Seven Hills Realty Trust (NasdaqCM:SEVN) - Share price, News & Analysis

Q: What is the Fair Price of SEVN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

SEVN ($9.22) is trading below our estimate of [[fair value]] ($31.78)

SEVN fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	0/6
Past Performance	2/6
Financial Health	2/6
Dividends	3/6

SEVN Stock Overview

Rewards

Trading at 71% below our estimate of its fair value

Became profitable this year

Trading at good value vs. peer average Price-To-Earnings ratio

Trading at good value vs. industry average Price-To-Earnings ratio

Trading below our calculated fair Price-To-Earnings ratio

Risk Analysis

Earnings are forecast to decline by an average of 25% per year for the next 3 years

Debt is not well covered by operating cash flow

Dividend of 10.85% is not well covered

Less than 3 years of financial data is available

+ 1 more risk

Seven Hills Realty Trust Competitors

Sachem Capital

NYSEAM:SACH

US$126.8m

Cherry Hill Mortgage Investment

NYSE:CHMI

US$114.5m

Lument Finance Trust

NYSE:LFT

US$115.4m

Great Ajax

NYSE:AJX

US$176.4m

Price History & Performance

Summary of all time highs, changes and price drops for Seven Hills Realty Trust
Historical stock prices
Current Share Price	US$9.22
52 Week High	US$11.80
52 Week Low	US$9.22
Beta	0
1 Month Change	-11.52%
3 Month Change	-12.85%
1 Year Change	-11.43%
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	-13.02%

Recent News & Updates

Sep 21

Seven Hills Realty Trust appoints CFO and treasurer

Seven Hills Realty Trust (NASDAQ:SEVN) appointed Tiffany Sy CFO and treasurer, effective Oct. 1. Sy had joined The RMR Group (NASDAQ:RMR) in 2020. She has been promoted to the post of vice president of RMR and has also been appointed CFO and treasurer of Tremont Realty Capital, both effective Oct. 1. Sy succeeds Douglas Lanois. Lanois is resigning from SEVN, Tremont Realty Capital and RMR, effective Sep. 30. He will remain a non-executive employee of RMR until Dec. 31. Source: Press Release

Jul 27

Seven Hills Realty Trust Non-GAAP EPS of $0.24

Seven Hills Realty Trust press release (NASDAQ:SEVN): Q2 Non-GAAP EPS of $0.24. "During the second quarter, we experienced strong earnings growth year over year and continued to execute on our plan to fully invest SEVN’s capital. We completed $60 million of high-quality loan originations, bringing our committed capital to $735 million, which represents a threefold increase in our loan book compared to a year ago. The credit quality of our portfolio remains strong, with all loans current on debt service and no loans in default," stated President of SEVN Tom Lorenzini

Jul 14

Seven Hills Realty Trust declares $0.25 dividend

Seven Hills Realty Trust (NASDAQ:SEVN) declares $0.25/share quarterly dividend, in line with previous. Forward yield 9.2% Payable Aug. 18; for shareholders of record July 25; ex-div July 22. See SEVN Dividend Scorecard, Yield Chart, & Dividend Growth.

Shareholder Returns

	SEVN	US Mortgage REITs	US Market
7D	-8.7%	-15.9%	-5.8%
1Y	-11.4%	-38.5%	-22.1%

Return vs Industry: SEVN exceeded the US Mortgage REITs industry which returned -37.8% over the past year.

Return vs Market: SEVN exceeded the US Market which returned -23.7% over the past year.

Price Volatility

Is SEVN's price volatile compared to industry and market?
SEVN volatility
SEVN Average Weekly Movement	2.5%
Mortgage REITs Industry Average Movement	4.9%
Market Average Movement	6.9%
10% most volatile stocks in US Market	15.7%
10% least volatile stocks in US Market	2.8%

Stable Share Price: SEVN is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 2% a week.

Volatility Over Time: SEVN's weekly volatility (2%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2008	n/a	n/a	https://sevnreit.com

Seven Hills Realty Trust, a real estate investment trust, focuses on originating and investing in first mortgage loans secured by middle market and transitional commercial real estate in the United States. The company has elected to be taxed as a real estate investment trust. As a result, it would not be subject to corporate income tax on that portion of its net income that is distributed to shareholders.

Seven Hills Realty Trust Fundamentals Summary

How do Seven Hills Realty Trust's earnings and revenue compare to its market cap?
SEVN fundamental statistics
Market Cap	US$134.96m
Earnings (TTM)	US$38.84m
Revenue (TTM)	US$23.36m

3.5x

P/E Ratio

5.8x

P/S Ratio

Is SEVN overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
SEVN income statement (TTM)
Revenue	US$23.36m
Cost of Revenue	US$0
Gross Profit	US$23.36m
Other Expenses	-US$15.48m
Earnings	US$38.84m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	2.65
Gross Margin	100.00%
Net Profit Margin	166.27%
Debt/Equity Ratio	169.7%

How did SEVN perform over the long term?

See historical performance and comparison

Dividends

10.8%

Current Dividend Yield

31%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is SEVN undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for SEVN?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for SEVN. This is calculated by dividing SEVN's market cap by their current preferred multiple.
What is SEVN's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$134.96m

SEVN key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	n/a
Enterprise Value/EBITDA	n/a
PEG Ratio	-0.1x

Price to Earnings Ratio vs Peers

How does SEVN's PE Ratio compare to its peers?

SEVN PE Ratio vs Peers

The above table shows the PE ratio for SEVN vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	14.7x
SACH Sachem Capital	8.8x	35.4%	US$126.8m
CHMI Cherry Hill Mortgage Investment	18.7x	28.3%	US$114.5m
LFT Lument Finance Trust	15.2x	51.0%	US$115.4m
AJX Great Ajax	16.1x	150.0%	US$176.4m
SEVN Seven Hills Realty Trust	3.5x	-25.0%	US$135.0m

Price-To-Earnings vs Peers: SEVN is good value based on its Price-To-Earnings Ratio (3.5x) compared to the peer average (14.7x).

Price to Earnings Ratio vs Industry

How does SEVN's PE Ratio compare vs other companies in the US Mortgage REITs Industry?

Price-To-Earnings vs Industry: SEVN is good value based on its Price-To-Earnings Ratio (3.5x) compared to the US Mortgage REITs industry average (10.4x)

Price to Earnings Ratio vs Fair Ratio

What is SEVN's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

SEVN PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	3.5x
Fair PE Ratio	6.1x

Price-To-Earnings vs Fair Ratio: SEVN is good value based on its Price-To-Earnings Ratio (3.5x) compared to the estimated Fair Price-To-Earnings Ratio (6.1x).

Share Price vs Fair Value

What is the Fair Price of SEVN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: SEVN ($9.22) is trading below our estimate of fair value ($31.78)

Significantly Below Fair Value: SEVN is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

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Future Growth

How is Seven Hills Realty Trust forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-25.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: SEVN's earnings are forecast to decline over the next 3 years (-25% per year).

Earnings vs Market: SEVN's earnings are forecast to decline over the next 3 years (-25% per year).

High Growth Earnings: SEVN's earnings are forecast to decline over the next 3 years.

Revenue vs Market: Insufficient data to determine if SEVN's revenue is forecast to grow faster than the US market.

High Growth Revenue: Insufficient data to determine if SEVN's revenue is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if SEVN's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Seven Hills Realty Trust performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

122.8%

Last years revenue growth

Earnings and Revenue History

Quality Earnings: SEVN has high quality earnings.

Growing Profit Margin: SEVN became profitable in the past.

Past Earnings Growth Analysis

Earnings Trend: Unable to establish if SEVN's year-on-year earnings growth rate was positive over the past 5 years as it has been trading publicly for less than 3 years.

Accelerating Growth: Unable to compare SEVN's past year earnings growth to its 5-year average as it has been trading publicly for less than 3 years.

Earnings vs Industry: SEVN has become profitable in the last year, making it difficult to compare its past year earnings growth to the Mortgage REITs industry (-1.6%).

Return on Equity

High ROE: SEVN's Return on Equity (14.6%) is considered low.

Discover strong past performing companies

Financial Health

How is Seven Hills Realty Trust's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: SEVN's short term assets ($721.7M) exceed its short term liabilities ($172.3M).

Long Term Liabilities: SEVN's short term assets ($721.7M) exceed its long term liabilities ($282.7M).

Debt to Equity History and Analysis

Debt Level: SEVN's net debt to equity ratio (151.6%) is considered high.

Reducing Debt: Insufficient data to determine if SEVN's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: SEVN's debt is not well covered by operating cash flow (2%).

Interest Coverage: Insufficient data to determine if SEVN's interest payments on its debt are well covered by EBIT.

Balance Sheet

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Dividend

What is Seven Hills Realty Trust current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

10.85%

Current Dividend Yield

Dividend Yield vs Market

Seven Hills Realty Trust Dividend Yield vs Market

How does Seven Hills Realty Trust dividend yield compare to the market?
Segment	Dividend Yield
Company (Seven Hills Realty Trust)	10.8%
Market Bottom 25% (US)	1.7%
Market Top 25% (US)	4.7%
Industry Average (Mortgage REITs)	13.8%
Analyst forecast in 3 Years (Seven Hills Realty Trust)	12.5%

Notable Dividend: SEVN's dividend (10.85%) is higher than the bottom 25% of dividend payers in the US market (1.67%).

High Dividend: SEVN's dividend (10.85%) is in the top 25% of dividend payers in the US market (4.68%)

Stability and Growth of Payments

Stable Dividend: Too early to tell whether SEVN's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if SEVN's dividend payments are increasing as they only just started paying a dividend.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (31.2%), SEVN's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (159.2%), SEVN's dividend payments are not well covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

1.0yrs

Average board tenure

CEO

Seven Hills Realty Trust has no CEO, or we have no data on them.

Board Members

Experienced Board: SEVN's board of directors are not considered experienced ( 1 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

NasdaqCM:SEVN Recent Insider Transactions by Companies or Individuals
Date	Value	Name	Entity	Shares	Max Price
11 May 22	BuyUS$9,468,227	Tremont Realty Capital	Company	882,407	US$10.73
16 Nov 21	BuyUS$52,813	Matthew Jordan	Individual	5,000	US$10.56
12 Nov 21	BuyUS$10,500	Thomas Lorenzini	Individual	1,000	US$10.50

Ownership Breakdown

What is the ownership structure of SEVN?
Owner Type	Number of Shares	Ownership Percentage
Individual Insiders	335,808	2.3%
Private Companies	1,708,058	11.7%
Institutions	3,365,370	23.0%
General Public	9,228,827	63.0%

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 43.3%.

Top Shareholders

Top 25 shareholders own 36.31% of the company

Ownership	Name	Shares	Current Value	Change %	Portfolio %
11.67%	Tremont Realty Capital	1,708,058	$15.7m	106.87%	no data
5.23%	Morgan Stanley, Investment Banking and Brokerage Investments	766,185	$7.1m	5.86%	no data
4.01%	Independent Advisor Alliance, LLC	586,466	$5.4m	0%	0.33%
3.55%	The Vanguard Group, Inc.	519,685	$4.8m	-3.38%	no data
1.88%	Bulldog Investors, LLP	274,892	$2.5m	0%	0.82%
1.4%	Deschutes Portfolio Strategy, LLC	204,382	$1.9m	0%	2%
1.27%	Mariner Investment Group, LLC	185,615	$1.7m	10.13%	2.63%
1.24%	Adam Portnoy	181,426	$1.7m	3.42%	no data
0.87%	Almitas Capital LLC	127,550	$1.2m	-21.5%	0.43%
0.79%	Robotti & Company, Incorporated	116,053	$1.1m	0%	0.24%
0.73%	Geode Capital Management, LLC	106,522	$982.1k	30.26%	no data
0.56%	Modern Capital Management, Co.	81,747	$753.7k	20.32%	4.78%
0.54%	The RMR Group LLC	78,879	$727.3k	2.21%	0.88%
0.41%	Goldman Sachs Group, Investment Banking and Securities Investments	60,175	$554.8k	2.4%	no data
0.41%	Scotiabank Global Banking and Markets, Asset Management Division	59,364	$547.3k	17.36%	no data
0.38%	Cambridge Investment Research Advisors, Inc.	56,196	$518.1k	2.44%	no data
0.3%	Matthew Jordan	43,204	$398.3k	24.61%	no data
0.22%	State Street Global Advisors, Inc.	31,710	$292.4k	150.08%	no data
0.15%	Joseph Morea	21,879	$201.7k	37.79%	no data
0.15%	Northern Trust Global Investments	21,397	$197.3k	-0.29%	no data
0.13%	Raymond James Financial Inc., Asset Management Arm	19,436	$179.2k	-92.49%	no data
0.13%	John Harrington	19,196	$177.0k	0%	no data
0.12%	Jeffrey Somers	17,311	$159.6k	53.05%	no data
0.11%	Private Advisor Group, LLC	15,827	$145.9k	0%	no data
0.083%	William Lamkin	12,096	$111.5k	98.43%	no data

Data	Last Updated (UTC time)
Company Analysis	2022/09/27 00:00
End of Day Share Price	2022/09/27 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31