Properties Trust Adds Experienced Independent Board Trustee
Positive
Sep 17, 2026
On September 15, 2026, Service Properties Trust appointed Jeanmarie Flaherty Cooney as an Independent Trustee, with her term running until the 2027 annual shareholders’ meeting. She will serve on the Audit, Compensation, and Nominating and G...
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.