RLJ Lodging (RLJ) AI Stock Analysis

• Market Cap: $1.04B
• Dividend Yield: 8.08%
• Average Volume (3M): 3.05M
• Price to Earnings (P/E): 24.9
• Beta (1Y): 1.09
• Revenue Growth: 3.31%
• EPS Growth: -15.16%
• Country: US
• Employees: 73
• Sector: Real Estate
• Sector Strength: 74
• Industry: REIT - Hotel & Motel
• EPS (TTM): 0.27
• Shares Outstanding: 151,706,340
• 10 Day Avg. Volume: 3,765,765
• 30 Day Avg. Volume: 3,045,276
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.93
• Price to Cash Flow (P/CF): 4.50
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $9.33
• Price Target Upside: 40.72% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

RLJ Lodging Trust has a solid financial foundation with strong revenue growth and a debt-free balance sheet, supporting its resilience. However, technical indicators suggest limited upward momentum, and valuation metrics indicate potential overvaluation concerns. Positive sentiments from the earnings call, including RevPAR growth and shareholder returns, provide some optimism. Overall, the stock is moderately attractive, with strengths in financial stability and earnings outlook offset by valuation and technical challenges.

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 comes from room rentals, which includes income from nightly stays by guests at its hotels. Additional revenue is earned from food and beverage sales, meeting room rentals, and other ancillary services provided at its hotel locations. RLJ's strategic partnerships with major hotel brands enhance its revenue potential by attracting a steady flow of customers who are loyal to those brands. The company also benefits from economies of scale and operational efficiencies gained through its extensive portfolio of properties.

RLJ Lodging Financial Statement Overview

Summary

RLJ Lodging displays 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. Cash flow generation is adequate, though there is room for improvement in profitability and free cash flow growth to enhance financial resilience and shareholder returns.

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
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.37B	1.33B	1.19B	785.66M	473.09M
	Gross Profit
1.37B	390.46M	362.26M	185.29M	-21.94M
	EBIT
0.00	331.88M	135.56M	-57.11M	-257.09M
	EBITDA
359.46M	354.64M	320.44M	130.67M	-66.53M
	Net Income Common Stockholders
42.91M	76.41M	41.92M	-311.09M	-408.80M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
409.81M	516.67M	481.32M	665.34M	899.81M
	Total Assets
4.88B	4.92B	4.98B	5.15B	5.62B
	Total Debt
2.34B	2.34B	2.33B	2.53B	2.71B
	Net Debt
-409.81M	1.83B	1.85B	1.87B	1.81B
	Total Liabilities
2.59B	2.57B	2.55B	2.74B	2.93B
	Stockholders Equity
2.28B	2.34B	2.41B	2.40B	2.67B
Cash Flow		Free Cash Flow
285.42M	315.14M	132.24M	-5.30M	-242.04M
	Operating Cash Flow
285.42M	315.14M	256.52M	42.96M	-168.71M
	Investing Cash Flow
-275.73M	-134.75M	-135.51M	-24.63M	-66.69M
	Financing Cash Flow
-131.69M	-161.45M	-298.49M	-239.25M	243.03M

RLJ Lodging Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.63
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 6.63 is below the 20-day moving average (MA) of 8.13, below the 50-day MA of 8.88, and below the 200-day MA of 9.12, indicating a bearish trend. The MACD of -0.34 indicates Positive momentum. The RSI at 32.89 is Neutral, neither overbought nor oversold. The STOCH value of 4.37 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RLJ.

RLJ Lodging Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HST	74 Outperform	$9.19B	13.27	10.53%	6.09%	7.02%	-4.78%
APLE	72 Outperform	$2.75B	12.97	6.50%	8.34%	6.52%	14.45%
Sector *	61 Neutral	$4.43B	16.22	-3.23%	11.37%	6.25%	-21.19%
DRH	60 Neutral	$1.47B	38.62	2.98%	2.43%	5.12%	-49.88%
RLJ	58 Neutral	$1.04B	24.88	2.94%	8.08%	3.31%	-15.16%
PEB	58 Neutral	$1.01B	―	-0.16%	0.47%	2.35%	57.81%
XHR	54 Neutral	$995.09M	63.66	1.24%	5.10%	1.33%	-10.65%

RLJ Lodging Corporate Events

RLJ Lodging CFO Sean Mahoney Announces Retirement

Sean Mahoney, the Executive Vice President and Chief Financial Officer of RLJ Lodging Trust, announced his retirement effective May 2025, after seven years with the company and over 30 years in the hospitality REIT industry. His departure is not due to any disagreement with the company, and he will assist in the transition process until his retirement. RLJ Lodging Trust has initiated a succession process to find his replacement, ensuring continued stability and strategic positioning in the industry.

RLJ Lodging Signs New Employment Agreement with Chairman

On February 18, 2025, RLJ Lodging Trust announced that it had entered into an amended and restated employment agreement with Robert L. Johnson, the Executive Chairman of the Company’s Board of Trustees, effective November 1, 2024. The agreement, which maintains similar terms to previous arrangements, will keep Mr. Johnson in his role for a three-year term with specified compensation packages and potential bonuses, as well as options for equity grants. The agreement also outlines severance, non-competition, and non-solicitation terms, impacting the company’s executive stability and leadership continuity.