We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
What to Expect From Extended Stay (STAY) in Q2 Earnings
Read MoreHide Full Article
Extended Stay America, Inc. is scheduled to report second-quarter 2017 results on Aug 1, before the opening bell.
Last quarter, Extended Stay delivered a positive earnings surprise of 25%. In fact, the company’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 21.11%.
Let’s see how things are shaping up for this announcement.
Extended Stay America, Inc. Price and EPS Surprise
Extended Stay has been renovating its properties lately, which has hurt its occupancy rates in the recent quarters. However, the trend is expected to improve in the to-be-reported quarter as the company is slated to complete renovating all the rooms in the quarter. Nevertheless, the capital expenditures related to the same, although expected to be lower this quarter, will still persist.
Moreover, the company’s lack of exposure to emerging markets might limit its revenue growth potential. That said, the same also limits its exposure to volatile oil markets and unfavorable currency impact, which should boost results. Moreover, per the latest earnings conference call, management anticipates to begin franchise sales in the to-be-reported quarter, which might add to revenue growth.
Meanwhile, the transformational initiatives undertaken by Extended Stay are expected to continue aiding RevPAR (Revenue per Available Room) as hotels that have already been renovated are witnessing increase in Average Daily Rate (ADR) and occupancy levels.
Additionally, various sales and marketing initiatives, and limited exposure to inbound international travel are likely to drive the top line. Also, the company expects its expense containment and cost savings measures to support the growth of favorable margins.
Per first-quarter conference call, management anticipates an acceleration of revenue growth and strong earnings growth in the to-be-reported quarter compared with the previous quarter. In fact, management projected a RevPAR growth in the band of 2% to 4% and adjusted EBITDA (earnings before interest, tax, depreciation and amortization) in the range of $170 million and $175 million, reflecting a growth of 3.5% to 6.5% year over year.
However, management noted that corporate demand had been low thus far in 2017 and the same might continue into the second quarter.
Earnings Whispers
Our proven model does not conclusively show an earnings beat for Extended Stay this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as elaborated below.
Zacks ESP: Extended Stay has an Earnings ESP of -3.13%. This is because the Most Accurate estimate is 31 cents, while the Zacks Consensus Estimate is pegged at 32 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Extended Stay currently carries a Zacks Rank #3, which when combined with a negative ESP makes surprise prediction difficult.
Notably, we caution you against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions
Stocks to Consider
Here are some companies that investors may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Cedar Fair, L.P. (FUN - Free Report) has an Earnings ESP of +7.84% and a Zacks Rank #2.
Wyndham Worldwide Corporation has an Earnings ESP of +1.32% and a Zacks Rank #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
What to Expect From Extended Stay (STAY) in Q2 Earnings
Extended Stay America, Inc. is scheduled to report second-quarter 2017 results on Aug 1, before the opening bell.
Last quarter, Extended Stay delivered a positive earnings surprise of 25%. In fact, the company’s earnings surpassed the Zacks Consensus Estimate in each of the last four quarters, with an average beat of 21.11%.
Let’s see how things are shaping up for this announcement.
Extended Stay America, Inc. Price and EPS Surprise
Extended Stay America, Inc. Price and EPS Surprise | Extended Stay America, Inc. Quote
Factors Likely to Influence Q2 Results
Extended Stay has been renovating its properties lately, which has hurt its occupancy rates in the recent quarters. However, the trend is expected to improve in the to-be-reported quarter as the company is slated to complete renovating all the rooms in the quarter. Nevertheless, the capital expenditures related to the same, although expected to be lower this quarter, will still persist.
Moreover, the company’s lack of exposure to emerging markets might limit its revenue growth potential. That said, the same also limits its exposure to volatile oil markets and unfavorable currency impact, which should boost results. Moreover, per the latest earnings conference call, management anticipates to begin franchise sales in the to-be-reported quarter, which might add to revenue growth.
Meanwhile, the transformational initiatives undertaken by Extended Stay are expected to continue aiding RevPAR (Revenue per Available Room) as hotels that have already been renovated are witnessing increase in Average Daily Rate (ADR) and occupancy levels.
Additionally, various sales and marketing initiatives, and limited exposure to inbound international travel are likely to drive the top line. Also, the company expects its expense containment and cost savings measures to support the growth of favorable margins.
Per first-quarter conference call, management anticipates an acceleration of revenue growth and strong earnings growth in the to-be-reported quarter compared with the previous quarter. In fact, management projected a RevPAR growth in the band of 2% to 4% and adjusted EBITDA (earnings before interest, tax, depreciation and amortization) in the range of $170 million and $175 million, reflecting a growth of 3.5% to 6.5% year over year.
However, management noted that corporate demand had been low thus far in 2017 and the same might continue into the second quarter.
Earnings Whispers
Our proven model does not conclusively show an earnings beat for Extended Stay this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. That is not the case here, as elaborated below.
Zacks ESP: Extended Stay has an Earnings ESP of -3.13%. This is because the Most Accurate estimate is 31 cents, while the Zacks Consensus Estimate is pegged at 32 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Extended Stay currently carries a Zacks Rank #3, which when combined with a negative ESP makes surprise prediction difficult.
Notably, we caution you against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions
Stocks to Consider
Here are some companies that investors may consider, as our model shows that they have the right combination of elements to post an earnings beat this quarter:
Cedar Fair, L.P. (FUN - Free Report) has an Earnings ESP of +7.84% and a Zacks Rank #2.
Time Warner Inc. has an Earnings ESP of +1.68% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Wyndham Worldwide Corporation has an Earnings ESP of +1.32% and a Zacks Rank #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>