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Pebblebrook Hotel (PEB)
:PEB
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Pebblebrook Hotel
(NYSE:PEB)61Neutral
Positive Factors
Financial Performance
Pebblebrook Hotel reported 4Q EBITDA above its guidance and consensus due to better RevPAR, food and beverage revenues, and margins.
Market Position
Insider buying is noted, with the CEO and chairman purchasing 33,000 shares, indicating confidence in the company's future.
Negative Factors
External Challenges
The impact from the LA wildfires is expected to be a significant headwind to revenue and EBITDA growth.
Guidance and Outlook
The guidance for 1Q and 2025 was set below market expectations due to anticipated headwinds.
Market Valuation
Pebblebrook Hotel has a premium valuation and elevated leverage.
Pebblebrook Hotel (PEB) vs. S&P 500 (SPY)
Market Cap
$1.42B
Dividend Yield0.33%
Average Volume (3M)2.12M
Price to Earnings (P/E)―
Beta (1Y)1.41
Revenue Growth2.35%
EPS Growth57.81%
CountryUS
Employees60
SectorReal Estate
Sector Strength72
IndustryREITs
Share Statistics
EPS (TTM)-0.44
Shares Outstanding119,813,965
10 Day Avg. Volume2,483,505
30 Day Avg. Volume2,123,832
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.01
Price to Cash Flow (P/CF)5.30
P/FCF Ratio8.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$14.19Price Target Upside19.85% Upside
Rating ConsensusHold
Number of Analyst Covering9
Pebblebrook Hotel Business Overview & Revenue Model
Company DescriptionPebblebrook Hotel Trust is a publicly traded real estate investment trust (REIT) that specializes in acquiring and investing in upscale, full-service hotels primarily located in major urban and resort markets in the United States. The company focuses on managing a diverse portfolio of high-quality hotel properties under various brands, catering to both leisure and business travelers. Pebblebrook aims to enhance the value of its properties through strategic acquisitions, renovations, and efficient management practices.
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 revenue recovery and strong cash flows with no debt, yet struggles with profitability as indicated by negative net income and margins. The balance sheet stability offers a foundation for future improvement.Income Statement
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.62
Positive
Balance Sheet
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.70
Positive
Cash Flow
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.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| 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
Negative
11.84
Price Trends
13.02
Negative
13.09
Negative
13.25
Negative
Market Momentum
-0.32
Negative
38.34
Neutral
49.88
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 11.84 is below the 20-day moving average (MA) of 12.28, below the 50-day MA of 13.02, and below the 200-day MA of 13.25, indicating a bearish trend. The MACD of -0.32 indicates Negative momentum. The RSI at 38.34 is Neutral, neither overbought nor oversold. The STOCH value of 49.88 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 75 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 |
|---|---|---|---|---|---|---|---|
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% | |
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% | |
60 Neutral | $1.70B | 44.81 | 2.40% | 1.46% | 5.12% | -49.88% | |
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
PEB
Pebblebrook Hotel
11.84
-4.33
-26.78%
DRH
Diamondrock
8.11
-1.09
-11.85%
HST
Host Hotels & Resorts
15.85
-4.07
-20.43%
RLJ
RLJ Lodging
9.33
-2.20
-19.08%
XHR
Xenia Hotels & Resorts
13.18
-1.96
-12.95%
APLE
Apple Hospitality REIT
14.50
-0.88
-5.72%
Pebblebrook Hotel Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: 0.77% | Next Earnings Date: Apr 29, 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
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.
DividendsBusiness Operations and Strategy
Pebblebrook Hotel Declares Q4 2024 Dividends
Positive
Dec 16, 2024
Pebblebrook Hotel Trust announced that its Board of Trustees has authorized, and the Company has declared, cash dividends for the fourth quarter of 2024 on both its common and various series of preferred shares of beneficial interest. The dividends, which will be distributed to shareholders on January 15, 2025, reflect the company’s financial strategies and its ongoing commitment to return value to its investors, highlighting its stable position within the hospitality industry.
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.