Value
8.1/10data confidence 67%| Component | Sub-score |
|---|---|
| P/S | 9.4 |
| EV/EBITDA | 1.3 |
| p ocf | 9.5 |
| Analyst target | 9.0 |
- ▸P/OCF: 5.4x (FFO proxy — REITs gated off P/E)
- ▸Attractively valued
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. How we score · Editorial policy
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VerdictSELL
Overall score5.0/10
ConfidenceHIGH
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
BrightSpire is a deeply discounted mortgage REIT (price $3.66 vs $5.19 analyst target) but four straight earnings misses, cash burn and a downtrend make the recovery unproven.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
At $3.66, the stock sits 41.9% below its $5.19 analyst target and trades at 5.4x price-to-operating-cash-flow, so valuation is attractive. Bull case | Price closes part of the 41.9% gap to the target over 12 months as earnings stabilize. | →Stable |
| CounterAnalyst targets lag deteriorating fundamentals; four consecutive misses suggest estimates and targets are still too high. | ||
BrightSpire missed EPS estimates in each of the last 4 quarters, averaging a -9.9% surprise, so earnings power is below expectations. Avg surprise pct | EPS surprise turns non-negative as quarterly EPS stabilizes near the $0.13 recent level or better. | ↑Improving |
| CounterMisses are small in dollar terms ($0.01-0.02 per share) and a lowered estimate base could produce a beat quickly. | ||
Cash generation is weak, with free cash flow at -151% of revenue and revenue declining 4%. Quality breakdown | Revenue stabilizes near the $83.5M quarterly level and cash burn narrows. | →Stable |
| CounterFor a mortgage REIT, loan originations and repayments swing free cash flow, so the negative figure may not signal distress. | ||
Price is in a confirmed downtrend with the 200-day average sloping down 3.7% over 30 days, though MACD is improving and volume shows accumulation. Momentum breakdown | The 200-day average slope turns flat or positive as the stock builds a base. | ↑Improving |
| CounterA death cross with a falling long-term average historically precedes further declines, and earnings in 3 days is a binary event. | ||
At $3.66, the stock sits 41.9% below its $5.19 analyst target and trades at 5.4x price-to-operating-cash-flow, so valuation is attractive.
→StableBull case
- Expectation
- Price closes part of the 41.9% gap to the target over 12 months as earnings stabilize.
CounterAnalyst targets lag deteriorating fundamentals; four consecutive misses suggest estimates and targets are still too high.
BrightSpire missed EPS estimates in each of the last 4 quarters, averaging a -9.9% surprise, so earnings power is below expectations.
↑ImprovingAvg surprise pct
- Expectation
- EPS surprise turns non-negative as quarterly EPS stabilizes near the $0.13 recent level or better.
CounterMisses are small in dollar terms ($0.01-0.02 per share) and a lowered estimate base could produce a beat quickly.
Cash generation is weak, with free cash flow at -151% of revenue and revenue declining 4%.
→StableQuality breakdown
- Expectation
- Revenue stabilizes near the $83.5M quarterly level and cash burn narrows.
CounterFor a mortgage REIT, loan originations and repayments swing free cash flow, so the negative figure may not signal distress.
Price is in a confirmed downtrend with the 200-day average sloping down 3.7% over 30 days, though MACD is improving and volume shows accumulation.
↑ImprovingMomentum breakdown
- Expectation
- The 200-day average slope turns flat or positive as the stock builds a base.
CounterA death cross with a falling long-term average historically precedes further declines, and earnings in 3 days is a binary event.
Per-dimension breakdown
Quality
4.0/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 1.6 |
| Gross margin | 9.0 |
| Op margin | 10.0 |
| Net margin | 0.0 |
| Current ratio | 5.0 |
| FCF quality | 0.0 |
| Moat | 4.0 |
| Piotroski F | 6.7 |
- ▸Cash-burning: FCF -151% of revenue
- ▸No competitive moat
Growth
1.6/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 1.6 |
- ▸Declining revenue: -4%
Momentum
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 6.5 |
| OBV | 10.0 |
| MA position | 1.0 |
| Volume | 10.0 |
| vol acceleration | 2.9 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -4.0%/30d — confirmed downtrend
- ▸Volume surge (2.1x avg) on selloff
Sentiment
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.0 |
| Analyst rating | 6.8 |
| Price target | 9.8 |
- ▸Light analyst coverage (8.0) — signal dampened
- ▸Analyst upside: 63%
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
4.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.2 |
| quality rank | 0.3 |
| growth rank | 2.3 |
- ▸Conservative debt levels
Technical
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 7.1 |
| support resistance | 7.4 |
| 52w position | 2.8 |
| gap | 4.0 |
Risk (lower is worse)
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.8 |
| days to cover | 8.1 |
| volatility | 3.9 |
| beta | 5.5 |
| debt equity | 2.0 |
Catalyst
3.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 0.0 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 4.3 |
| news activity | 8.0 |
- ▸Earnings concerns: 0B/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 (6)
- MOMENTUM:5.6>=5.5
- ASYMMETRY:6.0>=1.5
- INSIDER:OK
- EARNINGS_PROXIMITY:110d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (2)
- DEATH_CROSS:momentum=5.6>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
6.05
Upside
+41.9%
Downside
6.9%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeSector Rotation — Real Estate sector out of favor, value=8.1
SuitabilityAggressive — Beta 1.38>1.3, MCap $0.5B<$5B
Investment implication
The F-path SELL output reflects an overall score of 3.3 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Value at 8.1) was not enough to lift the adjusted overall above the threshold. Current asymmetry R:R is 6.05 — supplementary context, not the trigger for this path.
The strongest dimensions are Value at 8.1, Sentiment at 7.1, and Momentum at 5.6; the weakest are Growth at 1.6, Catalyst at 3.7, and Quality at 4.0. The V9 engine cleared all gates with 2 warnings, producing an asymmetric reward-to-risk of 6.05 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Deep Value Vs Analyst Target
Trip ifAnalyst upside to target falls below 15% from the current 41.9%.
- P2Persistent Earnings Misses
Trip ifQuarterly EPS falls below $0.10 from the current $0.13, extending the miss streak beyond 4 quarters.
- P3Cash Burn And Revenue Decline
Trip ifQuarterly revenue falls below $75M from the current $83.5M.
- P4Downtrend Recovery Setup
Trip ifPrice drops to $3.45 or below, the stop level, from the current $3.66.