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RLJ Lodging Trust (RLJ)
NYSE:RLJ
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RLJ Lodging
(NYSE:RLJ)
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Select Model
Rating:63Neutral
Price Target:
$8.00
â–²(7.53% Upside)
RLJ Lodging's overall score reflects a solid financial foundation with strong revenue growth and a debt-free balance sheet. However, concerns about profitability and valuation, coupled with mixed earnings call sentiment, weigh on the score. The technical indicators suggest cautious optimism, but the high P/E ratio and macroeconomic challenges present risks.
Positive Factors
Strong Balance Sheet
A debt-free balance sheet enhances financial stability and flexibility, allowing RLJ to invest in growth opportunities without the burden of interest expenses.
Urban Hotels Performance
Strong performance in urban hotels indicates successful market positioning and operational strategy, contributing to long-term revenue growth and competitive advantage.
CFO Appointment
The appointment of a seasoned CFO with internal experience can enhance financial oversight and strategic planning, supporting long-term business objectives.
Negative Factors
Low Net Profit Margin
A low net profit margin indicates limited profitability, which could hinder reinvestment in the business and affect long-term shareholder returns.
Declining Free Cash Flow
Decreasing free cash flow growth may limit RLJ's ability to fund new projects or return capital to shareholders, impacting future growth potential.
RevPAR Decline
A decline in RevPAR suggests challenges in maintaining pricing power and occupancy rates, which could pressure revenue growth in the competitive hospitality sector.
RLJ Lodging (RLJ) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.13B
Dividend Yield8.06%
Average Volume (3M)2.35M
Price to Earnings (P/E)35.2
Beta (1Y)1.08
Revenue Growth1.42%
EPS Growth-20.13%
CountryUS
Employees73
SectorReal Estate
Sector Strength53
IndustryREIT - Hotel & Motel
Share Statistics
EPS (TTM)0.15
Shares Outstanding151,164,670
10 Day Avg. Volume2,396,551
30 Day Avg. Volume2,346,658
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap3.01
Enterprise Value/Revenue2.49
Enterprise Value/Gross Profit5.46
Enterprise Value/Ebitda9.87
Forecast
1Y Price Target
$8.58Price Target Upside15.32% Upside
Rating ConsensusHold
Number of Analyst Covering6
RLJ Lodging Business Overview & Revenue Model
Company DescriptionRLJ 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 MoneyRLJ generates revenue primarily through the operation of its hotel properties, which includes income from room rentals, food and beverage sales, and ancillary services. The company benefits from its strategic partnerships with well-known hotel brands, which enhance its marketability and occupancy rates. Additionally, RLJ engages in property management and leasing, contributing to its revenue streams. The company may also pursue acquisitions of undervalued or distressed properties to enhance its portfolio, driving future earnings through increased occupancy and operational efficiencies.
RLJ Lodging Earnings Call Summary
Earnings Call Date:Aug 07, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 05, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a mix of positive outcomes, such as strong performance in urban hotels, effective cost management, and successful conversions, balanced against challenges like RevPAR decline, softer group demand, and macroeconomic uncertainties. While there is optimism about the long-term outlook, near-term uncertainties weigh on sentiment.Q2-2025 Updates
Positive Updates
Urban Hotels Outperformance
Urban hotels achieved significant RevPAR growth, outperforming the overall portfolio by 140 basis points. Notably, San Francisco CBD hotels saw a 20% RevPAR increase.
Positive Results from Conversions
The seven completed conversions collectively achieved 10% RevPAR growth, validating the company's strategy in driving operational upside through its conversion pipeline.
Leisure Revenue Growth
Leisure revenues increased by 5%, driven by events such as the U.S. Open, Formula One, and World Cup games, with urban leisure segments achieving 7% revenue growth.
Cost Management Success
RLJ managed to keep operating expense growth flat through aggressive cost management, limiting margin compression to just 90 basis points.
Strong Balance Sheet
The company reinforced its balance sheet by addressing near-term maturities and paying down the remaining balance on its revolver, ending the quarter with nearly $1 billion in liquidity.
Negative Updates
RevPAR Decline
RevPAR declined by 2.1% in the second quarter, impacted by transformational renovations and the closure of the Austin Convention Center.
Softer Group Demand
Group revenues were affected by holiday shifts and reduced demand from government-related groups, leading to a lack of compression during the quarter.
Macro Environment Uncertainty
The broader macro environment remains uncertain, contributing to shorter booking windows and limited visibility, particularly impacting the third quarter outlook.
International Travel Weakness
International travel demand remains soft, impacting leisure segments and contributing to third-quarter challenges.
Company Guidance
During the RLJ Lodging Trust Second Quarter 2025 Earnings Call, the company provided several key metrics that highlight their financial and operational performance. RLJ achieved a 75.5% occupancy rate, with an average daily rate of $205, leading to a RevPAR of $155, which represented a 2.1% decline from the prior year. Despite a 1.6% drop in occupancy and a 0.5 percentage point decrease in ADR, the company's urban hotels outperformed the overall portfolio with notable RevPAR growth in South Florida and Northern California at 13% and 10.3%, respectively. The company reported a corporate adjusted EBITDA of $104 million and an adjusted FFO per diluted share of $0.48. Non-room revenues grew by 1.5%, driven by ROI initiatives, while hotel EBITDA margins stood at 31.1%. RLJ also reported that their 7 completed conversions achieved a 10% RevPAR growth, and their urban leisure segment saw a 7% revenue increase. The company repurchased 0.8 million shares for $6 million, maintaining a disciplined approach to capital allocation. Looking ahead, RLJ anticipates a challenging third quarter due to various factors, including a 200 basis point impact from renovations and the Austin Convention Center closure, while expecting stronger trends in the fourth quarter supported by favorable calendar shifts and improved group travel dynamics.RLJ Lodging Financial Statement Overview
Summary
RLJ Lodging shows a recovering financial position with strong revenue growth and improving operational margins. The absence of debt in 2024 strengthens the balance sheet, ensuring financial stability. However, limited profitability and declining free cash flow growth indicate 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.65
Positive
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.72
Positive
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.60
Neutral
| 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 | 624.25M | 384.45M | 390.46M | 362.26M | 185.29M | -30.23M |
| EBITDA | 345.15M | 335.30M | 354.64M | 310.00M | 137.76M | -73.78M |
| Net Income | 45.23M | 68.02M | 76.41M | 41.92M | -305.17M | -404.50M |
Balance Sheet | ||||||
| Total Assets | 4.82B | 4.88B | 4.92B | 4.98B | 5.15B | 5.62B |
| Cash, Cash Equivalents and Short-Term Investments | 373.90M | 409.81M | 516.67M | 536.39M | 665.34M | 899.81M |
| Total Debt | 0.00 | 2.34B | 2.34B | 2.33B | 2.53B | 2.71B |
| Total Liabilities | 2.58B | 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 | 334.02M | 285.42M | 315.14M | 132.24M | -5.30M | -242.04M |
| Operating Cash Flow | 261.65M | 285.42M | 315.14M | 256.52M | 42.96M | -168.71M |
| Investing Cash Flow | -108.88M | -275.73M | -134.75M | -135.51M | -24.63M | -66.69M |
| Financing Cash Flow | -165.92M | -131.69M | -161.45M | -298.49M | -239.25M | 243.03M |
RLJ Lodging Technical Analysis
Negative
7.44
Price Trends
7.53
Negative
7.41
Positive
8.02
Negative
Market Momentum
-0.02
Positive
45.29
Neutral
19.53
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RLJ, the sentiment is Negative. The current price of 7.44 is below the 20-day moving average (MA) of 7.62, below the 50-day MA of 7.53, and below the 200-day MA of 8.02, indicating a bearish trend. The MACD of -0.02 indicates Positive momentum. The RSI at 45.29 is Neutral, neither overbought nor oversold. The STOCH value of 19.53 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RLJ.
RLJ Lodging Risk Analysis
RLJ Lodging disclosed 2 risk factors in its most recent earnings report. RLJ Lodging reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
RLJ Lodging Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $1.38B | 22.61 | 5.18% | 3.62% | 4.81% | 185.08% | |
68 Neutral | $683.40M | -46.71 | 4.80% | 5.70% | -1.91% | -256.67% | |
63 Neutral | $1.13B | 35.20 | 2.53% | 8.06% | 1.42% | -20.13% | |
63 Neutral | $1.67B | 29.16 | 4.15% | 5.19% | 1.72% | -3.49% | |
57 Neutral | $1.36B | -19.97 | -0.82% | 0.35% | 2.00% | 50.70% | |
49 Neutral | $458.25M | -1.64 | -32.34% | 1.45% | -0.23% | -38.68% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% |
* Real Estate Sector Average
Performance Comparison
RLJ
RLJ Lodging
7.44
-1.26
-14.48%
DRH
Diamondrock
8.10
-0.24
-2.88%
INN
Summit Hotel Properties
5.61
-0.87
-13.43%
SVC
Service Properties
2.75
-1.74
-38.75%
PEB
Pebblebrook Hotel
11.47
-1.72
-13.04%
XHR
Xenia Hotels & Resorts
14.36
0.04
0.28%
RLJ Lodging Corporate Events
Executive/Board Changes
RLJ Lodging Executive VP Chad Perry Resigns
Neutral
Apr 15, 2025
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.
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.