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Sunrise Realty Trust (SUNS): analysis traps
Where its figures could mislead a reader, and what to check before taking them at face value · Data: Q2 2026, to Jun 30, 2026, filed Aug 6, 2026; rules v1.1
Sunrise Realty Trust (SUNS): 2 rules of 10 triggered on the filings to Jun 30, 2026: A REIT's low net income = the dividend is unsafe; stock compensation added back = no economic cost; 3 with insufficient data; 4 not applicable. Each is a question to verify, with the normal explanation that would produce the same figures.
Check these first
A REIT's low net income = the dividend is unsafe Triggered · severity high · confidence medium
Dividends of $15M were paid in FY2025 while operating cash flow was −$3M: the payout is funded by borrowing or asset sales, whatever net income says.
Innocent reading: A one-off working-capital swing in the year.
Stock compensation added back = no economic cost Triggered · severity medium · confidence high
Stock compensation was $1M, 4.7% of revenue, in FY2025; buybacks were $0 (0.0× the SBC) and the diluted share count still rose 86.9%. 'Adjusted' figures that add SBC back treat pay in shares as free; the cost is borne by every shareholder as dilution, or by the cash spent to buy the shares back.
Innocent reading: A young company paying in equity while it scales; intensity falls as revenue grows.
Every rule
A01 FCF growth = the business improved Not applicable
a financial company: free cash flow after capex is not the measure of its business
A07 Stock compensation added back = no economic cost Triggered severity medium · confidence high
Stock compensation was $1M, 4.7% of revenue, in FY2025; buybacks were $0 (0.0× the SBC) and the diluted share count still rose 86.9%. 'Adjusted' figures that add SBC back treat pay in shares as free; the cost is borne by every shareholder as dilution, or by the cash spent to buy the shares back.
The figures and how they are read
| Fiscal year | FY2025 |
| Stock compensation | $1M |
| Revenue | $22M |
| SBC / revenue | +4.7% |
| Buybacks | 0 |
| Buybacks / SBC | 0.0 |
| Diluted shares, year before | 6.8M shares |
| Diluted shares | 12.8M shares |
| Diluted shares: change | +86.9% |
SBC / revenue from the cash flow statement's add-back; the diluted weighted share count year over year; buybacks from the financing section
Source: FY2025 (stock compensation, buybacks and the diluted share count, fiscal year)
What would explain it innocently
- A young company paying in equity while it scales; intensity falls as revenue grows
- Buybacks at prices below intrinsic value make up for the dilution over time
- A one-off grant (an acquisition, a founder award) rather than a steady level
What to look for in the filing
- The share count after the latest buybacks (the next 10-Q's cover)
- The price paid for the buybacks against the shares' value
- Unvested awards outstanding
What would show the trap does not apply
- The diluted share count falls over two years with buybacks at least equal to the stock compensation
- Stock compensation falls as a share of revenue in each of the next two years
Look again: next filing.
B02 Receivables growing = future cash is certain Not applicable
a financial company: receivables and DSO are not its working capital
B08 Adjusted profit = economic profit Not triggered confidence low
Adjusted and GAAP EPS were within 10% of each other in the last 3 quarters.
The figures and how they are read
| Quarter / adjusted EPS / GAAP EPS / gap | 2025-09-30 / 0.3 / 0.3 / 0.0; 2026-03-31 / 0.32 / 0.32 / 0.0; 2026-06-30 / 0.23 / 0.23 / 0.0 |
| Quarters with adjusted ≥ 10% above GAAP | 0 |
| Quarters compared | 3 |
| Latest gap | +0.0% |
the analysts' 'actual' (usually the company's adjusted EPS) against GAAP net income ÷ diluted shares for the matching quarter; a gap of 10% or more counts (the stand-in until three releases' reconciliation tables are on file)
Source: 2025-09-30 (adjusted 0.30 vs GAAP 0.30) · 2026-03-31 (adjusted 0.32 vs GAAP 0.32) · 2026-06-30 (adjusted 0.23 vs GAAP 0.23)
C02 Low net debt = no refinancing risk Insufficient data
no debt figure could be read from the balance sheet (the filing may tag it in other lines)
D03 EPS growth = profit growth Insufficient data
no quarter with EPS, net income and diluted shares for both this year and last
E02 Low P/E at a cyclical peak = undervalued Not applicable
a financial company: J06 reads its cycle instead
E07 A precise DCF value = the true value Insufficient data
no DCF in the valuation research for this company
J06 A bank's low P/E and high profit = safe Not applicable
not a bank
J08 A REIT's low net income = the dividend is unsafe Triggered severity high · confidence medium
Dividends of $15M were paid in FY2025 while operating cash flow was −$3M: the payout is funded by borrowing or asset sales, whatever net income says.
The figures and how they are read
| Fiscal year | FY2025 |
| Net income | $12M |
| operating cash flow | −$3M |
| dividends paid | $15M |
| capex | 0 |
| payout of net income | 1.24 |
| payout of ocf | — |
| payout of ocf after capex | — |
a REIT's net income is after depreciation of buildings that usually hold their value, so FFO / AFFO is the payout measure; here operating cash flow and operating cash flow after capex stand in for it (capex includes acquisitions of property where the filing lumps them)
Source: FY2025 (net income, operating cash flow, dividends and capex, fiscal year)
What would explain it innocently
- A one-off working-capital swing in the year
- A development programme nearing completion
What to look for in the filing
- FFO and AFFO as the REIT reports them
- The development pipeline and its funding
What would show the trap does not apply
- FFO or AFFO per share covers the dividend after recurring capex, and operating cash flow catches up with the dividend in the next year
- The gap to operating cash flow is a disclosed one-off (a lease settlement, a timing difference) that reverses
Look again: next filing.
What the statuses mean
Triggered: the filings show the pattern; read the normal explanations and the missing evidence before concluding anything. To review: one quarter or a weak signal; a reader's judgement, not a pattern. Not triggered: the pattern is absent on these figures. Insufficient data: the filings read so far do not hold what the rule needs; this is not a clean bill. Not applicable: the rule is not meant for this kind of company (a bank's working capital, a loss-making quarter's EPS growth). Out of date: the latest filing is more than fifteen months old.
Severity is what the pattern could mean for cash, value or solvency; confidence is how reliable the inputs and the reading are. The two are kept apart.
Record a view
A reader's judgement, grounds, what would change it and the next review; kept in the browser (needs JavaScript).
Every rule and the companies it triggers on → Sunrise Realty Trust: cash flow →
Each rule reads the company's own filings by a fixed formula and says what would explain the same figures innocently. A triggered rule is a question to verify, not a finding of manipulation, and not a view on the stock. Missing data is shown as missing, never as clear. Not investment advice.