Is Summit Hotel Properties, Inc. overvalued or undervalued?

As of 5 August 2025, the valuation grade for Summit Hotel Properties, Inc. has moved from very attractive to risky, indicating a shift in perception regarding its investment potential. The company appears to be overvalued, as evidenced by its P/E ratio of 12, which is significantly higher than peers like New York Mortgage Trust, Inc. with a P/E of 6.74, and BrightSpire Capital, Inc. at 22.13. Additionally, the EV to EBITDA ratio of 2.20 is less favorable compared to the industry average, while the PEG ratio of 0.04 suggests limited growth prospects relative to its valuation.
In terms of returns, Summit Hotel Properties has underperformed compared to the S&P 500 across multiple periods, with a year-to-date return of -12.70% versus 12.22% for the index, and a three-year return of -23.43% compared to 70.41% for the S&P 500. This underperformance reinforces the notion that the stock may not be a sound investment at its current valuation levels.