Value
6.1/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 8.9 |
| EV/EBITDA | 1.5 |
| p ocf | 8.6 |
| Analyst target | 6.0 |
- ▸P/OCF: 9.5x (FFO proxy — REITs gated off P/E)
BRSP · Why this verdict
Why BrightSpire Capital (BRSP) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.1/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
BrightSpire trades at roughly 9.6x price-to-operating-cash-flow, used as an FFO proxy since REITs are excluded from standard P/E scoring, positioning the stock as reasonably valued within its mortgage REIT peer group. Valuation breakdown | The P/OCF multiple should stay near or below 10x over the next 12 months for the valuation case to hold. | →Stable |
| CounterA mortgage REIT's P/OCF multiple can compress quickly if credit losses or rate moves impair book value, regardless of the current multiple looking reasonable. | ||
BRSP fails the model's risk/reward asymmetry gate, with only about 4.0% modeled upside against 5.0% downside, a thin margin that the bear case flags directly. Bear case | The asymmetry ratio should rise above 1.5 over the next 12 months for the risk/reward setup to clear the gate. | →Stable |
| CounterREIT price targets near book value can still deliver total return through the dividend even when price upside alone looks thin. | ||
The company is running cash-flow negative on a free-cash-flow basis (-83% of revenue) and fails the model's Rule of 40 growth-plus-profitability test at -76, despite a strong Piotroski F-Score of 8 out of 9. Quality breakdown | Free cash flow as a percent of revenue should improve toward breakeven over the next 12 months. | →Stable |
| CounterREIT free cash flow is structurally distorted by mortgage origination and portfolio turnover accounting, so this metric may not map cleanly onto operating health. | ||
BrightSpire has posted three consecutive earnings misses, with only one beat in the trailing four quarters and an average surprise of roughly -2.9%, contributing to a weak overall score of 4.9 out of 10. Earnings | The company should return to at least one earnings beat over the next two reports for the miss streak to be broken. | →Stable |
| CounterThe average surprise magnitude of just -2.9% is small in absolute terms, suggesting these are narrow misses rather than a large earnings deterioration. | ||
BrightSpire trades at roughly 9.6x price-to-operating-cash-flow, used as an FFO proxy since REITs are excluded from standard P/E scoring, positioning the stock as reasonably valued within its mortgage REIT peer group.
→StableValuation breakdown
- Expectation
- The P/OCF multiple should stay near or below 10x over the next 12 months for the valuation case to hold.
CounterA mortgage REIT's P/OCF multiple can compress quickly if credit losses or rate moves impair book value, regardless of the current multiple looking reasonable.
BRSP fails the model's risk/reward asymmetry gate, with only about 4.0% modeled upside against 5.0% downside, a thin margin that the bear case flags directly.
→StableBear case
- Expectation
- The asymmetry ratio should rise above 1.5 over the next 12 months for the risk/reward setup to clear the gate.
CounterREIT price targets near book value can still deliver total return through the dividend even when price upside alone looks thin.
The company is running cash-flow negative on a free-cash-flow basis (-83% of revenue) and fails the model's Rule of 40 growth-plus-profitability test at -76, despite a strong Piotroski F-Score of 8 out of 9.
→StableQuality breakdown
- Expectation
- Free cash flow as a percent of revenue should improve toward breakeven over the next 12 months.
CounterREIT free cash flow is structurally distorted by mortgage origination and portfolio turnover accounting, so this metric may not map cleanly onto operating health.
BrightSpire has posted three consecutive earnings misses, with only one beat in the trailing four quarters and an average surprise of roughly -2.9%, contributing to a weak overall score of 4.9 out of 10.
→StableEarnings
- Expectation
- The company should return to at least one earnings beat over the next two reports for the miss streak to be broken.
CounterThe average surprise magnitude of just -2.9% is small in absolute terms, suggesting these are narrow misses rather than a large earnings deterioration.
TrendMatrix Research · core thesis
Engine thesis — one sentence
BrightSpire Capital looks reasonably valued on an FFO-proxy basis, but a failed risk/reward gate, negative free cash flow, and three consecutive earnings misses weigh on the near-term investment case.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 1.7 |
| Gross margin | 9.9 |
| Op margin | 10.0 |
| Net margin | 0.0 |
| Current ratio | 5.0 |
| FCF quality | 0.0 |
| Moat | 5.1 |
| Rule of 40 | 3.0 |
| Piotroski F | 8.9 |
- ▸Cash-burning: FCF -83% of revenue
- ▸No competitive moat
- ▸Rule of 40: -76 (fail)
- ▸Strong Piotroski F-Score: 8/9
Growth
4.2/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 4.2 |
Momentum
2.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 6.1 |
| OBV | 1.0 |
| MA position | 2.2 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA but MA still rising (+1.0%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 7.9 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 22%
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
5.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.2 |
| quality rank | 0.8 |
| growth rank | 5.0 |
- ▸Conservative debt levels
Technical
8.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 8.1 |
| support resistance | 7.9 |
| 52w position | 7.9 |
Risk (lower is worse)
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.7 |
| days to cover | 3.7 |
| volatility | 6.0 |
| put call | 6.7 |
| implied vol | 0.1 |
| beta | 5.6 |
| debt equity | 2.1 |
- ▸High IV: 79%
Catalyst
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 1.1 |
| dividend safety | 4.3 |
- ▸Earnings concerns: 1B/3M
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (5)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:20d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:2.6<4.5
- ASYMMETRY:1.2<1.5@spot
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
1.22
Upside
+6.3%
Downside
5.2%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.36>1.3, MCap $0.7B<$5B
Investment implication
The F-path SELL output reflects an overall score of 5.1 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Technical at 8.0) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:2.6<4.5, ASYMMETRY:1.2<1.5@spot) reinforce the read. Current asymmetry R:R is 1.22 — supplementary context, not the trigger for this path.
The strongest dimensions are Technical at 8.0, Insider at 7.3, and Value at 6.1; the weakest are Momentum at 2.6, Catalyst at 3.1, and Growth at 4.2. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 1.22 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Reit Ffo Multiple Value Read
Trip ifP/OCF multiple rises above 15x from the current ~9.6x.
- P2Failed Asymmetry Thin Upside
Trip ifAsymmetry ratio rises above 1.5 from the current 0.79.
- P3Negative Free Cash Flow Quality Concern
Trip ifFree cash flow as a percent of revenue rises above 0% (turns positive) for 2 consecutive quarters.
- P4Consecutive Earnings Misses
Trip ifThe company posts an earnings beat with a positive surprise that exceeds 0% in its next reported quarter (due 2026-07-28), breaking the current 3-quarter miss streak.