Summit Hotel Properties (INN) AI Stock Analysis

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Summit Hotel Properties

(NYSE:INN)

Rating:64Neutral

Price Target:

$5.00

▲(5.71%Upside)

Summit Hotel Properties has a robust financial position with effective cost management and a solid balance sheet, which are the most significant strengths. However, technical indicators and valuation suggest caution, with a high P/E ratio and mixed technical signals. The earnings call highlights both positives and significant risks, leading to a conservative outlook. The attractive dividend yield is a notable positive for investors seeking income.

Summit Hotel Properties (INN) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$602.33M

Dividend Yield6.81%

Average Volume (3M)1.27M

Price to Earnings (P/E)37.9

Beta (1Y)1.31

Revenue Growth-1.86%

EPS GrowthN/A

CountryUS

Employees85

SectorReal Estate

Sector Strength63

IndustryREIT - Hotel & Motel

Share Statistics

EPS (TTM)-0.04

Shares Outstanding112,221,375

10 Day Avg. Volume1,430,759

30 Day Avg. Volume1,274,223

Financial Highlights & Ratios

PEG Ratio-5.07

Price to Book (P/B)0.79

Price to Sales (P/S)0.00

P/FCF Ratio8.15

Enterprise Value/Market Cap3.98

Enterprise Value/Revenue0.82

Enterprise Value/Gross Profit13.07

Enterprise Value/Ebitda2.61

Forecast

1Y Price Target

$5.00

Price Target Upside5.71% Upside

Rating ConsensusHold

Number of Analyst Covering1

Summit Hotel Properties Business Overview & Revenue Model

Company DescriptionSummit Hotel Properties, Inc. is a publicly traded real estate investment trust focused on owning premium-branded hotels with efficient operating models primarily in the Upscale segment of the lodging industry. As of November 3, 2020, the Company's portfolio consisted of 72 hotels, 67 of which are wholly owned, with a total of 11,288 guestrooms located in 23 states.

How the Company Makes MoneySummit Hotel Properties generates revenue primarily through the ownership and operation of its hotel properties. The company's income is largely derived from room rentals, food and beverage sales, and other related services offered at its hotels. As a REIT, Summit benefits from tax advantages that require it to distribute a significant portion of its taxable income as dividends to shareholders. The company also engages in strategic partnerships with hotel management companies to operate its properties, which helps optimize operational efficiency and profitability. Additionally, Summit may pursue acquisitions and dispositions of properties to enhance its portfolio and drive growth in earnings.

Summit Hotel Properties Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q1-2025)

% Change Since: 18.25%|

Next Earnings Date:Aug 05, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed outlook. There were notable achievements, such as the strong performance of the urban portfolio and successful renovation projects. However, these were offset by declines in RevPAR, challenging special event comparisons, and softening demand in key segments. The approval of a share repurchase program signals management's confidence in the long-term value of the company, but the current economic uncertainties and pressures are significant.

Q1-2025 Updates

Positive Updates

Urban Portfolio Performance

RevPAR in the company's urban portfolio increased nearly 3%, outpacing the total industry by approximately 80 basis points. Strong performers included New Orleans, Tampa, San Francisco, Chicago, and Downtown Houston, all with RevPAR growth of 7% or higher.

Successful Renovation

The Courtyard by Marriott Oceanside, Fort Lauderdale Beach completed a comprehensive renovation, expected to significantly increase average rates and close the rate gap with competitive oceanfront properties.

Share Repurchase Program

A $50 million share repurchase program was approved to return capital to shareholders, driven by significant dislocation in the company's stock price.

Margin Management

Despite modest RevPAR growth, hotel EBITDA margin contraction was limited to 49 basis points due to strong cost control measures like reducing contract labor by 9% and improving employee retention.

Negative Updates

RevPAR Decline in March

March RevPAR declined 1.6% in the same-store portfolio, with government-related demand particularly weak, leading to a 7% year-over-year decline in qualified revenue.

Challenging Special Event Comparisons

Second-quarter RevPAR is expected to decline between 2% and 4% due to difficult comparisons with last year's special events like the solar eclipse, Final Four, and Kentucky Derby.

Demand Softening in Government and International Travel

Demand for government and international travel segments showed significant weakening, with no clear signs of immediate recovery.

Outlook Tracking Towards Lower End of Guidance

Full-year performance is tracking towards the lower end of guidance for adjusted EBITDA, adjusted FFO, and adjusted FFO per share.

Company Guidance

During the first quarter 2025 earnings call, Summit Hotel Properties provided guidance indicating the company's performance is tracking towards the lower end of its full-year forecasts for adjusted EBITDA, adjusted FFO, and adjusted FFO per share. The company expects second quarter RevPAR to decline between 2% and 4% year-over-year, with the first half of the year potentially seeing a 1% RevPAR decline. Summit's updated full-year guidance assumes flat RevPAR growth for 2025, with each 1% increase in full-year RevPAR equating to approximately $5 million in pro rata EBITDA or $0.04 of adjusted FFO per share. Additionally, Summit announced a $50 million share repurchase program, intended to be used opportunistically to enhance shareholder value.

Summit Hotel Properties Financial Statement Overview

Summary

Summit Hotel Properties displays a strong financial profile with improvements in profitability and cash flow generation. While revenue growth has been modest, the company has effectively managed costs and leverage, resulting in stable margins and a solid balance sheet. The overall financial health is robust, reflecting a well-managed financial strategy in the REIT - Hotel & Motel industry.

Income Statement

Positive

Summit Hotel Properties shows a stable gross profit margin and has improved its net profit margin significantly from negative in previous years to a positive 5.64% TTM. Revenue growth has been moderate, with a slight decline in recent periods. The EBIT and EBITDA margins are healthy, indicating effective cost management and operational efficiencies.

Balance Sheet

Positive

The company maintains a reasonable debt-to-equity ratio of 1.57, suggesting balanced leverage. Return on equity is modest at 4.46% TTM, reflecting improved profitability. The equity ratio stands at 31.78%, indicating a solid equity base to support assets. Overall, the balance sheet reflects stability with manageable debt levels.

Cash Flow

Positive

The operating cash flow to net income ratio is strong, demonstrating robust cash generation relative to net income. Free cash flow has improved significantly, showcasing effective capital expenditure management. The free cash flow to net income ratio indicates solid cash conversion, highlighting the company's capability to generate cash from operations.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
728.12M	731.78M	736.13M	675.70M	361.93M	234.46M
	Gross Profit
183.57M	259.64M	258.02M	255.90M	117.31M	34.07M
	EBIT
71.49M	103.49M	58.79M	67.78M	-15.77M	-102.79M
	EBITDA
226.09M	227.74M	212.40M	208.05M	83.07M	1.98M
	Net Income Common Stockholders
41.07M	43.64M	-9.49M	1.47M	-68.58M	-149.25M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
48.19M	40.64M	51.80M	51.26M	64.48M	20.72M
	Total Assets
2.90B	2.90B	2.94B	3.02B	2.26B	2.23B
	Total Debt
1.44B	1.42B	1.46B	1.69B	1.09B	1.11B
	Net Debt
1.39B	1.38B	1.42B	1.64B	1.02B	1.09B
	Total Liabilities
1.53B	1.51B	1.54B	1.56B	1.16B	1.18B
	Stockholders Equity
920.44M	909.54M	911.20M	959.81M	948.07M	988.74M
Cash Flow		Free Cash Flow
183.05M	166.32M	64.06M	93.15M	45.70M	-64.68M
	Operating Cash Flow
164.02M	166.32M	153.64M	169.62M	66.05M	-42.05M
	Investing Cash Flow
-78.16M	-71.50M	-101.96M	-290.51M	-74.24M	-30.71M
	Financing Cash Flow
-101.66M	-94.23M	-65.72M	85.76M	66.24M	41.83M

Summit Hotel Properties Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price4.73

Price Trends

50DMA

4.23

Positive

100DMA

5.19

Negative

200DMA

5.78

Negative

Market Momentum

MACD

0.06

Negative

RSI

63.20

Neutral

STOCH

88.20

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For INN, the sentiment is Neutral. The current price of 4.73 is above the 20-day moving average (MA) of 4.38, above the 50-day MA of 4.23, and below the 200-day MA of 5.78, indicating a neutral trend. The MACD of 0.06 indicates Negative momentum. The RSI at 63.20 is Neutral, neither overbought nor oversold. The STOCH value of 88.20 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for INN.

Summit Hotel Properties Risk Analysis

Summit Hotel Properties disclosed 70 risk factors in its most recent earnings report. Summit Hotel Properties 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

Summit Hotel Properties Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CLDT	71 Outperform	$359.05M	127.26	1.42%	4.91%	1.75%	―
XHR	70 Outperform	$1.24B	55.89	1.83%	4.47%	3.57%	12.66%
BHR	67 Neutral	$167.62M	―	-0.90%	8.00%	-2.42%	23.64%
INN	64 Neutral	$602.33M	37.93	4.45%	6.81%	-1.86%	―
Sector *	61 Neutral	$2.86B	10.96	0.41%	6.08%	5.73%	-21.25%
SVC	54 Neutral	$413.26M	―	-33.91%	1.61%	0.78%	-128.16%
AHT	44 Neutral	$35.81M	―	-25.85%	―	-14.65%	-55.62%

* Real Estate Sector Average

Performance Comparison

INN

Summit Hotel Properties

4.73

-0.85

-15.23%

SVC

Service Properties

2.45

-2.40

-49.48%

CLDT

Chatham Lodging

7.23

-0.90

-11.07%

AHT

Ashford Hospitality

5.99

-4.11

-40.69%

BHR

Braemar Hotels & Resorts

2.53

-0.27

-9.64%

XHR

Xenia Hotels & Resorts

12.36

-1.55

-11.14%

Summit Hotel Properties Corporate Events

Executive/Board ChangesShareholder Meetings

Summit Hotel Properties Elects Directors at Annual Meeting

Neutral

May 22, 2025

On May 21, 2025, Summit Hotel Properties held its Annual Meeting of Stockholders, where 87.62% of outstanding shares were represented. During the meeting, all eight director nominees were elected, Ernst & Young LLP was ratified as the independent accounting firm for 2025, and the compensation of the company’s executive officers was approved on a non-binding basis.

The most recent analyst rating on (INN) stock is a Hold with a $5.00 price target. To see the full list of analyst forecasts on Summit Hotel Properties stock, see the INN Stock Forecast page.

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.