A month has gone by since the last earnings report for Host Hotels (HST Quick QuoteHST - Free Report) . Shares have lost about 11.9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Host Hotels due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Host Hotels' Q3 FFO Tops Estimates, RevPAR Rises Y/Y

Host Hotels came out with better-than-anticipated third-quarter 2021 results, in terms of adjusted funds from operations (FFO) per share and revenues. The hotel REIT reported adjusted FFO per share of 20 cents, surpassing the Zacks Consensus Estimate of 14 cents.

It generated total revenues of $844 million, handily beating the Zacks Consensus Estimate of $801 million.

The adjusted FFO per share also compares favorably with the loss of 11 cents per share reported in the prior-year quarter. The top line also improved significantly from the prior year’s $198 million.

The company’s RevPAR was $129 for the reported quarter, reflecting a 26% increase from the prior quarter.

Host Hotels acquired the Baker's Cay Resort Key Largo, Curio Collection, a 223-room luxury downtown Houston hotel and the Alila Ventana Big Sur for a total investment of $415 million during the July-September period.

Behind the Headlines

In the quarter, all owned-hotel pro-forma RevPAR (on a constant-dollar basis) increased significantly year over year to $129. All owned-hotel pro-forma EBITDA was $196 million.

As of the third-quarter end, room revenues from the transient business were $424 million, marking a fall of 19.6% as compared with revenues in the same period in 2019. Room revenues from group and contract businesses declined 54% and 40.5% from third-quarter 2019 to $114 million and $26 million, respectively.

Moreover, room nights for its transient, group and contract businesses declined 23.3%, 47.8% and 9.9%, respectively, from the same period in 2019. The company’s transient, group and contract businesses accounted for roughly 61%, 35% and 4% of its 2019 room sales, respectively.

Balance Sheet Position

Host Hotels exited the third quarter with liquidity of $1.2 billion, including FF&E escrow reserves of $138 million. As of the same date, the company’s debt balance amounted to $5.5 billion. It has no maturities until October 2023.

Capital Expenditure

Since the beginning of the year through Sep 30, the company has incurred around $293 million of capital expenditure. Of this, $201 million was return on investment capital projects spend, and $92 million was renewal and replacement project expenditure.

For 2021, management expects a capital expenditure of $410-$465 million.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month. The consensus estimate has shifted -12.87% due to these changes.

VGM Scores

Currently, Host Hotels has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Host Hotels has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.