Pebblebrook Hotel (PEB) AI Stock Analysis

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Pebblebrook Hotel

(NYSE:PEB)

64Neutral

Pebblebrook Hotel demonstrates strong cash flow and a stable balance sheet, but faces challenges with profitability and technical weakness. While high dividends and successful earnings performance are positives, the overall valuation remains strained by negative earnings.

Positive Factors

Earnings

Pebblebrook Hotel reported 4Q EBITDA above its guidance and consensus due to better RevPAR, food and beverage revenues, and margins.

Market Position

The recent sell-off/underperformance and discounted valuation presents an attractive entry point.

Negative Factors

Guidance

The company's 2025 guidance missed consensus expectations.

Natural Disasters

The impact from the LA wildfires is expected to be a significant headwind to revenue and EBITDA growth.

Pebblebrook Hotel (PEB) vs. S&P 500 (SPY)

Market Cap

$1.11B

Dividend Yield0.52%

Average Volume (3M)2.74M

Price to Earnings (P/E)―

Beta (1Y)1.50

Revenue Growth2.35%

EPS Growth57.81%

CountryUS

Employees60

SectorReal Estate

Sector Strength86

IndustryREIT - Hotel & Motel

Share Statistics

EPS (TTM)-0.44

Shares Outstanding118,685,165

10 Day Avg. Volume2,846,973

30 Day Avg. Volume2,743,303

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.85

Price to Cash Flow (P/CF)4.40

P/FCF Ratio7.40

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$12.68

Price Target Upside35.18% Upside

Rating ConsensusHold

Number of Analyst Covering11

Pebblebrook Hotel Business Overview & Revenue Model

Company DescriptionPebblebrook Hotel Trust (NYSE: PEB) is a publicly traded real estate investment trust (REIT) and the largest owner of urban and resort lifestyle hotels in the United States. The Company owns 53 hotels, totaling approximately 13,200 guestrooms across 14 urban and resort markets, with a focus on the west coast gateway cities.

How the Company Makes MoneyPebblebrook Hotel Trust generates revenue primarily through the ownership and operation of hotel properties. The company's income is derived from room bookings, food and beverage sales, and other hotel services such as event hosting and ancillary services. Revenue is influenced by factors such as occupancy rates, average daily rates, and overall demand in the hospitality sector. Pebblebrook enhances its earnings potential through strategic partnerships with major hotel brands which provide management and marketing support, as well as through capital improvements aimed at increasing property appeal and operational efficiency. Additionally, the company may engage in asset sales or refinancing activities to optimize its portfolio and capitalize on market conditions.

Pebblebrook Hotel Financial Statement Overview

Summary

Pebblebrook Hotel shows recovery in revenue and strong cash flow, but struggles with profitability, indicated by negative net income and margins. The balance sheet is stable with no debt, but profitability improvements are needed for sustained financial health.

Income Statement

Positive

Pebblebrook Hotel has shown a recovery in revenue from the pandemic lows, with a moderate revenue growth rate of 2.35% from 2023 to 2024. However, profitability remains a challenge as indicated by the negative net profit margin of -3.22% in 2024 and a declining EBIT margin, despite a positive EBITDA margin of 6.60%. This mixed performance highlights a need for improved cost management and profitability enhancement.

Balance Sheet

Positive

The company has a strong balance sheet, evidenced by a lack of total debt and a healthy equity ratio of 47.37% in 2024. The return on equity remains negative due to net losses, but the absence of debt significantly reduces financial risk. The increase in cash reserves and overall equity strength provide stability, although improved profitability is necessary for better ROE.

Cash Flow

Positive

Pebblebrook Hotel's cash flow is robust, with stable operating cash flow and a significant free cash flow increase from 2023 to 2024. The operating cash flow to net income ratio is strong, indicating efficient cash generation relative to accounting profits. The free cash flow to net income ratio is favorable, suggesting solid cash management despite net losses.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
1.45B	1.42B	1.39B	733.04M	442.89M
	Gross Profit
366.12M	354.27M	382.28M	124.79M	-50.87M
	EBIT
84.03M	37.81M	99.40M	-139.45M	-292.71M
	EBITDA
306.40M	274.58M	238.40M	84.69M	-100.45M
	Net Income Common Stockholders
-4.24M	-78.02M	-84.98M	-186.37M	-392.59M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
206.65M	183.75M	41.04M	58.52M	124.27M
	Total Assets
5.69B	5.82B	6.13B	6.26B	6.08B
	Total Debt
2.57B	2.64B	2.71B	2.76B	2.54B
	Net Debt
2.36B	2.46B	2.67B	2.70B	2.41B
	Total Liabilities
2.91B	2.97B	3.05B	3.10B	2.81B
	Stockholders Equity
2.70B	2.76B	3.00B	3.16B	3.26B
Cash Flow		Free Cash Flow
275.00M	236.20M	162.00M	-13.06M	-326.79M
	Operating Cash Flow
275.00M	236.20M	278.75M	70.77M	-201.78M
	Investing Cash Flow
-92.83M	142.02M	-109.39M	-81.57M	250.12M
	Financing Cash Flow
-158.22M	-236.85M	-209.34M	-33.25M	31.08M

Pebblebrook Hotel Technical Analysis

Technical Analysis Sentiment

Negative

Last Price9.38

Price Trends

50DMA

11.34

Negative

100DMA

12.50

Negative

200DMA

12.74

Negative

Market Momentum

MACD

-0.50

Negative

RSI

37.24

Neutral

STOCH

29.56

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PEB, the sentiment is Negative. The current price of 9.38 is below the 20-day moving average (MA) of 9.99, below the 50-day MA of 11.34, and below the 200-day MA of 12.74, indicating a bearish trend. The MACD of -0.50 indicates Negative momentum. The RSI at 37.24 is Neutral, neither overbought nor oversold. The STOCH value of 29.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PEB.

Pebblebrook Hotel Risk Analysis

Pebblebrook Hotel disclosed 74 risk factors in its most recent earnings report. Pebblebrook Hotel 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

Pebblebrook Hotel Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SHO	68 Neutral	$1.73B	62.92	2.01%	4.66%	-8.18%	-85.42%
PK	66 Neutral	$2.03B	9.97	5.68%	11.30%	-3.67%	122.68%
PEB	64 Neutral	$1.11B	―	-0.16%	0.52%	2.35%	57.81%
DRH	61 Neutral	$1.53B	40.22	2.98%	2.66%	5.12%	-49.88%
Sector *	61 Neutral	$4.31B	16.14	-3.60%	11.88%	6.17%	-20.99%
RLJ	59 Neutral	$1.13B	27.07	2.94%	8.66%	3.31%	-15.16%
XHR	54 Neutral	$964.66M	61.71	1.24%	5.42%	1.33%	-10.65%

* Real Estate Sector Average

Performance Comparison

PEB

Pebblebrook Hotel

9.38

-6.25

-39.99%

DRH

Diamondrock

7.28

-1.78

-19.65%

SHO

Sunstone Hotel

8.62

-1.96

-18.53%

RLJ

RLJ Lodging

7.41

-3.65

-33.00%

XHR

Xenia Hotels & Resorts

10.54

-3.93

-27.16%

Park Hotels & Resorts

10.07

-5.69

-36.10%

Pebblebrook Hotel Earnings Call Summary

Earnings Call Date: Feb 26, 2025 | % Change Since: -20.10% | Next Earnings Date: May 1, 2025

Earnings Call Sentiment Neutral

The call highlighted strong performance in resorts and redeveloped properties, improved financial metrics, and reduced leverage. However, it also noted challenges from natural disasters, headwinds in key urban markets, and costs from new labor agreements, leading to a mixed outlook for certain regions.

Highlights

Strong Resort Performance

Resort occupancy increased by 3.7% to 65%, with RevPAR climbing 8.8% at California resorts. This was driven by a 15% increase in business group demand and a 7% growth in food and beverage revenue.

Positive Financial Metrics

Adjusted EBITDA rose 0.8% to $352-$359.2 million, exceeding the midpoint of the outlook by $11.2 million. Adjusted FFO per diluted share grew 5% to $1.68, surpassing the outlook midpoint by $0.09.

RevPAR Growth Despite Challenges

For the full year, same-property total RevPAR increased 2.1%, with a 3.7% potential increase in Q4 excluding storm disruptions.

Strong Performance of Redeveloped Properties

Redeveloped properties saw a 10.7-point occupancy gain, an 11.3% RevPAR surge, and EBITDA growth of over 20%, with a 1,100 basis point market share gain.

Reduced Leverage

Net debt to EBITDA reduced to 5.8 times from 6.5 times in 2023, supported by strong operating performance and free cash flow.

Successful Capital Investments

Completed $91 million in capital investments in 2024, with early returns being extremely encouraging. Projected capital investments for 2025 are reduced to $65-$75 million.

Improved Urban Hotel Performance

Urban occupancy rose 2.9 percentage points to 68.1%, with solid growth in business group and transient demand.

Lowlights

Impact of Natural Disasters

Hurricanes Elaine and Milton caused disruptions, with LaPlaya Beach Resort's expected hotel EBITDA below its stabilized level, creating an earnings headwind.

Challenges in Key Urban Markets

Ongoing headwinds in San Francisco, Los Angeles, and Portland constrained urban performance. Excluding these markets, same-property urban total revenue growth would have been 7.7%.

Negative Impact from LA Wildfires

Wildfires led to significant group and transient cancellations, with a projected $9-$12 million impact to rooms revenue and a $12-$16 million hit to total revenue.

Labor Agreement Costs

Same-property hotel EBITDA for Q4 was $4 million below Q4 2023 due to one-time costs from new labor agreements in several urban markets.

Company Guidance

During the Pebblebrook Hotel Trust fourth-quarter earnings call, the company reported a significant outperformance against its 2024 outlook, driven by a 2.1% increase in same-property total RevPAR and a 0.8% rise in adjusted EBITDA to $352 to $359.2 million, exceeding the midpoint by $11.2 million. Adjusted FFO per diluted share grew by 5% to $1.68. The fourth quarter saw a 1.8% increase in same-property total RevPAR, with a notable 4% growth at resorts and a 0.7% increase at urban hotels, despite a 190 basis point impact from storms and renovations. Resort occupancy rose 3.7% to 65%, and weekday occupancy surged by 4.4 points, propelled by a 15% increase in business group demand. California resorts showed significant strength, with an 8.8% climb in RevPAR. The company's redeveloped properties delivered strong results, with a 3.8% increase in RevPAR for Q4 and a projected 11.3% surge for the year. For 2025, Pebblebrook anticipates industry RevPAR growth of 1 to 3%, with continued focus on operational efficiencies and cost controls, expecting a 3.1% growth in hotel expenses, adjusted for previous tax credits. The company plans a capital investment of $65 to $75 million, with potential redevelopment of the Paradise Point Resort in San Diego. Additionally, Pebblebrook successfully executed $1.6 billion in debt refinancing and extensions, ending 2024 with a reduced net debt to EBITDA ratio of 5.8 times.

Pebblebrook Hotel Corporate Events

Dividends

Pebblebrook Hotel Announces Quarterly Dividend Payments

Positive

Mar 14, 2025

On March 14, 2025, Pebblebrook Hotel Trust announced the declaration of quarterly cash dividends for its common and preferred shares. The dividends, which include $0.01 per common share and varying amounts for preferred shares, are payable on April 15, 2025, to shareholders of record as of March 31, 2025. This announcement reflects the company’s ongoing commitment to providing returns to its shareholders, despite the potential risks and uncertainties in the hotel industry and broader economy.

Executive/Board Changes

Pebblebrook Hotel Approves 2025 Executive Compensation Plan

Neutral

Feb 11, 2025

On February 7, 2025, Pebblebrook Hotel’s Board approved compensatory arrangements for its executive officers for 2025, maintaining a similar structure to 2024. The compensation package includes an annual cash base salary, a cash bonus incentive award, and long-term equity-based compensation, with the latter split into time-based and performance-based vesting components. The performance objectives for cash bonuses and equity vesting are designed to align with corporate goals, including financial performance, completed dispositions, and sustainability initiatives.

Financial Disclosures

Pebblebrook Hotel to Announce Q4 2024 Results

Neutral

Jan 13, 2025

Pebblebrook Hotel Trust announced it will report its fourth quarter 2024 financial and operating results on February 26, 2025, after market close, with a conference call scheduled for February 27, 2025. This announcement highlights the company’s commitment to transparency and provides stakeholders with insight into its recent performance.

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.