Extended Stay America, Inc. STAY operates hotels in the United States and Canada. Along with ESH Hospitality, Inc. the company is poised to grow its revenue per available room (RevPAR) via various initiatives.
These initiatives include better service, improving margins through operational efficiency, increasing brand awareness through targeted marketing efforts and upgrading properties to optimize returns. The recently completed renovation activities are likely to boost occupancy going forward too. However, we note that the company’s lack of exposure to emerging markets might limit its revenue growth potential. Low corporate demand could continue to hurt performance too.
Investors should note that the consensus estimate for STAY has not witnessed any movement over the last 30 days. Meanwhile, the company posted positive earnings surprises in two of the last four quarters, with an average beat of 14.21%.
STAY currently has a Zacks Rank #2 (Buy) but that could change following Extended Stay’s earnings report which was just released. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
We have highlighted some of the key stats from this just-revealed announcement below:
Earnings: STAY surpassed earnings. Our consensus earnings estimate called for earnings per share of 17 cents, and the company reported earnings of 19 cents per share. Investors should note that these figures take out stock option expenses.
Revenues: STAY reported revenues of $302.5 million. This beat our consensus estimate of $301.1 million.
Key Stats to Note: Comparable revenue per available room (RevPAR) increased 3.3% year over year in fourth-quarter 2017, driven by a 4.7% improvement in average daily rate (ADR), partially offset by 100 basis points (bps) decrease in occupancy. Meanwhile, hotel operating margin decreased 210 bps to 53%.
Extended Stay America, Inc. Price and EPS Surprise
Stock Price Impact: In-active in pre-market trading.
Check back later for our full write up on this STAY earnings report!
Zacks Top 10 Stocks for 2018
In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-hold tickers for the entirety of 2018?
Last year's 2017 Zacks Top 10 Stocks portfolio produced double-digit winners, including FMC Corp. and VMware which racked up stellar gains of +67.9% and +61%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
Access Zacks Top 10 Stocks for 2018 today >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment