Sotherly Hotels (SOHO) AI Stock Analysis

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Sotherly Hotels

(NASDAQ:SOHO)

Rating:60Neutral

Price Target:

$1.00

▲( 26.58% Upside)

Sotherly Hotels' overall performance is mixed. While there is revenue growth and strong cash flow, high leverage and recent net losses dampen financial health. Technical indicators suggest moderate upward momentum, yet valuation metrics are concerning with a negative P/E ratio. Earnings call analysis reveals strong RevPAR performance, but concerns remain over operational disruptions and macroeconomic uncertainties. Overall, the stock is positioned in the mid-range, balanced by its financial and operational strengths against notable risks.

Sotherly Hotels (SOHO) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$31.89M

Dividend YieldN/A

Average Volume (3M)21.31K

Price to Earnings (P/E)―

Beta (1Y)1.02

Revenue Growth3.82%

EPS Growth18.62%

CountryUS

Employees9

SectorReal Estate

Sector Strength64

IndustryREIT - Hotel & Motel

Share Statistics

EPS (TTM)0.13

Shares Outstanding20,490,501

10 Day Avg. Volume28,598

30 Day Avg. Volume21,310

Financial Highlights & Ratios

PEG Ratio-0.17

Price to Book (P/B)0.33

Price to Sales (P/S)0.00

P/FCF Ratio0.83

Enterprise Value/Market Cap10.91

Enterprise Value/Revenue0.48

Enterprise Value/Gross Profit8.27

Enterprise Value/Ebitda2.22

Forecast

1Y Price Target

$1.00

Price Target Upside26.58% Upside

Rating ConsensusHold

Number of Analyst Covering1

Sotherly Hotels Business Overview & Revenue Model

Company DescriptionSotherly Hotels Inc. is a self-managed and self-administered lodging REIT focused on the acquisition, renovation, upbranding and repositioning of upscale to upper-upscale full-service hotels in the Southern United States. Currently, the Company's portfolio consists of investments in twelve hotel properties, comprising 3,156 rooms, as well as interests in two condominium hotels and their associated rental programs. The Company owns hotels that operate under the Hilton Worldwide, Hyatt Hotels Corporation, and Marriott International, Inc. brands, as well as independent hotels. Sotherly Hotels Inc. was organized in 2004 and is headquartered in Williamsburg, Virginia.

How the Company Makes MoneySotherly Hotels Inc. generates revenue primarily through the operation of its hotel properties. The company's income is derived from room bookings, food and beverage services, and other ancillary services offered at its hotels, such as event hosting and recreational activities. As a REIT, Sotherly also benefits from favorable tax treatments, as long as it complies with certain regulatory requirements, including the distribution of a significant portion of its taxable income as dividends. Additionally, Sotherly's revenue is influenced by strategic partnerships with major hotel brands, which help drive occupancy rates and premium pricing. The company's active asset management approach, including property renovations and brand repositioning, further supports its revenue growth by enhancing the attractiveness and market competitiveness of its hotel properties.

Sotherly Hotels Financial Statement Overview

Summary

Sotherly Hotels exhibits a mixed financial outlook with positive revenue growth and operational effectiveness but faces challenges with profitability and high leverage. Strong cash flow generation provides some stability, though financial risks remain due to debt levels and equity decline.

Income Statement

Positive

Sotherly Hotels has shown revenue growth, with a 4.8% increase from 2022 to 2023. However, it experienced a significant net loss in 2024, heavily impacting the net profit margin. EBIT margin improved, reflecting better operational efficiency, but the EBITDA margin was negative, indicating high depreciation and amortization costs.

Balance Sheet

Neutral

The company's debt-to-equity ratio is high, reflecting substantial leverage, which increases financial risk. Stockholders' equity has declined, affecting the equity ratio negatively. Return on equity has been inconsistent due to fluctuating net income.

Cash Flow

Positive

Operating cash flow has been strong, and the free cash flow turned positive in recent years, indicating potential for debt repayment and investments. The ratio of free cash flow to net income is favorable, although fluctuations in net income affect stability.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
181.89M	173.84M	166.08M	127.59M	71.50M
	Gross Profit
46.81M	44.79M	46.46M	30.89M	-3.22M
	EBIT
20.65M	18.93M	20.55M	4.72M	-29.75M
	EBITDA
39.09M	39.88M	39.78M	14.08M	-10.70M
	Net Income Common Stockholders
1.30M	3.94M	24.97M	-28.54M	-54.18M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
7.33B	17.10M	21.92M	13.17M	25.30M
	Total Assets
414.38B	393.44M	405.01M	436.05M	473.03M
	Total Debt
340.38M	317.53M	323.03M	377.91M	386.96M
	Net Debt
333.05M	300.42M	301.11M	364.74M	361.66M
	Total Liabilities
372.78B	345.54M	353.49M	419.55M	429.33M
	Stockholders Equity
43.05M	49.23M	52.25M	21.26M	49.08M
Cash Flow		Free Cash Flow
25.89M	21.40M	-1.31M	-854.34K	-15.28M
	Operating Cash Flow
25.89M	21.40M	6.66M	2.32M	-11.26M
	Investing Cash Flow
-14.14M	-6.73M	46.66M	-2.39M	-3.78M
	Financing Cash Flow
-9.27B	-15.78M	-51.55M	-9.66M	22.36M

Sotherly Hotels Technical Analysis

Technical Analysis Sentiment

Positive

Last Price0.79

Price Trends

50DMA

0.73

Positive

100DMA

0.79

Positive

200DMA

0.97

Negative

Market Momentum

MACD

0.02

Negative

RSI

57.73

Neutral

STOCH

63.25

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SOHO, the sentiment is Positive. The current price of 0.79 is above the 20-day moving average (MA) of 0.76, above the 50-day MA of 0.73, and below the 200-day MA of 0.97, indicating a neutral trend. The MACD of 0.02 indicates Negative momentum. The RSI at 57.73 is Neutral, neither overbought nor oversold. The STOCH value of 63.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SOHO.

Sotherly Hotels Risk Analysis

Sotherly Hotels disclosed 67 risk factors in its most recent earnings report. Sotherly Hotels 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

Sotherly Hotels Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CLDT	65 Neutral	$339.46M	120.31	1.42%	4.34%	1.75%	―
INN	64 Neutral	$536.97M	33.82	4.45%	7.64%	-1.86%	―
Sector *	60 Neutral	$2.76B	10.33	0.49%	8508.28%	5.95%	-17.56%
SOHO	60 Neutral	$31.89M	―	9.72%	―	3.82%	18.62%
BHR	60 Neutral	$138.79M	―	-0.90%	9.66%	-2.42%	23.64%
IHT	44 Neutral	$28.44M	―	-25.66%	0.80%	4.55%	-291.14%
AHT	41 Neutral	$35.40M	―	-25.85%	―	-14.65%	-55.62%

* Real Estate Sector Average

Performance Comparison

SOHO

Sotherly Hotels

0.79

-0.62

-43.97%

INN

Summit Hotel Properties

4.15

-1.55

-27.19%

CLDT

Chatham Lodging

6.93

-1.28

-15.59%

AHT

Ashford Hospitality

6.04

-6.76

-52.81%

BHR

Braemar Hotels & Resorts

2.00

-0.59

-22.78%

IHT

InnSuites Hospitality

2.38

1.08

83.08%

Sotherly Hotels Earnings Call Summary

Earnings Call Date:May 13, 2025

(Q1-2025)

% Change Since: 0.00%|

Next Earnings Date:Aug 07, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted strong performance in RevPAR growth and urban market recovery, with strategic franchise agreements and renovations planned. However, challenges include ongoing disruptions in Tampa, adjusted FFO decline, debt maturities, and macroeconomic uncertainties impacting future guidance.

Q1-2025 Updates

Positive Updates

RevPAR Improvement

RevPAR increased 6.4% driven by a 6.4% increase in occupancy compared to 2024. Excluding Tampa, RevPAR increased 7.3%.

Key Asset Performance

DoubleTree Resort in Hollywood, Florida saw RevPAR up 11.9%. Hotel Ballast in Wilmington achieved a 6.5% increase in RevPAR. The Whitehall in Houston posted a 19.4% increase in RevPAR.

Urban Market Recovery

Significant occupancy gains in urban markets, with DoubleTree Philadelphia Airport seeing a 34.3% increase in RevPAR and a 38.7% increase in occupancy.

Corporate Activity and Future Plans

Two new 10-year franchise agreements with Hilton in Philadelphia and Jacksonville, with planned renovations totaling $26.1 million.

Hotel EBITDA Growth

Hotel EBITDA increased 9.4% over the prior year, with a 100 basis point increase in margins, excluding one-time benefits from the previous year.

Negative Updates

Tampa Property Disruption

Hotel Alba in Tampa continues to face operational disruptions due to Hurricane Helene, impacting elevator operations and potentially affecting future performance.

Adjusted FFO Decline

Adjusted FFO decreased by approximately $0.7 million from the same quarter last year.

Debt Maturity Challenges

Upcoming debt maturities for major assets in Atlanta and Hollywood, with broader uncertainty in the debt markets affecting refinancing options.

Macroeconomic Uncertainty

Emerging macroeconomic uncertainties, including policy changes, weakening consumer sentiment, and a pullback in government segment demand in Washington, D.C.

Potential Impact on Future Guidance

Given macroeconomic challenges, a more cautious view on operating fundamentals for the back half of the year is being adopted.

Company Guidance

During Sotherly Hotels' Q1 2025 conference call, the company reiterated its full-year guidance, projecting total revenue between $183.4 million and $188.2 million, representing a 2.1% increase at the midpoint over the prior year. Hotel EBITDA is expected to range from $48.8 million to $49.6 million, indicating a 5.2% increase, while adjusted FFO is projected between $11.5 million and $12.3 million, reflecting a 16.4% decrease. The company highlighted a RevPAR increase of 6.4% in Q1, driven by a 6.4% rise in occupancy, with ADR stable year-over-year. Excluding the impact of Hurricane Helene on the Tampa property, RevPAR rose by 7.3%. The call detailed significant gains in urban markets, notably a 34.3% RevPAR rise at DoubleTree Philadelphia Airport, and 19.4% at The Whitehall in Houston, emphasizing strong group business and special event demand. The company plans to spend $7.2 million on routine capital expenditures in 2025, with additional investments for renovations in Philadelphia and Jacksonville, totaling $11.4 million this year.

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.