Is RLJ Lodging Trust overvalued or undervalued?

As of 5 May 2025, the valuation grade for RLJ Lodging Trust has moved from expensive to very attractive, indicating a significant shift in its perceived value. The company appears undervalued, especially when considering its P/E ratio of 17, which is notably lower than peers such as CareTrust REIT, Inc. with a P/E of 35.16, and Urban Edge Properties at 26.65. Additionally, RLJ Lodging Trust's price to book value stands at 0.51 and its EV to EBITDA at 2.30, both suggesting a favorable valuation compared to the industry.
In terms of peer comparison, RLJ Lodging Trust's valuation metrics demonstrate it is positioned well against competitors like OUTFRONT Media, Inc., which has a P/E of 24.95 and an EV to EBITDA of 7.32. Despite a challenging year-to-date return of -23.70% compared to the S&P 500's 12.22%, the stock's recent performance of 1.17% over the past week suggests a potential recovery. Overall, RLJ Lodging Trust's attractive valuation ratios and peer comparisons support the conclusion that it is undervalued in the current market.