RLJ Lodging Trust Common Shares of Beneficial Interest $0.01 par value (RLJ)

FairStock Score: 31/100 — RISKY

Key Financials

Strengths

• Generates $194 million in annual free cash flow (16.1% yield on market cap)
• Strong Piotroski F-Score of 8/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• Attractive 7.6% dividend yield providing steady income returns

Concerns

• Trades significantly above Graham Number ($2) with negative 339% margin of safety—limited downside protection
• Currently unprofitable—sustained losses could lead to dilutive capital raises or balance sheet deterioration
• Revenue declining at 0.4% year-over-year signals potential demand weakness or market share loss
• Altman Z-Score of 0.1 places it in the financial distress zone—elevated bankruptcy risk

AI Analysis

RLJ Lodging Trust Common Shares of Beneficial Interest $0.01 par value is a micro-cap real estate company valued at $1.2 billion. Revenue stands at $1.3 billion, though the company is currently unprofitable. From a quality standpoint, RLJ shows near-perfect Piotroski F-Score of 8/9 indicating exceptional financial health and distressed Altman Z-Score of 0.1 warrants caution. On valuation, the stock is commanding a steep 795.0x multiple, with trades far above its Graham Number ($2) with no margin of safety. Growth dynamics show revenue growing at -0.4% and profit growth of -92.0%. The 7.6% dividend yield adds an income component for patient holders. Our composite FairStock Score of 31/100 reflects below-average fundamentals overall. Without profitability, this remains speculative—suitable only for those with high risk tolerance and a long time horizon.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $194 million in annual free cash flow (16.1% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 795x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer