U.S. Markets closed

At US$12.09, Is Summit Hotel Properties, Inc. (NYSE:INN) Worth Looking At Closely?

Simply Wall St

Summit Hotel Properties, Inc. (NYSE:INN), which is in the reits business, and is based in United States, saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s take a look at Summit Hotel Properties’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Summit Hotel Properties

What is Summit Hotel Properties worth?

Great news for investors – Summit Hotel Properties is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is $17.83, but it is currently trading at US$12.09 on the share market, meaning that there is still an opportunity to buy now. Although, there may be another chance to buy again in the future. This is because Summit Hotel Properties’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company's shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

What kind of growth will Summit Hotel Properties generate?

NYSE:INN Past and Future Earnings, December 4th 2019

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Though in the case of Summit Hotel Properties, it is expected to deliver a highly negative earnings growth in the next few years, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What this means for you:

Are you a shareholder? Although INN is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to INN, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping an eye on INN for a while, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Summit Hotel Properties. You can find everything you need to know about Summit Hotel Properties in the latest infographic research report. If you are no longer interested in Summit Hotel Properties, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.