AMERICAN HOTEL (HOT.UN) AI Stock Analysis

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AMERICAN HOTEL

(OTC:HOT.UN)

Rating:48Neutral

Price Target:

C$0.50

▲(8.70%Upside)

The overall stock score reflects significant financial challenges, including high leverage and negative profitability, as well as bearish technical indicators. Despite some positive developments in revenue growth and debt refinancing, the company's financial position remains strained. The negative valuation metrics further dampen the stock's attractiveness.

AMERICAN HOTEL (HOT.UN) vs. iShares MSCI Canada ETF (EWC)

Market Cap

C$34.72M

Dividend Yield4.24%

Average Volume (3M)56.85K

Price to Earnings (P/E)―

Beta (1Y)1.13

Revenue Growth-12.67%

EPS Growth25.05%

CountryCA

Employees11

SectorReal Estate

Sector Strength66

IndustryREIT - Hotel & Motel

Share Statistics

EPS (TTM)N/A

Shares Outstanding76,313,194

10 Day Avg. Volume66,065

30 Day Avg. Volume56,853

Financial Highlights & Ratios

PEG Ratio-0.01

Price to Book (P/B)0.26

Price to Sales (P/S)0.00

P/FCF Ratio55.88

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

C$0.70

Price Target Upside51.85% Upside

Rating ConsensusHold

Number of Analyst Covering1

AMERICAN HOTEL Business Overview & Revenue Model

Company DescriptionAmerican Hotel Income Properties REIT LP (TSX: HOT.UN, TSX: HOT.U, TSX: HOT.DB.U), or AHIP, is a limited partnership formed to invest in hotel real estate properties across the United States. AHIP's 78 premium branded, select-service hotels are located in secondary metropolitan markets that benefit from diverse and stable demand. AHIP hotels operate under brands affiliated with Marriott, Hilton, IHG and Choice Hotels through license agreements. The Company's long-term objectives are to build on its proven track record of successful investment, deliver monthly U.S. dollar denominated distributions to unitholders, and generate value through the continued growth of its diversified hotel portfolio.

How the Company Makes MoneyAmerican Hotel Income Properties REIT LP makes money primarily through the ownership and operation of its portfolio of hotel properties. The company's revenue model is centered on generating income from room bookings, food and beverage sales, and other hotel services offered to guests. Key revenue streams include room rental income, which is influenced by occupancy rates and average daily rates, and ancillary services such as conference hosting and catering. The company also benefits from strategic partnerships with major hotel brands, which enhance its properties' marketability and operational efficiency. Additionally, American Hotel Income Properties REIT LP may engage in property sales or refinancing to optimize its portfolio and generate additional income.

AMERICAN HOTEL Earnings Call Summary

Earnings Call Date:May 14, 2025

(Q1-2025)

% Change Since: -13.21%|

Next Earnings Date:Aug 12, 2025

Earnings Call Sentiment Neutral

While AHIP showed positive revenue growth and successful execution of its disposition program, financial metrics such as NOI margin and FFO displayed weaknesses. Debt refinancing achievements were notable, yet increased expenses and reduced cash reserves present ongoing challenges.

Q1-2025 Updates

Positive Updates

Revenue Growth

Total revenue grew by 1.2% with RevPAR finishing at $93, a 2.4% improvement over Q1 2024, driven by increased occupancy in extended stay and select service properties.

Successful Disposition Program

Completed the disposition of 3 hotel properties for total gross proceeds of $41.2 million and have 9 more properties under purchase and sales agreements for estimated total gross proceeds of $49.7 million.

Debt Refinancing Achievements

Completed 2 refinancings for total gross proceeds of $144.3 million, resulting in the full repayment of the senior credit facility and no further debt maturities until the fourth quarter of 2026.

Stability in Labor Costs

Wages, turnover, and productivity have stabilized with dependency on contract labor tapering off.

Negative Updates

NOI Margin Decline

NOI margin decreased by 107 basis points to 27.5%, impacted by higher operating expenses due to general cost inflation.

Negative FFO

Normalized diluted funds from operations (FFO) was negative $0.02 per unit for the quarter, compared to $0.02 per unit in Q1 2024.

Reduced Cash Balance

Unrestricted cash balance decreased from $27.9 million at the end of 2024 to $17.8 million at the end of March 2025.

Increased Undistributed Expenses

Undistributed expenses, particularly labor, remain elevated, alongside significant increases in utility expenses and repairs.

Company Guidance

During American Hotel Income Properties REIT LP's first quarter call for fiscal year 2025, CEO Jonathan Korol reported a 1.2% increase in total revenue and a RevPAR of $93, marking a 2.4% improvement from Q1 2024. However, the NOI margin declined by 107 basis points to 27.5% due to increased operating expenses and occupancy-driven RevPAR growth. The company's disposition program resulted in the sale of three hotel properties for $41.2 million, with nine more properties under purchase agreements expected to yield $49.7 million. AHIP completed two refinancings totaling $144.3 million, which enabled full repayment of their senior credit facility. Despite a negative FFO of $0.02 per unit, AHIP has no debt maturities until Q4 2026 and plans to address future obligations by raising capital through potential further hotel sales and recapitalization efforts over the next 12 to 18 months.

AMERICAN HOTEL Financial Statement Overview

Summary

AMERICAN HOTEL faces challenges with declining revenue and a high debt burden impacting its financial flexibility. The company shows some operational stability with a positive EBIT margin but struggles with persistent net losses. Cash flow from operations remains positive, providing some liquidity support, yet the overall financial position is strained by high leverage and negative shareholder returns.

Income Statement

Neutral

The company showed declining revenue with a growth rate of -8.43% between 2023 and 2024. The gross profit margin decreased to 28.57% in 2024 from 29.72% in 2023, indicating pressure on profitability. The net profit margin remains negative, at -18.29% in 2024, showing significant net losses, although improved from -27.79% in 2023. The EBIT margin improved to 17.08% in 2024 from 17.26% in 2023, showing some stability in operational earnings.

Balance Sheet

Neutral

The debt-to-equity ratio is high at 3.11 in 2024, indicating significant leverage and potential financial risk. Stockholders' equity declined, reducing the equity ratio to 20.28% in 2024 from 19.83% in 2023, reflecting limited equity support and increased financial vulnerability. Return on equity remains negative due to continued net losses, highlighting ongoing challenges in generating shareholder returns.

Cash Flow

Neutral

Free cash flow improved slightly to $631K in 2024 from $5.56M in 2023. The operating cash flow to net income ratio is positive, indicating that operations are generating cash even amidst net losses. However, the free cash flow to net income ratio is low, reflecting limited free cash flow relative to the net loss.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
256.88M	280.52M	281.37M	241.31M	174.85M
	Gross Profit
73.42M	83.37M	51.20M	45.83M	3.16M
	EBIT
43.88M	48.42M	33.17M	45.83M	-16.03M
	EBITDA
32.48M	-3.61M	71.13M	69.05M	27.39M
	Net Income Common Stockholders
-46.98M	-77.97M	-35.11M	-11.85M	-65.77M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
27.84M	17.80M	12.95M	14.70M	20.15M
	Total Assets
685.11M	954.89M	1.05B	1.15B	1.19B
	Total Debt
431.63M	645.66M	688.44M	738.85M	782.31M
	Net Debt
403.78M	627.87M	675.49M	724.15M	762.16M
	Total Liabilities
501.09M	721.94M	730.69M	775.89M	852.19M
	Stockholders Equity
138.92M	189.38M	278.54M	331.03M	341.71M
Cash Flow		Free Cash Flow
631.00K	5.56M	16.66M	11.74M	-5.39M
	Operating Cash Flow
10.70M	30.85M	44.91M	17.95M	3.55M
	Investing Cash Flow
155.19M	2.64M	15.30M	-18.63M	-1.96M
	Financing Cash Flow
-155.85M	-28.63M	-61.96M	-4.34M	932.00K

AMERICAN HOTEL Technical Analysis

Technical Analysis Sentiment

Negative

Last Price0.46

Price Trends

50DMA

0.51

Negative

100DMA

0.58

Negative

200DMA

0.58

Negative

Market Momentum

MACD

-0.02

Positive

RSI

42.72

Neutral

STOCH

33.33

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:HOT.UN, the sentiment is Negative. The current price of 0.46 is below the 20-day moving average (MA) of 0.49, below the 50-day MA of 0.51, and below the 200-day MA of 0.58, indicating a bearish trend. The MACD of -0.02 indicates Positive momentum. The RSI at 42.72 is Neutral, neither overbought nor oversold. The STOCH value of 33.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:HOT.UN.

AMERICAN 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
Sector *	61 Neutral	$2.82B	10.88	0.42%	8438.92%	5.74%	-20.95%
INO.UN	54 Neutral	C$34.27M	―	-25.21%	7.55%	-22.78%	-19.14%
RPR.UN	53 Neutral	C$36.06M	―	-162.05%	1.79%	0.66%	-178.71%
HOT.UN	48 Neutral	C$34.72M	―	-53.87%	4.24%	-12.67%	25.05%
MPCT.UN	37 Underperform	C$51.18M	―	-5.93%	1.95%	-2.06%	43.41%

* Real Estate Sector Average

Performance Comparison

TSE:HOT.UN

AMERICAN HOTEL

0.45

-0.11

-19.64%

TSE:RPR.UN

Slate Office REIT

0.41

-0.12

-22.64%

TSE:MPCT.UN

Dream Impact Trust

2.80

-0.89

-24.12%

TSE:INO.UN

Inovalis REIT

0.98

-0.01

-1.01%

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.