Taking everything into account, HT scores 3 out of 10 in our fundamental rating. HT was compared to 124 industry peers in the Diversified REITs industry. While HT seems to be doing ok healthwise, there are quite some concerns on its profitability. While showing a medium growth rate, HT is valued expensive at the moment.

Quickly go to:

1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

HT had positive earnings in the past year.
HT had a positive operating cash flow in the past year.

1.2 Ratios

HT has a Return On Assets (0.66%) which is comparable to the rest of the industry.
HT has a Return On Equity (1.40%) which is comparable to the rest of the industry.
HT has a worse Return On Invested Capital (1.68%) than 69.77% of its industry peers.

		Industry Rank	Sector Rank
ROA	0.66%
ROE	1.4%
ROIC	1.68%

ROA(3y)-1.59%

ROA(5y)-1.35%

ROE(3y)-7.91%

ROE(5y)-5.77%

ROIC(3y)N/A

ROIC(5y)N/A

1.3 Margins

HT's Profit Margin of 2.54% is in line compared to the rest of the industry. HT outperforms 44.19% of its industry peers.
In the last couple of years the Profit Margin of HT has grown nicely.
HT has a Operating Margin of 7.75%. This is amonst the worse of the industry: HT underperforms 83.72% of its industry peers.
HT's Operating Margin has declined in the last couple of years.
With a Gross Margin value of 30.04%, HT is not doing good in the industry: 90.70% of the companies in the same industry are doing better.
HT's Gross Margin has been stable in the last couple of years.

		Industry Rank	Sector Rank
OM	7.75%
PM (TTM)	2.54%
GM	30.04%

OM growth 3Y5.9%

OM growth 5Y-2.93%

PM growth 3YN/A

PM growth 5Y14.8%

GM growth 3Y1.03%

GM growth 5Y-0.4%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), HT is destroying value.
Compared to 1 year ago, HT has more shares outstanding
HT has a better debt/assets ratio than last year.

2.2 Solvency

Based on the Altman-Z score of 0.22, we must say that HT is in the distress zone and has some risk of bankruptcy.
HT has a worse Altman-Z score (0.22) than 71.32% of its industry peers.
HT has a debt to FCF ratio of 25.66. This is a negative value and a sign of low solvency as HT would need 25.66 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 25.66, HT is doing good in the industry, outperforming 62.79% of the companies in the same industry.
A Debt/Equity ratio of 0.88 indicates that HT is somewhat dependend on debt financing.
HT has a Debt to Equity ratio of 0.88. This is in the better half of the industry: HT outperforms 62.79% of its industry peers.

		Industry Rank	Sector Rank
Debt/Equity	0.88
Debt/FCF	25.66
Altman-Z	0.22

ROIC/WACC0.24

WACC7.12%

2.3 Liquidity

HT has a Current Ratio of 2.39. This indicates that HT is financially healthy and has no problem in meeting its short term obligations.
HT's Current ratio of 2.39 is amongst the best of the industry. HT outperforms 82.95% of its industry peers.
A Quick Ratio of 2.39 indicates that HT has no problem at all paying its short term obligations.
HT's Quick ratio of 2.39 is amongst the best of the industry. HT outperforms 82.95% of its industry peers.

		Industry Rank	Sector Rank
Current Ratio	2.39
Quick Ratio	2.39

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WACC

Debt/Equity

How to determine the health of a company

Altman-Z score

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3. Growth

3.1 Past

HT shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 110.56%, which is quite impressive.
The Earnings Per Share has been growing by 10.73% on average over the past years. This is quite good.
Looking at the last year, HT shows a very negative growth in Revenue. The Revenue has decreased by -10.28% in the last year.
Measured over the past years, HT shows a decrease in Revenue. The Revenue has been decreasing by -4.02% on average per year.

EPS 1Y (TTM)110.56%

EPS 3YN/A

EPS 5Y10.73%

EPS Q2Q%81.67%

Revenue 1Y (TTM)-10.28%

Revenue growth 3Y-8.51%

Revenue growth 5Y-4.02%

Sales Q2Q%-11.71%

3.2 Future

The Earnings Per Share is expected to grow by 64.16% on average over the next years. This is a very strong growth
Based on estimates for the next years, HT will show a decrease in Revenue. The Revenue will decrease by -0.82% on average per year.

EPS Next Y-41.37%

EPS Next 2Y-13.42%

EPS Next 3Y64.16%

EPS Next 5YN/A

Revenue Next Year-10.87%

Revenue Next 2Y-3.54%

Revenue Next 3Y-0.82%

Revenue Next 5YN/A

3.3 Evolution

When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.

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4. Valuation

4.1 Price/Earnings Ratio

HT is valuated quite expensively with a Price/Earnings ratio of 58.76.
HT's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of HT to the average of the S&P500 Index (28.60), we can say HT is valued expensively.
HT is expected to report negative earnings next year, which makes the Forward Price/Earnings Ratio negative.

		Industry Rank	Sector Rank
PE	58.76
Fwd PE	N/A

4.2 Price Multiples

89.15% of the companies in the same industry are more expensive than HT, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of HT indicates a somewhat cheap valuation: HT is cheaper than 74.42% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	17.74
EV/EBITDA	9.78

4.3 Compensation for Growth

HT's earnings are expected to grow with 64.16% in the coming years. This may justify a more expensive valuation.

PEG (NY)N/A

PEG (5Y)5.48

EPS Next 2Y-13.42%

EPS Next 3Y64.16%

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5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 2.00%, HT has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 6.82, HT's dividend is way lower than its industry peers. On top of this 85.27% of the companies listed in the same industry pay a better dividend than HT!
HT's Dividend Yield is comparable with the S&P500 average which is at 1.82.

		Industry Rank	Sector Rank
Dividend Yield	2%

5.2 History

The dividend of HT decreases each year by -19.88%.
HT has been paying a dividend for at least 10 years, so it has a reliable track record.

Dividend Growth(5Y)-19.88%

Div Incr Years0

Div Non Decr Years0

5.3 Sustainability

HT pays out 618.48% of its income as dividend. This is not a sustainable payout ratio.

DP618.48%

EPS Next 2Y-13.42%

EPS Next 3Y64.16%

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Hersha Hospitality Trust / HT FAQ

Can you provide the ChartMill fundamental rating for Hersha Hospitality Trust?

ChartMill assigns a fundamental rating of 4 / 10 to HT.

What is the valuation status for HT stock?

ChartMill assigns a valuation rating of 3 / 10 to Hersha Hospitality Trust (HT). This can be considered as Overvalued.

How profitable is Hersha Hospitality Trust (HT) stock?

Hersha Hospitality Trust (HT) has a profitability rating of 3 / 10.

What is the valuation of Hersha Hospitality Trust based on its PE and PB ratios?

The Price/Earnings (PE) ratio for Hersha Hospitality Trust (HT) is 58.76 and the Price/Book (PB) ratio is 0.61.

Is the dividend of Hersha Hospitality Trust sustainable?

The dividend rating of Hersha Hospitality Trust (HT) is 2 / 10 and the dividend payout ratio is 618.48%.