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Chatham Lodging (CLDT)
NYSE:CLDT
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Chatham Lodging
(NYSE:CLDT)
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Rating:59Neutral
Price Target:
$7.00
▼(-5.41% Downside)
Action:ReiteratedDate:12/09/25
Chatham Lodging's overall stock score is primarily influenced by its mixed financial performance and bearish technical indicators. The high P/E ratio raises valuation concerns, although the dividend yield provides some support. The company's financial flexibility, highlighted by the increased credit facility, is a positive factor, but challenges in RevPAR and profitability weigh on the score.
Positive Factors
Financial Flexibility
The increased credit facility enhances Chatham's financial flexibility, allowing it to manage obligations and invest in growth opportunities, strengthening its competitive position in the lodging REIT sector.
Operational Efficiency
Maintaining strong operating profit margins despite cost pressures indicates effective cost management, supporting long-term profitability and operational resilience.
Market Performance
Growth in key markets like Coastal Northeast and Greater New York demonstrates Chatham's ability to capitalize on regional demand, enhancing revenue stability and market position.
Negative Factors
Revenue Growth Challenges
Negative revenue growth indicates difficulties in expanding sales, which could hinder long-term profitability and market competitiveness if not addressed.
RevPAR Decline
Declining RevPAR, especially in key markets, suggests challenges in maintaining occupancy and pricing power, potentially impacting future revenue and profitability.
Free Cash Flow Concerns
Negative free cash flow growth raises concerns about cash generation, which may limit the company's ability to fund operations and growth initiatives sustainably.
Chatham Lodging (CLDT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$354.65M
Dividend Yield5%
Average Volume (3M)244.62K
Price to Earnings (P/E)51.4
Beta (1Y)1.02
Revenue Growth-3.79%
EPS GrowthN/A
CountryUS
Employees17
SectorReal Estate
Sector Strength53
IndustryREIT - Hotel & Motel
Share Statistics
EPS (TTM)0.05
Shares Outstanding48,516,000
10 Day Avg. Volume272,829
30 Day Avg. Volume244,617
Financial Highlights & Ratios
PEG Ratio-3.85
Price to Book (P/B)0.58
Price to Sales (P/S)1.38
P/FCF Ratio5.99
Enterprise Value/Market Cap1.99
Enterprise Value/Revenue2.33
Enterprise Value/Gross Profit6.72
Enterprise Value/Ebitda8.01
Forecast
1Y Price Target
$8.08Price Target Upside9.19% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)-0.05
Revenue Forecast (FY)$293.59M
Chatham Lodging Business Overview & Revenue Model
Company DescriptionChatham Lodging Trust is a self-advised, publicly traded real estate investment trust focused primarily on investing in upscale, extended-stay hotels and premium-branded, select-service hotels. At September, 30, 2020, The company owns interests in 86 hotels totaling 12,040 rooms/suites, comprised of 40 properties it wholly owns with an aggregate of 6,092 rooms/suites in 15 states and the District of Columbia and a minority investment in the Innkeepers joint ventures that owns 46 hotels with an aggregate of 5,948 rooms/suites.
How the Company Makes MoneyChatham Lodging generates revenue primarily through the operation of its hotel properties, which provide lodging services to guests. The company earns income from room rentals, as well as ancillary services such as food and beverage sales, meeting room rentals, and other guest services. Chatham benefits from long-term leases with hotel management companies that operate its properties, allowing for stable cash flows. Additionally, the company may realize revenue from property sales or refinancing activities. Strategic partnerships with renowned hotel brands help drive occupancy rates, ensuring a steady stream of income, while the company's focus on the extended-stay segment caters to a growing market of travelers seeking longer-term accommodations.
Chatham Lodging Earnings Call Summary
Earnings Call Date:Feb 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call conveyed a cautiously positive tone: management emphasized strong operational execution, tight expense control, significant balance sheet improvement (net debt down ~$70M, leverage ~20%), active share repurchases, and materially increased shareholder returns (28% dividend hike). These positives offset top-line softness in several markets, one-time 2025 benefits that won't repeat, and conservative revenue guidance for 2026. Overall, the company’s financial and operational achievements and capital allocation flexibility outweigh the revPAR headwinds and market-specific challenges.Q4-2025 Updates
Positive Updates
Strong Expense Control and Margins
Q4 GOP margin of 40.2% (only down ~30 bps YoY in Q4) and hotel EBITDA margin of 33.2% in Q4 (up ~70 bps driven partly by $550k property tax refunds); full-year GOP margin decline was limited to ~40 bps despite revenue pressure, reflecting tight cost control and productivity gains.
Operational Outperformance vs. Industry
For the fourth consecutive year Chatham's RevPAR performance beat the industry, and management reclaimed the highest operating margins in the lodging REIT peer group—re-establishing a top-ranking they previously held from 2010–2019.
Labor Productivity Improvements
Headcount for 33 comparable hotels decreased ~13% YoY, labor and benefits costs were managed tightly (labor & benefits up modestly on a per-occupied-room basis; some measures showed slight declines), and wage pressure moderated with a stated hotel wage increase of ~2% in the second half, supporting margin resilience.
Share Repurchase Activity
Repurchased ~1,800,000 shares (~4% of outstanding) at an average price of $6.87 per share for ~ $13.0M (about half of the $25.0M plan); repurchases were described as accretive (approximate 9.5% implied cap rate vs. 2026 NOI guidance).
Balance Sheet Strength and Deleveraging
Completed a record financing with total capacity of $5.0B while reducing overall borrowing costs; used asset sale proceeds and free cash flow to reduce net debt by ~$70.0M and lower leverage to ~20% (vs ~35% in 2019), providing liquidity and flexibility.
Asset Sales and Capital Recycling
Completed four asset sales in 2025 totaling ~$71.4M (including Homewood Billerica sale of $17.4M in Dec 2025), using proceeds to reduce debt and/or fund buybacks; management plans opportunistic further dispositions to recycle capital.
Increased Shareholder Returns
Raised the common dividend by 28% in 2025 and, combined with repurchases and preferred dividends, returned approximately $35.0M to shareholders in 2025.
Q4 and LTM Financial Metrics
Q4 hotel EBITDA $22.4M, adjusted EBITDA $20.2M and adjusted FFO of $0.21 per share; 2025 quarterly RevPAR cadence showed Q1 +4.4%, Q2 -0.4%, Q3 -0.9%, Q4 -1.8% (full-year context provided for comparability).
Growth Initiatives and Sustainability
Converted excess meeting space to add 10 rooms, expected to increase returns; continued GRESB participation with a ranking of 29th out of 95 listed companies; planned Portland, Maine development (opening before summer 2028) to expand pipeline where development economics justify it.
Negative Updates
Top-Line Pressure and RevPAR Declines
Company RevPAR showed pressure in latter 2025 with Q4 RevPAR down ~1.8% and several markets with notable declines; full-year RevPAR showed a mixed cadence and 2026 RevPAR guidance is conservative at -0.5% to +1.5%.
Market-Specific Weaknesses
San Diego RevPAR declined ~8% in 2025 (weaker convention calendar, nearby Gaylord opening and border shutdown reduced government business); Dallas and Austin impacted by convention center renovations/construction; San Antonio had a weak convention calendar.
DC Shutdown Impact
Shutdown-related disruptions disproportionately affected the three DC-area hotels and accounted for roughly 60% of the quarterly RevPAR decline in the period cited, requiring easier comps into 2026 to recover.
Loss of Major Corporate Account in Sunnyvale
A pricing strategy dispute with a single corporate client at two Sunnyvale hotels led to a material shortfall (third quarter RevPAR down ~9% at those properties); management replaced some of that business but expected lingering impact into Q1 2026.
One-Time Items Boosting Reported Results
2025 results included roughly $2.6M of one-time benefits (property tax refunds, workers' compensation refunds, payroll tax refunds, and ~$550k tax refund in Q4) that are not expected to repeat in 2026, making FY2025 comparisons somewhat inflated.
Limited External Acquisitions in 2025
Management was disappointed not to make any external acquisitions in 2025; while they remain patient, deployment of capital into acquisitions has been limited despite improved balance sheet flexibility.
Renovation-Related Near-Term Headwinds
Several hotels underwent renovations (e.g., Mountain View Residence Inn under renovation through March) which temporarily suppressed RevPAR and will compress near-term comps; 2026 CapEx budget stated at ~$26.0M with multiple renovations scheduled.
Interest-Rate and Guidance Sensitivities
Guidance assumes SOFR will decline (interest expense to fall over 2026); the outlook and adjusted FFO ($1.04–$1.14) are sensitive to actual rate moves and to realization of conservative RevPAR expectations and any further one-time items.
Company Guidance
The company guided 2026 RevPAR of -0.5% to +1.5%, adjusted EBITDA of $84.0M–$89.0M, and adjusted FFO per share of $1.04–$1.14 (excluding noncash stock‑based compensation effective 01/01/2026); management expects Q1 RevPAR to be low single digits then positive for the rest of the year, and noted guidance assumes SOFR will decline (the company has $200M of floating‑rate debt so quarterly interest expense is modeled to fall). Guidance excludes any share repurchases or acquisitions (management intends to continue repurchases and expects to use most or all of the $25M plan), and reflects that 2025 included ~$2.6M of one‑time tax/refund benefits not expected to repeat and ~$2.1M of EBITDA from assets sold in 2025 (four asset sales totaling $71.4M, including Homewood Billerica for $17.4M). Additional planning metrics: 2026 CapEx is ~ $26M (Q4 CapEx was ~$4M), property‑insurance renewals projected to decline ~15% same‑store in 2026, and balance‑sheet actions in 2025 reduced net debt by ~$70M and leverage to ~20% (vs ~35% in 2019) while completing a financing with ~$5.0B total capacity. Market‑level RevPAR expectations communicated were: Silicon Valley +3%–5%, Los Angeles -1%–3%, Coastal Northeast flat–+2% (Greater NY flat), DC +2%–4%, San Diego down slightly, Dallas down mid‑single digits, and Bellevue mid to upper single digits.Chatham Lodging Financial Statement Overview
Summary
Chatham Lodging's financial statements present a mixed picture. While there are strengths in operational efficiency and a reduction in leverage, challenges remain in revenue growth and profitability. The company needs to focus on strategic initiatives to boost revenue and improve profit margins. Cash flow management is crucial, given the negative growth in free cash flow. Overall, the company is on a stable footing but must address these challenges to enhance financial performance.Income Statement
Chatham Lodging's income statement shows a mixed performance. The Gross Profit Margin for TTM is 28.44%, which is a decline from previous years, indicating pressure on cost management. The Net Profit Margin is low at 1.71%, reflecting challenges in achieving profitability. Revenue growth has been negative recently, with a -2.82% rate for TTM, suggesting a need for strategic initiatives to boost sales. However, the EBIT and EBITDA margins are relatively stable, indicating operational efficiency.65
Positive
Balance Sheet
The balance sheet reflects a moderate financial position. The Debt-to-Equity Ratio has improved to 0.49 in TTM, showing a reduction in leverage, which is positive. Return on Equity is low at 0.68%, indicating limited returns to shareholders. The Equity Ratio is stable, suggesting a balanced capital structure. Overall, the company has managed to reduce debt levels, enhancing financial stability.70
Positive
Cash Flow
Cash flow analysis reveals some concerns. Free Cash Flow Growth is negative at -29.05% for TTM, indicating potential issues in generating cash. However, the Operating Cash Flow to Net Income Ratio is strong at 2.01, suggesting efficient cash generation relative to net income. The Free Cash Flow to Net Income Ratio is also healthy at 1.15, indicating good cash conversion. Despite these strengths, declining free cash flow growth is a risk.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 302.45M | 317.21M | 311.11M | 294.85M | 203.97M | 132.45M |
| Gross Profit | 104.82M | 111.22M | 110.93M | 111.56M | 59.13M | 37.52M |
| EBITDA | 87.99M | 94.25M | 86.66M | 95.67M | 58.46M | -2.28M |
| Net Income | 8.73M | 4.17M | 2.64M | 9.80M | -18.41M | -76.02M |
Balance Sheet | ||||||
| Total Assets | 1.18B | 1.25B | 1.34B | 1.34B | 1.41B | 1.37B |
| Cash, Cash Equivalents and Short-Term Investments | 13.23M | 20.20M | 68.13M | 26.27M | 19.19M | 21.12M |
| Total Debt | 359.06M | 427.48M | 504.88M | 491.99M | 566.99M | 767.30M |
| Total Liabilities | 397.06M | 462.68M | 539.55M | 525.74M | 596.51M | 677.80M |
| Stockholders Equity | 749.44M | 758.22M | 776.06M | 794.89M | 797.50M | 677.75M |
Cash Flow | ||||||
| Free Cash Flow | 55.42M | 73.13M | 76.44M | 71.53M | 19.27M | -34.45M |
| Operating Cash Flow | 64.77M | 73.83M | 76.44M | 71.53M | 28.78M | -19.96M |
| Investing Cash Flow | 55.37M | -29.17M | -28.11M | 29.96M | -101.94M | 26.81M |
| Financing Cash Flow | -127.61M | -100.56M | -7.73M | -86.21M | 71.58M | 4.43M |
Chatham Lodging Technical Analysis
Positive
7.40
Price Trends
7.13
Positive
6.84
Positive
6.93
Positive
Market Momentum
0.09
Positive
53.58
Neutral
22.52
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CLDT, the sentiment is Positive. The current price of 7.4 is above the 20-day moving average (MA) of 7.39, above the 50-day MA of 7.13, and above the 200-day MA of 6.93, indicating a bullish trend. The MACD of 0.09 indicates Positive momentum. The RSI at 53.58 is Neutral, neither overbought nor oversold. The STOCH value of 22.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CLDT.
Chatham Lodging Risk Analysis
Chatham Lodging disclosed 61 risk factors in its most recent earnings report. Chatham Lodging 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
Chatham Lodging Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
59 Neutral | $354.65M | 51.44 | 1.13% | 5.00% | -3.79% | ― | |
55 Neutral | $209.43M | -3.58 | -1.09% | 7.17% | -2.84% | -11.92% | |
53 Neutral | $509.18M | -22.69 | 0.16% | 6.61% | -1.20% | -328.23% | |
53 Neutral | $364.75M | ― | -35.25% | 2.31% | -0.56% | -14.18% | |
46 Neutral | $18.91M | -0.06 | ― | ― | -7.89% | -833.99% |
* Real Estate Sector Average
CLDT
Chatham Lodging
7.40
-0.36
-4.64%
INN
Summit Hotel Properties
4.28
-1.65
-27.85%
SVC
Service Properties
2.21
-0.64
-22.35%
AHT
Ashford Hospitality
2.97
-5.26
-63.91%
BHR
Braemar Hotels & Resorts
3.10
0.64
26.22%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.