NasdaqGS:STAY

Stock Analysis Report

Executive Summary

Extended Stay America, Inc., together with its subsidiaries, owns, operates, and manages hotels in the United States.

Rewards

Trading at 62.6% below its fair value

Risk Analysis

Earnings are forecast to decline by an average of -30% per year for the next 3 years

Interest payments are not well covered by earnings

Dividend of 6.42% is not well covered by earnings or forecast to be in the next 3 years



Snowflake Analysis

Undervalued with questionable track record.


Similar Companies

Share Price & News

How has Extended Stay America's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: STAY has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.3%

STAY

0.7%

US Hospitality

0.7%

US Market


1 Year Return

-16.4%

STAY

14.5%

US Hospitality

18.2%

US Market

Return vs Industry: STAY underperformed the US Hospitality industry which returned 14.5% over the past year.

Return vs Market: STAY underperformed the US Market which returned 18.2% over the past year.


Shareholder returns

STAYIndustryMarket
7 Day-0.3%0.7%0.7%
30 Day-2.5%1.9%1.5%
90 Day-5.1%1.6%5.0%
1 Year-11.6%-16.4%17.5%14.5%20.8%18.2%
3 Year1.4%-12.6%33.9%24.6%45.2%35.8%
5 Year0.4%-21.7%50.2%34.1%71.6%52.7%

Price Volatility Vs. Market

How volatile is Extended Stay America's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Extended Stay America undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: STAY ($14.33) is trading below our estimate of fair value ($38.36)

Significantly Below Fair Value: STAY is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: STAY is good value based on its PE Ratio (14.9x) compared to the Hospitality industry average (22.4x).

PE vs Market: STAY is good value based on its PE Ratio (14.9x) compared to the US market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: STAY's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: STAY is good value based on its PB Ratio (2.1x) compared to the US Hospitality industry average (2.4x).


Next Steps

Future Growth

How is Extended Stay America forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

-30.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: STAY's earnings are forecast to decline over the next 3 years (-30% per year).

Earnings vs Market: STAY's earnings are forecast to decline over the next 3 years (-30% per year).

High Growth Earnings: STAY's earnings are forecast to decline over the next 3 years.

Revenue vs Market: STAY's revenue is expected to decline over the next 3 years (-0.3% per year).

High Growth Revenue: STAY's revenue is forecast to decline over the next 3 years (-0.3% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: STAY's Return on Equity is forecast to be low in 3 years time (17.8%).


Next Steps

Past Performance

How has Extended Stay America performed over the past 5 years?

2.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: STAY has high quality earnings.

Growing Profit Margin: STAY's current net profit margins (15%) are lower than last year (16.6%).


Past Earnings Growth Analysis

Earnings Trend: STAY's earnings have grown by 2.1% per year over the past 5 years.

Accelerating Growth: STAY's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: STAY had negative earnings growth (-15%) over the past year, making it difficult to compare to the Hospitality industry average (-16.7%).


Return on Equity

High ROE: STAY's Return on Equity (14.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Extended Stay America's financial position?


Financial Position Analysis

Short Term Liabilities: STAY's short term assets ($526.2M) exceed its short term liabilities ($232.9M).

Long Term Liabilities: STAY's short term assets ($526.2M) do not cover its long term liabilities ($2.7B).


Debt to Equity History and Analysis

Debt Level: STAY's debt to equity ratio (208.4%) is considered high.

Reducing Debt: STAY's debt to equity ratio has reduced from 209.1% to 208.4% over the past 5 years.

Debt Coverage: STAY's debt is not well covered by operating cash flow (15.4%).

Interest Coverage: STAY's interest payments on its debt are not well covered by EBIT (2.9x coverage).


Balance Sheet

Inventory Level: STAY has a high level of physical assets or inventory.

Debt Coverage by Assets: STAY's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

What is Extended Stay America's current dividend yield, its reliability and sustainability?

6.42%

Current Dividend Yield


Dividend Yield vs Market

company6.4%marketbottom25%1.4%markettop25%3.7%industryaverage3.1%forecastin3Years6.3%

Current dividend yield vs market & industry

Notable Dividend: STAY's dividend (6.42%) is higher than the bottom 25% of dividend payers in the US market (1.43%).

High Dividend: STAY's dividend (6.42%) is in the top 25% of dividend payers in the US market (3.7%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, STAY has been paying a dividend for less than 10 years.

Growing Dividend: STAY's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (94.8%), STAY's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: STAY's dividends in 3 years are not forecast to be well covered by earnings (92.7% payout ratio).


Next Steps

Management

What is the CEO of Extended Stay America's salary, the management and board of directors tenure and is there insider trading?

2.6yrs

Average management tenure


CEO

Bruce Haase (59yo)

0.08yrs

Tenure

0

Mr. Bruce N. Haase has been a Director of ESH Hospitality, Inc. since April 5, 2018 and serves as its President and Chief Executive Officer since November 22, 2019. He serves as Director, President and Chi ...


Management Age and Tenure

2.6yrs

Average Tenure

50.5yo

Average Age

Experienced Management: STAY's management team is considered experienced (2.6 years average tenure).


Board Age and Tenure

2.6yrs

Average Tenure

61yo

Average Age

Experienced Board: STAY's board of directors are not considered experienced ( 2.6 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: STAY insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$108,11304 Dec 19
Bruce Haase
EntityIndividual
Role
Chief Executive Officer
President
Shares7,500
Max PriceUS$14.42
SellUS$103,95027 Aug 19
Kevin Henry
EntityIndividual
Role
Head of Human Resources
Executive VP & Chief Human Resources Officer
Shares7,500
Max PriceUS$13.86
BuyUS$9,97314 Aug 19
Ames Flynn
EntityIndividual
Shares695
Max PriceUS$14.35
BuyUS$143,00014 Aug 19
Brian Nicholson
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares10,000
Max PriceUS$14.30
BuyUS$147,64413 Aug 19
Brian Nicholson
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares10,000
Max PriceUS$14.76
BuyUS$146,29413 Aug 19
Jonathan Halkyard
EntityIndividual
Role
Senior Key Executive
Executive Officer
Shares10,000
Max PriceUS$14.63

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Bruce Haase (59yo)

    President

    • Tenure: 0.08yrs
  • Kevin Henry (51yo)

    Executive VP & Chief Human Resources Officer

    • Tenure: 5.3yrs
    • Compensation: US$2.05m
  • Jonathan Halkyard (54yo)

    Executive Officer

    • Tenure: 0.08yrs
    • Compensation: US$4.87m
  • Tom Buoy (50yo)

    Executive Vice President of Revenue

    • Tenure: 2.2yrs
    • Compensation: US$1.26m
  • Howard Weissman (50yo)

    Corporate Controller & Chief Accounting Officer

    • Tenure: 4.6yrs
    • Compensation: US$414.52k
  • Jim Alderman (54yo)

    Chief Asset Merchant

    • Tenure: 3.1yrs
    • Compensation: US$1.20m
  • David Kim

    Executive Vice President of Finance and Chief Investment Officer

    • Tenure: 0yrs
  • Rob Ballew

    Vice President of Investor Relations

    • Tenure: 0yrs
  • David Clarkson (47yo)

    VP of Financial Planning & Analysis and Treasurer

    • Tenure: 6.9yrs
    • Compensation: US$1.01m
  • Brian Nicholson (49yo)

    Chief Financial Officer

    • Tenure: 1.6yrs
    • Compensation: US$1.22m

Board Members

  • Richard Wallman (68yo)

    Independent Director

    • Tenure: 6.4yrs
    • Compensation: US$203.04k
  • Bruce Haase (59yo)

    President

    • Tenure: 0.08yrs
  • Doug G. Geoga (63yo)

    Independent Chairman of the Board

    • Tenure: 6.4yrs
    • Compensation: US$158.54k
  • Tom O’Toole (61yo)

    Independent Director

    • Tenure: 2.6yrs
    • Compensation: US$193.67k
  • Jodie McLean (50yo)

    Independent Director

    • Tenure: 2.5yrs
    • Compensation: US$188.04k
  • Ellen Keszler (56yo)

    Independent Director

    • Tenure: 1.8yrs
    • Compensation: US$196.55k
  • Kapila Anand (65yo)

    Independent Director

    • Tenure: 3.4yrs
    • Compensation: US$142.91k

Company Information

Extended Stay America, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Extended Stay America, Inc.
  • Ticker: STAY
  • Exchange: NasdaqGS
  • Founded: 1995
  • Industry: Hotels, Resorts and Cruise Lines
  • Sector: Consumer Services
  • Market Cap: US$2.620b
  • Shares outstanding: 182.82m
  • Website: https://www.extendedstayamerica.com

Number of Employees


Location

  • Extended Stay America, Inc.
  • 11525 North Community House Road
  • Suite 100
  • Charlotte
  • North Carolina
  • 28277
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
STAYNasdaqGS (Nasdaq Global Select)YesPaired SharesUSUSDNov 2013
EA71DB (Deutsche Boerse AG)YesPaired SharesDEEURNov 2013

Biography

Extended Stay America, Inc., together with its subsidiaries, owns, operates, and manages hotels in the United States. As of February 27, 2019, the company had a network of 627 hotels. It serves customers i ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/10 00:33
End of Day Share Price2019/12/09 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.