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1. Company Snapshot

1.a. Company Description

Summit Hotel Properties, Inc.is a publicly traded real estate investment trust focused on owning premium-branded hotels with efficient operating models primarily in the Upscale segment of the lodging industry.As of November 3, 2020, the Company's portfolio consisted of 72 hotels, 67 of which are wholly owned, with a total of 11,288 guestrooms located in 23 states.

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1.b. Last Insights on INN

Negative drivers behind Summit Hotel Properties' recent performance include a decline in hotel EBITDA margin, which contracted less than 50 basis points compared to the prior year, despite a 1.5% increase in same-store RevPAR. The company's ability to effectively manage expenses in a low revenue growth environment was compromised, resulting in a decrease in profitability. Additionally, the company's decision to complete a $275 million delayed draw term loan financing may have increased its debt burden, potentially limiting its financial flexibility. Furthermore, the company's recent dividend declaration of $0.08 per share may not be sufficient to meet investor expectations, given the current market conditions.

1.c. Company Highlights

2. Summit Hotel Properties' Q3 2025 Earnings: A Mixed Bag

Summit Hotel Properties reported adjusted FFO of $0.17 per share, beating analyst estimates of $0.14 per share. The company's adjusted EBITDA was $39.3 million. Same-store RevPAR declined 3.7% year-over-year, driven by a 3.4% decline in average daily rate. This decline was partially offset by the company's efforts to reduce costs and improve operational efficiency.

Publication Date: Nov -29

📋 Highlights
  • RevPAR Decline:: Same-store RevPAR dropped 3.7% YoY in Q3 2025, driven by a 3.4% decline in average daily rate.
  • Adjusted EBITDA & FFO:: EBITDA was $39.3 million; adjusted FFO reached $21.3 million or $0.17 per share.
  • Capital Recycling:: Sold two non-core hotels for $39 million and secured a $400 million term loan with a 50-basis-point spread reduction.
  • Dividend & Leverage:: Dividend payout ratio is 38% of trailing AFFO; GIC joint venture covers ~15% of annual corporate G&A expenses.

Operational Performance

The company's operational performance was impacted by a decline in RevPAR, but leisure demand trends have stabilized, and the company expects no further deterioration in the fourth quarter. In fact, the company sees better midweek performance, particularly in urban markets, driven by business transient-oriented customers. This is a positive sign, as it indicates that the company's efforts to diversify its customer base are paying off.

Capital Activities and Liquidity

Recent capital activities include the sale of two non-core hotels for $39 million, which will enhance liquidity and reduce debt. The company also completed a $400 million term loan with a 50-basis point reduction in spread. These actions demonstrate the company's commitment to maintaining a strong balance sheet and improving its financial flexibility.

Outlook and Valuation

The company expects fourth-quarter 2025 RevPAR growth to be down between 2% and 2.5% year-over-year, resulting in a full-year RevPAR decline of between 2.25% and 2.5%. Analysts estimate next year's revenue growth at 2.2%. With a P/S Ratio of 0.8 and an EV/EBITDA of 3.07, the company's valuation appears reasonable. Additionally, the dividend yield of 5.97% is attractive, especially given the company's commitment to returning capital to shareholders.

Growth Opportunities

For 2026, the company is optimistic about markets with special events, such as the World Cup in several cities and the Super Bowl in San Francisco. These events are expected to drive demand and RevPAR growth. The company's ability to capitalize on these opportunities will be crucial in driving future growth.

Portfolio Optimization

The company has sold 12 assets over the last couple of years and plans to continue recycling capital to evolve its portfolio to meet guest expectations. The company views the bottom 10% of its portfolio as candidates for sale, demonstrating its commitment to optimizing its portfolio and improving its overall performance.

3. NewsRoom

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Creative Medical Technology Holdings Announces World Health Organization Approval of “olastrocel” as INN for Lead Allogeneic Cell Therapy CELZ-201

Dec -02

Source: globenewswire.com

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Ensign Peak Advisors Inc Sells 26,350 Shares of Summit Hotel Properties, Inc. $INN

Dec -01

Source: defenseworld.net

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Commonwealth of Pennsylvania Public School Empls Retrmt SYS Sells 31,827 Shares of Summit Hotel Properties, Inc. $INN

Nov -29

Source: defenseworld.net

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Meet 33 Ideal "Safer" November Small/MidCap Value DiviBuys Of The S&P600

Nov -26

Source: seekingalpha.com

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SUMMIT HOTEL PROPERTIES PUBLISHES 2025 CORPORATE RESPONSIBILITY REPORT

Nov -11

Source: prnewswire.com

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Summit Hotel Properties, Inc. (INN) Q3 2025 Earnings Call Transcript

Nov -05

Source: seekingalpha.com

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Summit Hotel Properties (INN) Q3 FFO Surpass Estimates

Nov -04

Source: zacks.com

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SUMMIT HOTEL PROPERTIES REPORTS THIRD QUARTER 2025 RESULTS

Nov -04

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.17%)

6. Segments

Room

Expected Growth: 1.2%

The 1.2% growth in rooms from Summit Hotel Properties, Inc. is driven by increasing demand from business travelers, expansion in key markets, and strategic renovations to enhance guest experience. Additionally, the company's focus on operational efficiency and effective cost management has contributed to the growth.

Food and Beverage

Expected Growth: 0.8%

Summit Hotel Properties' Food and Beverage segment growth of 0.8% is driven by increasing average daily rates, higher occupancy rates, and a focus on premium offerings. Additionally, strategic partnerships and renovations to enhance the overall guest experience contribute to the segment's growth.

Other

Expected Growth: 1.1%

Summit Hotel Properties' 1.1% growth in 'Other' segment is driven by increasing demand for hotel amenities, expansion of food and beverage services, and rising revenue from parking and other ancillary services. Additionally, strategic partnerships and effective cost management contribute to this growth.

7. Detailed Products

Hotel Rooms

Summit Hotel Properties, Inc. offers a wide range of hotel rooms, from standard king rooms to luxurious suites, providing comfortable accommodations for business and leisure travelers.

Food and Beverage Services

The company's hotels offer a variety of dining options, including on-site restaurants, bars, and room service, providing guests with convenient and delicious meal options.

Meeting and Event Spaces

Summit Hotel Properties, Inc. offers a range of meeting and event spaces, from intimate boardrooms to grand ballrooms, perfect for corporate events, weddings, and social gatherings.

Amenities and Services

The company's hotels offer a range of amenities and services, including fitness centers, pools, and business centers, designed to enhance the guest experience.

Loyalty Program

Summit Hotel Properties, Inc. offers a loyalty program, rewarding repeat guests with points and perks, enhancing their overall hotel experience.

8. Summit Hotel Properties, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Summit Hotel Properties, Inc. is medium due to the presence of alternative accommodations such as Airbnb and vacation rentals.

Bargaining Power Of Customers

The bargaining power of customers for Summit Hotel Properties, Inc. is low due to the fragmented nature of the hospitality industry and the lack of concentration among customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Summit Hotel Properties, Inc. is medium due to the presence of multiple suppliers for goods and services, but the company's dependence on a few key suppliers for certain items.

Threat Of New Entrants

The threat of new entrants for Summit Hotel Properties, Inc. is high due to the relatively low barriers to entry in the hospitality industry and the increasing popularity of boutique hotels and Airbnb.

Intensity Of Rivalry

The intensity of rivalry for Summit Hotel Properties, Inc. is high due to the highly competitive nature of the hospitality industry, with many established players and a high level of competition for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 61.09%
Debt Cost 6.08%
Equity Weight 38.91%
Equity Cost 13.71%
WACC 9.05%
Leverage 157.01%

11. Quality Control: Summit Hotel Properties, Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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RLJ Lodging

A-Score: 6.1/10

Value: 8.3

Growth: 4.7

Quality: 6.1

Yield: 8.0

Momentum: 2.5

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
Summit Hotel Properties

A-Score: 5.8/10

Value: 7.4

Growth: 5.6

Quality: 5.5

Yield: 8.0

Momentum: 3.0

Volatility: 5.3

1-Year Total Return ->

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DiamondRock Hospitality

A-Score: 5.7/10

Value: 5.3

Growth: 5.0

Quality: 4.9

Yield: 7.0

Momentum: 3.5

Volatility: 8.3

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Sunstone Hotel Investors

A-Score: 5.2/10

Value: 5.0

Growth: 4.1

Quality: 4.9

Yield: 6.0

Momentum: 3.5

Volatility: 7.7

1-Year Total Return ->

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Xenia Hotels & Resorts

A-Score: 5.1/10

Value: 5.5

Growth: 4.7

Quality: 3.5

Yield: 6.0

Momentum: 4.0

Volatility: 7.0

1-Year Total Return ->

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SVC

A-Score: 4.9/10

Value: 9.8

Growth: 3.2

Quality: 5.2

Yield: 6.0

Momentum: 1.5

Volatility: 3.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

4.91$

Current Price

4.91$

Potential

-0.00%

Expected Cash-Flows