9% increase in the last six months, will it continue to rally?

Shares of Host Hotels & Resorts (HST) have risen nearly 9% in the last six months. So, in view of the low profitability of the company even in the growing lodging industry, let us now evaluate whether it is appropriate to bet on the stock. To read.

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Host Hotel & Resort, Inc. (HST) Bethesda, Md., The largest accommodation REIT and one of the leading owners of luxury and high-quality hotels. The company currently owns 75 facilities in the United States and five properties outside the United States, with a total of about 44,400 rooms. It has non-regulatory interests in seven domestic joint ventures and one foreign joint venture.

It reported revenue of $ 998 million for the quarter ended December 31, 2021, compared to $ 267 million in the previous year. In addition, the Hotel Real Estate Investment Trust was expected to report an FFO of $ 0.14 per share but actually achieved an FFO of $ 0.20, representing a 42.86% surprise. The company’s share price has risen 8.3% in the last six months and closed at .9 17.95 in yesterday’s trading session.

However, the stock has a record of weakness. Its price has dropped by 6.9% in the last three years. Furthermore, its revenue and EBITDA decreased by 19.3% CAGR and 28.6% in the last three years, respectively.

Here’s how to shape HST’s performance in the near term:

Poor profitability

HST’s trailing-12-month gross profit margin is 22.1% lower than the industry average of 67.6% to 67.4%. Also, the ROA of HST, Net income margin And ROC negative 0.09%, 0.38% and 0.63% respectively. Furthermore, its trailing-12-month EBITDA margin of 18.7% is lower than the industry average of 56.2% to 66.8%.

Impressive growth potential

Street expects HST’s revenue and EPS to increase 51.2% and 2100% year-over-year to $ 4.37 billion and $ 0.4, respectively, in its 2022 fiscal year. In addition, HST’s EPS is expected to grow at a CAGR of 28.4% over the next five years. Moreover, the company has a wonderful history of impressive earnings; It topped the Street EPS estimates in three of the last four quarters

POWR ratings reflect uncertainty

HST has an overall C rating, which is equivalent to a neutral we own POWR rating Method. POWR ratings are calculated taking into account 118 different factors, each factor weighing to an optimal degree.

Our proprietary rating system evaluates each stock based on eight different categories. HST has a D grade for stability and quality. Compatible with the stock’s 1.29 beta stability grade. In addition, its poor profitability is consistent with quality grades.

Of these, 19 stocks are F-rated REITs – Hotels Industry, HST is at number 8.

Beyond what I said above, you can see the HST rating for growth, speed, quality and feel Here.

The last row

While the growing investment in the HST business segment and the prospects for stable growth will strengthen its long-term prospects, its negative profit margins may cause investors concern. So, we believe that investors should wait for the prospects to stabilize before raising their shares.

How does Host Hotel and Resorts Inc. (HST) stack up against its peers?

Although HST has an overall C rating, no one can match its industry counterpart, Megaworld Corporation (MGAWY), Which has an overall B (Buy) rating.

HST shares were unchanged in pre-market trading on Friday. Year-to-date, HST rose 3.38%, compared to a -5.22% increase in the benchmark S&P 500 index over the same period.

About the Author: Pragya Pandey

Pragya is an equity research analyst and financial journalist with a passion for investing. In college he did a major in finance and is currently pursuing a CFA program and is a second tier candidate.

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