Time To Rake In Healthy Returns From Extended Stay America, Inc. (STAY)

Extended Stay America, Inc. (STAY) shares saw a recent bid of $18.20 and 16.47M shares have exchanged hands in the recent trading session, yielding a 2.42% gain over the past week. The stock price increased 3.41% or $-0.6 versus $17.60 at the end of the prior session. This change led market cap to move at $3.54B, putting the price -2.41% below the 52-week high and 40.00% above the 52-week low. The company’s stock has a normal trading capacity of 2.23M shares while the relative volume is 7.39.

To stay one step ahead we extended our research by comparing different price targets. The stock notched a 12-month high of $20.12 while $23.00 target is by far the most aggressive out of analysts who are currently evaluating the company, $2.88 higher than the next highest 52-week price estimate. The lowest 12-month price target for the shares is $18.00, which would be decrease of about -1% of its current value. The mean target of $20.00 should be compared with the price when the stock was languishing around $13.00 a share. And it remains to be seen which target price STAY can achieve without sacrificing much as the company is holding a 27.63% gain for the past twelve months.

By historical standards, Extended Stay America, Inc. remains a cheap stock. The company’s current price-earnings ratio amounts to 47.12 times earnings, above the average P/E ratio of 25.16 times earnings. For now, Extended Stay America, Inc. is the toast of Wall Street as its ABR stands at 2.20 with 4 out of 13 analysts rating the stock a buy. Over the short term, some market observers may have noticed that Extended Stay America, Inc. has a 1.71% short float with 15 days to cover. It becomes significant when you consider how many shares are shorted versus the average daily volume, means how many days to cover those short shares at that volume. Extended Stay America, Inc. has far performed well this year, with the share price up 12.69% since January. Over the past 2 quarters, the stock is up 17.34%, compared with a gain of nearly 5.32% for 3 months and about 1.05% for the past 30 days.

Last time, the company shocked Wall Street by reporting EPS of $0.15, smashing the consensus of $0.12 per share. Revenue for the quarter also killed consensus, coming in at $290.99M, compared to the consensus of 289.9M. Nonetheless, from here on out, earnings per share forecasts for the current quarter are $0.31. The company is expected to report EPS as high as $0.34 and as low as $0.30 per share. Similarly, full-year EPS forecasts have ranged between $1.00 and $1.12. The mean EPS estimate is $1.03. On the other side, sales forecasts for the current quarter are $342.85M. The stock is expected to report revenue as high as $346M and as low as $340.48M per share. Similarly, full-year sales forecasts have ranged between $1.29B and $1.31B. The mean revenue estimate is $1.3B.

Over the last 5 years, Extended Stay America, Inc. has averaged a 8.90% YoY EPS growth rate and a 6.20% revenue growth rate. Analysts are expecting EPS growth rates to be at -37.00% this quarter and EPS estimate for next year reflect 6.86% growth rate.

Sell-side analysts also have something to say about this company. Stifel raised its rating on Extended Stay America, Inc. to Buy on 25/01/2017 in a reversal from its prior Hold rating. MKM Partners raised its rating on Extended Stay America, Inc. to Buy on 05/12/2016 in a reversal from its prior Neutral rating. Goldman analysts stated on 26/09/2016 that they launched coverage on this stock with Neutral rating. MKM Partners analysts stated on 27/04/2016 that they maintained their Neutral rating.

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