Quarterly Net Loss and Lowered Guidance Might Change the Case for Investing in RLJ Lodging Trust (RLJ)
RLJ Lodging Trust reported a Q3 2025 net loss of US$3.74 million and revenue of US$330.05 million. The company lowered its full-year net income guidance to US$21.4-28.4 million. Despite ongoing share buybacks, reduced profit margins and revenue growth may impact the investment case. The Simply Wall St Community's fair value estimates for RLJ range from US$7.80 to US$10 per share, reflecting varied outlooks. Investors should consider RLJ's recent struggles to cover interest payments with earnings.
- RLJ Lodging Trust recently reported third quarter 2025 earnings, disclosing a decline in revenue to US$330.05 million and a net loss of US$3.74 million, while also providing updated guidance with full-year net income expected between US$21.4 million and US$28.4 million.
- The company’s ongoing share repurchase program has seen 586,417 shares bought back since May, reflecting management’s continued use of capital return initiatives even during weaker financial quarters.
- We’ll look at how RLJ Lodging Trust’s shift to a quarterly net loss and updated annual guidance affects its investment narrative.
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What Is RLJ Lodging Trust's Investment Narrative?
For investors considering RLJ Lodging Trust, the core belief hinges on the company's ability to rebound from recent operational headwinds in the competitive hotel REIT sector. The latest earnings report reflects a near-term setback: third quarter revenue and net income both fell year over year, shifting to a net loss after last year's profit. The company’s updated annual guidance, now forecasting full-year net income between US$21.4 million and US$28.4 million (down sharply from earlier projections), signals a more cautious outlook and could temper expectations for a rapid fundamental recovery. The continued share buybacks, even amid lower profits, show ongoing management confidence and a focus on capital return, yet the size remains modest relative to the total share count. In the short term, reduced profit margins and underwhelming revenue growth may overshadow any immediate boost from these buybacks. If current trends persist, the risk of further dividend instability and lackluster returns could weigh heavily on the investment case, particularly when compared to broader market and industry benchmarks.
In contrast, investors should be aware that RLJ has struggled to cover interest payments with earnings recently.
RLJ Lodging Trust's shares have been on the rise but are still potentially undervalued. Find out how large the opportunity might be.
Exploring Other Perspectives
The Simply Wall St Community’s three fair value estimates for RLJ Lodging Trust span from US$7.80 to US$10 per share, showing broad differences in outlook. While some see clear upside, others remain more reserved, reflecting uncertainty heightened after recent guidance cuts and profit challenges. Explore these views to see how varying expectations influence sentiment and potential outcomes.
Explore 3 other fair value estimates on RLJ Lodging Trust - why the stock might be worth just $7.80!
Build Your Own RLJ Lodging Trust Narrative
Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.
- A great starting point for your RLJ Lodging Trust research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.
- Our free RLJ Lodging Trust research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate RLJ Lodging Trust's overall financial health at a glance.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
