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Apple Hospitality REIT (APLE)
NYSE:APLE
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Apple Hospitality REIT
(NYSE:APLE)71Outperform
Positive Factors
Dividend Yield
Apple Hospitality's dividend yield is above peers, making it an attractive option for investors seeking income.
Financial Performance
The company's Q4 performance exceeded expectations due to lower hotel operating expenses and interest expense.
Negative Factors
Expense Growth
Higher costs are expected to lead to a decline in margins for APLE.
Apple Hospitality REIT (APLE) vs. S&P 500 (SPY)
Market Cap
$3.48B
Dividend Yield6.59%
Average Volume (3M)2.06M
Price to Earnings (P/E)16.3
Beta (1Y)1.00
Revenue Growth6.52%
EPS Growth14.45%
CountryUS
Employees63
SectorReal Estate
Sector Strength72
IndustryREITs
Share Statistics
EPS (TTM)0.89
Shares Outstanding239,770,390
10 Day Avg. Volume2,862,391
30 Day Avg. Volume2,055,272
Financial Highlights & Ratios
PEG Ratio1.13
Price to Book (P/B)N/A
Price to Sales (P/S)2.44
Price to Cash Flow (P/CF)9.20
P/FCF Ratio9.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$16.50Price Target Upside13.79% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
Apple Hospitality REIT Business Overview & Revenue Model
Company DescriptionApple Hospitality REIT, Inc. (APLE) is a publicly traded real estate investment trust that specializes in the ownership of high-quality, upscale hotels across the United States. The company is recognized for its strategic investment in hotels affiliated with well-established brands such as Hilton, Marriott, and Hyatt, focusing on select-service, extended-stay, and full-service hotels. Apple Hospitality REIT aims to generate attractive returns for its shareholders by maintaining a diversified portfolio of properties that deliver consistent performance.
How the Company Makes MoneyApple Hospitality REIT makes money primarily through the ownership and operation of its hotel properties. The company generates revenue by leasing its hotel rooms and facilities to guests, which includes both leisure and business travelers. Revenue streams include room rentals, food and beverage sales, and other hotel services. Additionally, the company benefits from strategic partnerships with major hotel brands like Hilton, Marriott, and Hyatt, which help drive occupancy rates and enhance property value. Apple Hospitality REIT's earnings are significantly influenced by the performance of the hospitality industry, which can be affected by economic conditions, travel trends, and seasonal factors.
Apple Hospitality REIT Financial Statement Overview
Summary
Apple Hospitality REIT has shown strong financial performance with significant improvements in revenue, profitability, and cash flow. The income statement reflects robust revenue growth and profitability recovery, the balance sheet indicates financial stability with low leverage, and the cash flow showcases strong cash conversion efficiency. Continued focus on optimizing operational efficiency and capital expenditures could further enhance financial strength.Income Statement
Apple Hospitality REIT's income statement shows a solid performance with consistent growth in revenue over the years, increasing from $601.9 million in 2020 to $1.43 billion in 2024. The Gross Profit Margin improved significantly, reaching 75.1% in 2024, indicating efficient cost management. Net Profit Margin also grew from negative values in 2020 to 14.95% in 2024, showcasing strong profitability. The EBIT and EBITDA margins have steadily increased, reflecting enhanced operational efficiency. Despite the initial pandemic impact, the company has demonstrated robust revenue growth and profitability recovery.85
Very Positive
Balance Sheet
The balance sheet of Apple Hospitality REIT demonstrates financial stability with a healthy Equity Ratio of 65.7% in 2024, indicating a strong equity base relative to total assets. The Debt-to-Equity Ratio is relatively low at 0.03, suggesting conservative leverage levels. Return on Equity improved to 6.55% in 2024, reflecting better profitability. Overall, the balance sheet appears strong, with a significant equity base and low leverage, although there is room for improvement in ROE.80
Positive
Cash Flow
Cash flow analysis for Apple Hospitality REIT shows robust free cash flow generation, with Free Cash Flow growing from negative values in 2020 to $405.35 million in 2024. The Operating Cash Flow to Net Income ratio of 1.89 in 2024 indicates strong cash conversion efficiency. The company has maintained positive operating cash flow throughout the years, supporting its operational and financial activities. While the cash flow position is strong, continued focus on optimizing capital expenditures could further enhance free cash flow.78
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.43B | 1.34B | 1.24B | 933.87M | 601.88M | Gross Profit |
| 1.07B | 483.77M | 455.03M | 319.71M | 121.36M | EBIT |
| 292.76M | 247.48M | 206.48M | 87.04M | -107.80M | EBITDA |
| 483.36M | 430.72M | 412.56M | 278.67M | 97.75M | Net Income Common Stockholders |
| 214.06M | 177.49M | 144.81M | 18.83M | -173.21M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 10.25M | 10.29M | 4.08M | 3.28M | 5.56M | Total Assets |
| 4.97B | 4.94B | 4.77B | 4.79B | 4.83B | Total Debt |
| 111.58M | 1.48B | 1.48B | 1.55B | 1.70B | Net Debt |
| 101.33M | 1.47B | 1.47B | 1.55B | 1.70B | Total Liabilities |
| 1.70B | 1.61B | 1.59B | 1.64B | 1.80B | Stockholders Equity |
| 3.27B | 3.32B | 3.18B | 3.15B | 3.03B |
| Cash Flow | Free Cash Flow | |||
| 405.35M | 326.98M | 309.07M | 199.25M | -21.83M | Operating Cash Flow |
| 405.35M | 399.04M | 368.45M | 217.56M | 26.73M | Investing Cash Flow |
| -215.71M | -364.63M | -135.91M | -150.68M | -82.26M | Financing Cash Flow |
| -189.19M | -34.31M | -228.97M | -61.30M | 55.24M |
Apple Hospitality REIT Technical Analysis
Negative
14.50
Price Trends
15.03
Negative
15.10
Negative
14.49
Positive
Market Momentum
-0.18
Positive
39.89
Neutral
32.95
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For APLE, the sentiment is Negative. The current price of 14.5 is below the 20-day moving average (MA) of 15.00, below the 50-day MA of 15.03, and above the 200-day MA of 14.49, indicating a neutral trend. The MACD of -0.18 indicates Positive momentum. The RSI at 39.89 is Neutral, neither overbought nor oversold. The STOCH value of 32.95 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for APLE.
Apple Hospitality REIT Risk Analysis
Apple Hospitality REIT disclosed 40 risk factors in its most recent earnings report. Apple Hospitality REIT 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
Apple Hospitality REIT Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $11.28B | 16.29 | 10.55% | 4.96% | 7.02% | -4.78% | |
71 Outperform | $3.48B | 16.34 | 6.55% | 6.59% | 6.52% | 14.45% | |
68 Neutral | $2.48B | 12.16 | 5.82% | 8.33% | -3.67% | 122.68% | |
61 Neutral | $4.91B | 18.99 | -3.12% | 7.77% | 6.71% | -19.69% | |
61 Neutral | $1.42B | ― | -0.16% | 0.33% | 2.35% | 57.81% | |
58 Neutral | $1.41B | 33.83 | 1.88% | 5.32% | 3.31% | -15.16% | |
54 Neutral | $1.34B | 85.53 | 1.30% | 3.58% | 1.33% | -10.65% |
* Real Estate Sector Average
Performance Comparison
APLE
Apple Hospitality REIT
14.50
-0.89
-5.78%
HST
Host Hotels & Resorts
15.85
-3.94
-19.91%
PEB
Pebblebrook Hotel
11.84
-4.15
-25.95%
RLJ
RLJ Lodging
9.33
-2.13
-18.59%
XHR
Xenia Hotels & Resorts
13.18
-1.68
-11.31%
PK
Park Hotels & Resorts
11.75
-4.02
-25.49%
Apple Hospitality REIT Earnings Call Summary
Earnings Call Date: Feb 24, 2025 | % Change Since: -0.28% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance with growth in RevPAR and EBITDARE, favorable market dynamics, and successful capital allocation strategies. However, there were challenges in specific markets, underperformance of a new acquisition, rising fixed expenses, and a challenging transaction market. Despite these lowlights, the overall sentiment is buoyed by solid financial metrics and strategic market positioning.Highlights
Strong Growth in RevPAR and EBITDARE
Achieved comparable hotels RevPAR growth of approximately 3% for the fourth quarter and more than 1% for the full year. Fourth quarter adjusted EBITDARE was up approximately 7% and modified funds from operations increased by 6% compared to the previous year.
Favorable Market Dynamics
Approximately 55% of hotels did not have any new upper upscale, upscale, or upper midscale product under construction within a five-mile radius, enhancing the risk profile of the portfolio.
Successful Capital Allocation
Acquired two hotels for $196 million, sold six hotels for more than $63 million, repurchased approximately $35 million in common shares, and reinvested $78 million in the existing portfolio. These actions highlight tactical strategy adjustments to optimize portfolio and maximize returns.
Resilient Leisure Travel Demand
Leisure travel demand remained resilient, contributing significantly to the overall strong performance of the portfolio.
High Dividend Yield
Paid distributions totaling $0.24 per common share in the fourth quarter, resulting in an annual yield of approximately 6.5% based on the closing stock price.
Lowlights
Challenges in Specific Markets
Seattle properties were negatively impacted by Boeing disruption. Nashville, Atlanta, and Denver assets experienced weaker performance due to recent supply growth and less robust group and event calendars.
Underperformance of New Acquisition
The newly opened Embassy Suites in Madison underperformed expectations in the fourth quarter, impacting overall portfolio results.
Rising Fixed Expenses
Real estate taxes increased by 11% during the quarter, while property insurance costs rose, challenging comparisons with the previous year.
Transaction Market Challenges
The transaction market remains challenging with historical low industry deal volume, making it difficult to execute large-scale portfolio sales.
Company Guidance
During the fourth quarter and full year 2024 earnings call, Apple Hospitality REIT, Inc. provided robust guidance highlighting several key metrics. The company achieved a comparable hotels RevPAR growth of approximately 3% for the fourth quarter and more than 1% for the full year, with improvements in both ADR and occupancy. Adjusted EBITDARE increased by approximately 7% for the quarter, while modified funds from operations rose by around 6% compared to 2023. The company paid distributions totaling $0.24 per common share in the fourth quarter, resulting in an annual payout of approximately $244 million or $1.01 per share. With a strong pipeline and limited supply growth, Apple Hospitality anticipates continued favorable supply-demand dynamics, supporting its RevPAR growth guidance of 1% to 3% for 2025. The company expects comparable hotel EBITDA margins to range between 34.2% and 35.2% and plans capital expenditures between $80 million and $90 million. This comprehensive approach aims to optimize shareholder value through strategic acquisitions, dispositions, and reinvestments.Apple Hospitality REIT Corporate Events
Business Operations and StrategyFinancial Disclosures
Apple Hospitality REIT Releases Updated Investor Presentation
Positive
Feb 28, 2025
On February 28, 2025, Apple Hospitality REIT released an updated investor presentation on its website, detailing operating statistics for January and February 2025. The presentation highlights the company’s strong financial performance in 2024, including a total revenue of $1.4 billion and a net income per share of $0.89. The company also reported a 21.3 percentage point total shareholder return outperformance compared to the MSCI US REIT Index for the 2021-2023 period. The announcement reflects Apple Hospitality’s strategic focus on upscale, rooms-focused hotels and its commitment to maintaining a strong, flexible balance sheet, which positions it well for future growth and stability in the real estate investment sector.
Business Operations and StrategyFinancial Disclosures
Apple Hospitality REIT Updates Investor Presentation
Positive
Feb 25, 2025
On February 25, 2025, Apple Hospitality REIT updated its investor presentation on its website, providing operating statistics for January and February 2025. The company reported a 3% growth in Comparable Hotels RevPAR for Q4 2024 and a slight improvement for January 2025, indicating a positive trend in hotel performance. The presentation highlights the company’s strategic focus on upscale, rooms-focused hotels, efficient operations, and broad geographic diversification, positioning it well in the market.
Business Operations and StrategyFinancial Disclosures
Apple Hospitality REIT Highlights Strong Financial Performance
Positive
Dec 11, 2024
Apple Hospitality REIT has released an updated investor presentation on its website, detailing key operating statistics for November 2024. The presentation highlights the company’s strategic focus on upscale, rooms-focused hotels and its strong financial performance, including a reported 4% growth in RevPAR for October 2024 compared to the previous year. This update underscores Apple Hospitality’s commitment to enhancing shareholder value through strategic acquisitions, efficient operations, and maintaining a robust balance sheet.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.