What is AHT's Intrinsic value?

Ashford Hospitality Trust Inc (AHT) Intrinsic Value Analysis

Executive Summary

As of May 23, 2025, Ashford Hospitality Trust Inc's estimated intrinsic value ranges from $51.46 to $51.46 per share, depending on the valuation methodology applied.

Valuation Method Fair Value (USD) Implied Upside/Downside
Earnings Power Value $51.46 +757.7%

Is Ashford Hospitality Trust Inc (AHT) undervalued or overvalued?

With the current market price at $6.00, the stock appears to be significantly undervalued.

Understanding Intrinsic Value

Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Ashford Hospitality Trust Inc's intrinsic value, including:

  1. Earnings Power Value (EPV): Values the company based on its current earnings power, assuming no growth

Weighted Average Cost of Capital (WACC)

The cost of capital is a critical factor in valuation models, representing the required return for investors.

WACC Component Low High
Long-term bond rate 3.9% 4.4%
Equity market risk premium 4.6% 5.6%
Adjusted beta 24.84 31.34
Cost of equity 118.1% 180.3%
Cost of debt 7.0% 23.9%
Tax rate 1.1% 1.8%
Debt/Equity ratio 80.45 80.45
After-tax WACC 8.2% 25.4%

Valuation Methods

3. Earnings Power Value (EPV)

EPV assesses a company's value based on its current normalized earnings power, assuming no growth.

EPV Component Value
Normalized Earnings $391M
Discount Rate (WACC) 25.4% - 8.2%
Enterprise Value $1,543M - $4,750M
Net Debt $2,849M
Equity Value $(1,306)M - $1,901M
Outstanding Shares 6M
Fair Value $(226) - $329
Selected Fair Value $51.46

Key Financial Metrics

Metric Value
Market Capitalization $35M
Enterprise Value $2884M
Trailing P/E 0.00
Forward P/E 0.00
Trailing EV/EBITDA 8.30
Current Dividend Yield 5531.17%
Dividend Growth Rate (5Y) -8.14%
Debt-to-Equity Ratio 80.45

Investment Decision Framework

To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:

  1. Forecast Certainty: DCF methods rely on long-term projections, while earnings power value focuses on current normalized earnings
  2. Business Model Alignment: Dividend models are more appropriate for mature companies with established dividend policies
  3. Historical Accuracy: How well each method has predicted fair value historically

Valuation Weight Matrix

Valuation Method Weight Weighted Value
Earnings Power Value 100% $5.15
Weighted Average 100% $51.46

Investment Conclusion

Based on our comprehensive valuation analysis, Ashford Hospitality Trust Inc's weighted average intrinsic value is $51.46, which is approximately 757.7% above the current market price of $6.00.

Key investment considerations:

  • Strong projected earnings growth (-6% to 2% margin)
  • Consistent cash flow generation

Given these factors, we believe Ashford Hospitality Trust Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.