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Chatham Lodging (CLDT)
NYSE:CLDT
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Chatham Lodging
(NYSE:CLDT)
66Neutral
Positive Factors
Financial Performance
4Q results beat with adjusted FFO/EBITDA of $0.20/$21.1mm topping consensus of $0.16/$20.0mm.
Margin Improvement
Despite increased cost pressures, CLDT's margins increased 90bps year over year in Q4.
Negative Factors
2025 EBITDA Guidance
While 2025 EBITDA guidance was light, the shortfall was mostly related to hotel dispositions.
EBITDA Guidance
CLDT expects adjusted EBITDA/FFO of $92-97mm/$1.01-1.11, which is below consensus and includes an EBITDA headwind from hotel sales.
Chatham Lodging (CLDT) vs. S&P 500 (SPY)
Market Cap
$353.65M
Dividend Yield3.88%
Average Volume (3M)425.75K
Price to Earnings (P/E)―
Beta (1Y)1.18
Revenue Growth1.96%
EPS Growth27.47%
CountryUS
Employees17
SectorReal Estate
Sector Strength73
IndustryREIT - Hotel & Motel
Share Statistics
EPS (TTM)-0.08
Shares Outstanding48,982,502
10 Day Avg. Volume323,475
30 Day Avg. Volume425,748
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.15
Price to Cash Flow (P/CF)7.00
P/FCF Ratio12.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$10.67Price Target Upside47.78% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Chatham Lodging Business Overview & Revenue Model
Company DescriptionChatham Lodging Trust (CLDT) is a real estate investment trust (REIT) that specializes in investing in upscale extended-stay hotels and premium-branded select-service hotels. The company primarily focuses on acquiring properties in urban and high-demand locations across the United States. Chatham Lodging's portfolio includes renowned hotel brands such as Hilton, Marriott, and Hyatt, providing guests with quality accommodations and amenities tailored to both short-term and extended stays.
How the Company Makes MoneyChatham Lodging Trust generates revenue primarily through the ownership and operation of its hotel properties. The company's main revenue stream comes from hotel room rentals and associated services, which include food and beverage sales, conference and banquet facilities, and other guest services. Chatham Lodging's revenue model benefits from its strategic partnerships with leading hotel brands, which attract a loyal customer base and maintain high occupancy rates. By investing in properties located in economically robust and high-demand markets, Chatham ensures a steady flow of income through consistent hotel occupancy and competitive room rates. Additionally, the REIT structure allows Chatham to distribute a significant portion of its taxable income to shareholders as dividends, providing an attractive return on investment.
Chatham Lodging Financial Statement Overview
Summary
Chatham Lodging demonstrates stability with steady revenue growth and improved operational efficiency, as seen in the improving EBIT and EBITDA margins. The balance sheet shows moderate leverage and a strong equity base. However, challenges remain in enhancing profitability and shareholder returns, as indicated by the low net profit margin and return on equity. Cash generation is strong, but growth in cash reserves is limited.Income Statement
Chatham Lodging has shown moderate revenue growth with a 1.96% increase from the previous year. The gross profit margin is consistent, but the net profit margin remains low at 1.31%, indicating limited profitability. The EBIT and EBITDA margins have improved, suggesting better operational efficiency, yet overall profitability remains constrained.65
Positive
Balance Sheet
The company maintains a reasonable debt-to-equity ratio of 0.56, reflecting moderate leverage. The equity ratio stands at 60.41%, indicating a stable financial foundation. Return on equity is low at 0.55%, suggesting limited returns for shareholders despite a stable equity base.70
Positive
Cash Flow
Chatham Lodging has a robust operating cash flow to net income ratio of 17.72, demonstrating strong cash generation relative to earnings. The free cash flow to net income ratio is also healthy. However, free cash flow growth is absent, indicating potential challenges in expanding cash reserves.75
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 317.21M | 311.11M | 294.85M | 203.97M | 144.92M | Gross Profit |
| 111.22M | 110.93M | 111.56M | 59.13M | 22.33M | EBIT |
| 33.22M | 28.61M | 36.45M | -12.54M | -43.10M | EBITDA |
| 94.25M | 86.66M | 95.02M | 58.46M | 3.83M | Net Income Common Stockholders |
| 4.17M | 2.64M | -16.78M | -40.93M | -92.34M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 20.20M | 68.13M | 26.27M | 19.19M | 21.12M | Total Assets |
| 1.25B | 1.34B | 1.34B | 1.41B | 1.37B | Total Debt |
| 427.48M | 504.88M | 491.99M | 566.99M | 632.00M | Net Debt |
| 407.29M | 436.75M | 465.72M | 547.80M | 610.88M | Total Liabilities |
| 462.68M | 539.55M | 525.74M | 596.51M | 677.80M | Stockholders Equity |
| 758.22M | 776.06M | 794.89M | 797.50M | 677.75M |
| Cash Flow | Free Cash Flow | |||
| 73.83M | 76.44M | 55.87M | 19.27M | -34.45M | Operating Cash Flow |
| 73.83M | 76.44M | 71.53M | 28.78M | -19.96M | Investing Cash Flow |
| -29.17M | -28.11M | 29.96M | -101.94M | 26.81M | Financing Cash Flow |
| -100.56M | -7.73M | -86.21M | 71.58M | 4.43M |
Chatham Lodging Technical Analysis
Negative
7.22
Price Trends
8.09
Negative
8.50
Negative
8.35
Negative
Market Momentum
-0.27
Positive
28.18
Positive
-0.82
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CLDT, the sentiment is Negative. The current price of 7.22 is below the 20-day moving average (MA) of 7.59, below the 50-day MA of 8.09, and below the 200-day MA of 8.35, indicating a bearish trend. The MACD of -0.27 indicates Positive momentum. The RSI at 28.18 is Positive, neither overbought nor oversold. The STOCH value of -0.82 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CLDT.
Chatham Lodging Risk Analysis
Chatham Lodging disclosed 61 risk factors in its most recent earnings report. Chatham Lodging 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
Chatham Lodging Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $3.09B | 14.50 | 6.50% | 7.46% | 6.52% | 14.45% | |
68 Neutral | $2.20B | 10.80 | 5.68% | 9.17% | -3.67% | 122.68% | |
66 Neutral | $353.65M | ― | 0.53% | 3.88% | 1.96% | 27.47% | |
61 Neutral | $4.70B | 17.65 | -3.00% | 11.43% | 5.99% | -19.07% | |
58 Neutral | $1.22B | ― | -0.16% | 0.39% | 2.35% | 57.81% | |
58 Neutral | $1.22B | 29.30 | 2.94% | 6.23% | 3.31% | -15.16% | |
54 Neutral | $1.20B | 76.64 | 1.24% | 4.06% | 1.33% | -10.65% |
* Real Estate Sector Average
Performance Comparison
CLDT
Chatham Lodging
7.13
-2.41
-25.26%
PEB
Pebblebrook Hotel
10.13
-4.99
-33.00%
RLJ
RLJ Lodging
7.89
-3.01
-27.61%
XHR
Xenia Hotels & Resorts
11.81
-2.54
-17.70%
APLE
Apple Hospitality REIT
12.91
-2.27
-14.95%
PK
Park Hotels & Resorts
10.90
-5.03
-31.58%
Chatham Lodging Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -9.64% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong RevPAR growth, improved operating margins, successful asset sales, and significant debt reduction, contributing to a positive outlook. However, challenges such as the decline in the Dallas market, softening leisure travel, and increased payroll-related costs were noted. Overall, the positive achievements outweighed the lowlights, pointing toward a robust financial position and future growth prospects.Highlights
Strong RevPAR Growth
Achieved a RevPAR growth of 4% in the fourth quarter, beating industry performance. Silicon Valley hotels experienced a 14% increase in RevPAR, showcasing strong demand in tech markets.
Improved Operating Margins
Operating margins increased by 150 basis points to 41%, the highest fourth quarter operating margins in three years, due to effective expense control and moderating labor costs.
Successful Asset Sales and Debt Reduction
Sold or under contract to sell six hotels for $101 million, reducing net debt by $29 million in 2024. Overall leverage ratio reduced to 23% from 25% a year ago, down from 35% in 2019.
GRESB Recognition
Participated in the Global Real Estate Sustainability Benchmark, achieving a score of 83 and earning four out of five GRESB stars, demonstrating commitment to sustainability.
Dividend Returns
Returned $22 million in dividends to preferred common shareholders, indicating strong cash flow management and shareholder returns.
Lowlights
Decline in Dallas Market
RevPAR in Dallas declined due to the nearby convention center being closed for expansion over the next 24 months.
Challenges in Leisure Travel
RevPAR growth in leisure-focused hotels was only 1% from June through August, reflecting softening leisure travel.
Wage and Benefit Cost Increases
Payroll-related costs such as medical insurance, workers' compensation, and vacation were up 19% in the fourth quarter and almost 25% for the entire year.
Company Guidance
During the Chatham Lodging Trust Fourth Quarter 2024 financial results call, the company outlined several key metrics and achievements for the year. RevPAR growth was strong at 3%, beating industry performance for three consecutive years and culminating in a 4% rise in the fourth quarter alone. Operating margins expanded by 150 basis points, driven by moderating labor and benefit costs. The company successfully sold or is under contract to sell six older hotels with a RevPAR of $98, for net proceeds of $101 million at a 6% capitalization rate. This contributed to a reduction in net debt by $29 million in 2024, following a $26 million reduction in 2023, bringing the leverage ratio down to 23% from 25% the previous year and from nearly 35% in 2019. Chatham Lodging Trust also achieved a GRESB score of 83, earning four out of five stars, and returned $22 million in dividends to shareholders. Looking ahead, the company anticipates RevPAR growth of 1% to 3.5% for 2025, with adjusted EBITDA projected between $92 million to $97 million and a focus on reinvesting sale proceeds into higher-yielding assets.Chatham Lodging Corporate Events
Executive/Board Changes
Chatham Lodging Trustee Robert Perlmutter Announces Retirement
Neutral
Mar 17, 2025
On March 17, 2025, Robert Perlmutter, an independent trustee of Chatham Lodging Trust, announced his decision to retire from the board at the end of his current term and not seek reelection at the company’s annual meeting later this year. His decision was not due to any disagreement with the company.
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.