RLJ Lodging (RLJ) AI Stock Analysis

• Market Cap: $1.15B
• Dividend Yield: 7.96%
• Average Volume (3M): 1.58M
• Price to Earnings (P/E): 29.0
• Beta (1Y): 1.05
• Revenue Growth: 2.82%
• EPS Growth: -8.08%
• Country: US
• Employees: 73
• Sector: Real Estate
• Sector Strength: 52
• Industry: REIT - Hotel & Motel
• EPS (TTM): -0.02
• Shares Outstanding: 151,713,840
• 10 Day Avg. Volume: 1,591,979
• 30 Day Avg. Volume: 1,582,489
• PEG Ratio: -0.36
• Price to Book (P/B): 0.71
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 12.97
• Enterprise Value/Market Cap: 3.09
• Enterprise Value/Revenue: 0.65
• Enterprise Value/Gross Profit: 6.10
• Enterprise Value/Ebitda: 2.78
• 1Y Price Target: $8.50
• Price Target Upside: 12.29% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 6

• Rating: 64 Neutral
• Price Target: $8.00 ▲(5.68%Upside)

RLJ Lodging's financial stability, due to debt-free status and strong revenue growth, is a significant positive factor. However, challenges like low profitability, declining free cash flow, and macroeconomic uncertainties from the earnings call temper the overall score. The technical analysis indicates neutral momentum, while valuation shows a high P/E offset by a strong dividend yield.

Positive Factors

Capital Strategy

Proceeds from the asset sale were used to repurchase stock, reflecting a strategic use of capital.

Earnings

RLJ's earnings topped expectations on better top-line performance and better cost controls.

Financial Performance

Margins and expenses were better than anticipated, with Hotel EBITDA surpassing estimates.

Negative Factors

Market Preference

Downgrade of RLJ to Peer Perform is primarily driven by a shift in preference to resorts and group-focused assets.

Outlook

RLJ significantly reduced its 2H24 outlook, which is unchanged today, reflecting 3Q24 outperformance.

Supply Growth

Concerns over supply growth in the select-service segment relative to full-service.

RLJ Lodging Business Overview & Revenue Model

Company Description

RLJ Lodging Trust is a self-advised, publicly traded real estate investment trust that owns primarily premium-branded, high-margin, focused-service and compact full-service hotels. The Company's portfolio consists of 103 hotels with approximately 22,570 rooms, located in 23 states and the District of Columbia and an ownership interest in one unconsolidated hotel with 171 rooms.

How the Company Makes Money

RLJ Lodging Trust generates revenue primarily through the ownership and operation of its hotel properties. The company's primary revenue stream is derived from room rentals, which includes income from transient guests and group bookings. Additionally, RLJ earns revenue from ancillary services provided at its hotels, such as food and beverage sales, conference facilities, and parking fees. The company's strategic partnerships with major hotel brands, such as Marriott and Hilton, enhance its revenue potential by attracting a diverse customer base and ensuring high occupancy rates. These partnerships also provide access to global reservation systems and loyalty programs, which further contribute to RLJ's financial performance.

RLJ Lodging Financial Statement Overview

Summary

RLJ Lodging demonstrates strong revenue growth and improved operational margins, supported by a robust balance sheet with no debt. However, low net profit margins and declining free cash flow growth highlight areas needing improvement.

Income Statement

RLJ Lodging's revenue has shown a positive growth trajectory over recent years, with a notable recovery from pandemic lows. The gross profit margin is strong at 100%, reflecting efficient cost management. However, the net profit margin is relatively low at 3.13% in 2024, indicating limited profitability, which could be a concern if not improved. EBIT and EBITDA margins have improved significantly, showcasing better operational performance.

Balance Sheet

The balance sheet is strong, with no total debt reported in 2024, indicating a solid financial position. The debt-to-equity ratio is notably low, enhancing financial stability. Return on equity is modest at 1.88%, reflecting moderate returns to shareholders. The equity ratio is healthy, suggesting a robust capital structure.

Cash Flow

RLJ Lodging's cash flow metrics show a mixed picture. Operating cash flow is solid, but there has been a decline in free cash flow growth, down 9.43% from the previous year. The operating cash flow to net income ratio is robust, indicating good cash generation from operations, though the free cash flow to net income ratio could be strengthened for better financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.37B	1.37B	1.33B	1.19B	785.66M	473.09M
Gross Profit	585.00M	384.45M	390.46M	362.26M	185.29M	-21.94M
EBITDA	284.87M	327.74M	354.64M	320.44M	130.67M	-66.53M
Net Income	53.89M	68.02M	76.41M	41.92M	-311.09M	-408.80M
Balance Sheet
Total Assets	4.82B	4.88B	4.92B	4.98B	5.15B	5.62B
Cash, Cash Equivalents and Short-Term Investments	347.53M	409.81M	516.67M	481.32M	665.34M	899.81M
Total Debt	0.00	2.34B	2.34B	2.33B	2.53B	2.71B
Total Liabilities	2.57B	2.59B	2.57B	2.55B	2.74B	2.93B
Stockholders Equity	2.23B	2.28B	2.34B	2.41B	2.40B	2.67B
Cash Flow
Free Cash Flow	314.75M	285.42M	315.14M	132.24M	-5.30M	-242.04M
Operating Cash Flow	280.95M	285.42M	315.14M	256.52M	42.96M	-168.71M
Investing Cash Flow	-141.43M	-275.73M	-134.75M	-135.51M	-24.63M	-66.69M
Financing Cash Flow	-158.09M	-131.69M	-161.45M	-298.49M	-239.25M	243.03M

RLJ Lodging Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 7.57
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RLJ, the sentiment is Neutral. The current price of 7.57 is above the 20-day moving average (MA) of 7.23, above the 50-day MA of 7.15, and below the 200-day MA of 8.45, indicating a neutral trend. The MACD of 0.09 indicates Negative momentum. The RSI at 63.26 is Neutral, neither overbought nor oversold. The STOCH value of 79.13 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for RLJ.

RLJ Lodging Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PEB	69 Neutral	$1.27B	―	-0.33%	0.38%	2.18%	56.00%
XHR	69 Neutral	$1.30B	58.93	1.83%	4.24%	3.57%	12.66%
PK	69 Neutral	$2.17B	18.27	3.46%	9.26%	-3.68%	35.35%
DRH	66 Neutral	$1.66B	40.55	3.22%	4.00%	3.73%	-44.49%
RLJ	64 Neutral	$1.15B	28.99	2.92%	7.96%	2.82%	-8.08%
Sector *	63 Neutral	$6.99B	18.83	-1.16%	6.86%	4.65%	-25.28%
SHO	61 Neutral	$1.78B	92.35	1.66%	4.04%	-3.90%	-89.21%

RLJ Lodging Corporate Events

RLJ Lodging Executive VP Chad Perry Resigns

On April 9, 2025, Chad Perry, Executive Vice President, General Counsel and Corporate Secretary of RLJ Lodging Trust, announced his decision to resign from his roles effective May 9, 2025, to explore principal investing opportunities. His departure is amicable and not due to any disagreements with the company’s operations, policies, or practices.