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Monday, October 19, 2020

Investor Confidence is Rising for Extended Stay America Inc. (NASDAQ:STAY)

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Extended Stay America Inc. (STAY) shares are trading at higher $12.20 and the avg recommendation for the stock is Moderate Buy, while the current analyst price target stands at $14.68.

To add more color to this target, the company’s high over the last year is $15.29 and the low is $5.35. Over the last 52 weeks, STAY is down -16.15% while the S&P 500 is up 18.95%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, STAY reported a profit of $212.34 million. Extended Stay America Inc. also saw revenues increase to $230.83 million. In addition, STAY has free cash flow of $5.46 million as of 06-2020. The company’s EBITDA came in at $71.62 million which compares well with its peers.

STAY booked profit margins of -1.20%, its Return on Equity (ROE) is -1.90%, and its Return on Assets is -0.30%. All told, it is clear that, STAY needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. STAY has a short ratio of 1.80 and outstanding shares of 177.55M.

Company Outlook

STAY has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 1.13 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at -0.08. Extended Stay America Inc. STAY also noted assets of $4.35 billion at the end of the last quarter. Investors should also keep an eye on sector updates as STAY has historically followed its peers on positive news.

All told, Extended Stay America Inc. STAY has strung together solid data and demonstrated underlying fundamentals. At its current valuation, STAY represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Extended Stay America Inc. STAY is now commanding a market cap of 2.16B and a float of 155.81M. STAY is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of STAY stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in STAY, either long or short, and we have not been compensated for this article.

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