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Ryman Hospitality Properties, Inc. 10-K Analysis & Summary – 2/21/2025

⚠️This is not investment advice.

⚠️ This is an experimental project and this report is for informational purposes only and should not be considered investment advice. Conduct your own thorough research and consult with a qualified financial advisor before making any investment decisions. ⚠️

Ryman Hospitality Properties, I

Filing date:

02/21/2025

TLDR:

Ryman Hospitality Properties, Inc. (RHP) experienced revenue growth in 2024, driven by the Hospitality segment, but net income decreased due to higher interest expenses. Key risks include reliance on Marriott, industry concentration, and high debt levels.

ELI5:

Ryman Hospitality, a company that owns hotels and entertainment venues like the Grand Ole Opry, made more money overall, but their profits went down because they had to pay more in interest. They rely a lot on Marriott and are in a risky business because they focus on group meetings and have a lot of debt.

Accession #:

0001558370-25-001286

Published on

Analyst Summary

  • Total revenues increased by 8.4% in 2024, driven by Hospitality and Entertainment segments.
  • Net income decreased by 18.0% due to a smaller income tax benefit and higher interest expenses.
  • Hospitality occupancy decreased slightly, but ADR increased.
  • Net Definite Group Room Nights Booked increased by 4.3%, while Same-Store Transient Room Nights Traveled decreased by 11.2%.
  • Gross Profit Margin decreased by 4.1% to 35.3%.
  • Net Profit Margin decreased by 24.1% to 12.0%.
  • Return on Assets (ROA) decreased by 18.2% to 5.4%.
  • Return on Equity (ROE) decreased by 9.5% to 49.5%.
  • Basic EPS decreased by 15.8% to $4.54.
  • Diluted EPS decreased by 18.3% to $4.38.
  • Current Ratio decreased by 12% to 1.25.
  • Quick Ratio decreased by 12.2% to 1.22.
  • Cash Ratio decreased by 3.6% to 1.07.
  • Debt-to-Equity Ratio increased by 3.7% to 6.15.
  • Debt-to-Assets Ratio decreased by 0.6% to 64.7%.
  • Interest Coverage Ratio increased by 1.4% to 2.18.
  • Asset Turnover increased by 7.1% to 0.45.
  • Adjusted EBITDA re increased by 9.8% from 2023 to 2024.
  • Adjusted FFO increased by 11.6% from 2023 to 2024.

Opportunities and Risks

  • Reliance on Marriott: RHP’s performance is heavily dependent on Marriott’s management capabilities.
  • Industry Concentration: Focus on group-oriented meetings exposes RHP to sector-specific downturns.
  • High Debt Levels: Substantial debt could reduce cash flow and limit business activities.
  • Inflation: Rising operating costs and interest rates could negatively impact profitability.
  • Cybersecurity: Potential breaches could disrupt operations and damage reputation.
  • Expansion of Hotel Portfolio: Acquisitions like JW Marriott Hill Country can drive revenue growth.
  • Investment in Existing Properties: Enhancements and expansions can attract more group customers.
  • Brand Leverage: Leveraging the Grand Ole Opry brand through various media and partnerships.

Potential Implications

Company Performance

  • Revenue growth driven by Hospitality segment and JW Marriott Hill Country.
  • Decreased net income due to higher interest expenses and smaller income tax benefit.
  • High debt levels may limit future business activities.
  • Strategic investments and brand leverage offer growth opportunities.
  • Inflationary pressures could negatively impact profitability.

Stock Price

  • P/E ratio is within the industry range.
  • P/B ratio is significantly higher than the industry average.
  • P/S ratio is lower than the industry average.
  • EV/EBITDA ratio is lower than the industry average.

Ryman Hospitality Properties, Inc. (RHP) 2024 10-K Report Analysis

Executive Summary

This report analyzes Ryman Hospitality Properties, Inc.’s 2024 10-K filing. RHP, a REIT specializing in group-oriented hotels and entertainment venues, shows revenue growth driven by the Hospitality segment, particularly the addition of JW Marriott Hill Country. However, net income decreased due to higher interest expenses and a smaller income tax benefit compared to the previous year. Key risks include reliance on Marriott, industry concentration, and debt levels. Overall, a HOLD recommendation is suggested, pending further assessment of long-term debt management and Entertainment segment performance.

Company Overview

Ryman Hospitality Properties, Inc. (RHP) is a self-advised and self-administered REIT focused on group-oriented, destination hotel assets and entertainment venues. The company operates primarily through its Hospitality (Gaylord Hotels, JW Marriott Hill Country) and Entertainment (Opry Entertainment Group) segments. RHP’s strategy includes expanding its hotel portfolio, investing in existing properties, and leveraging its brand name awareness.

Detailed Analysis

Management’s Discussion and Analysis (MD&A)

Management highlights revenue growth in both Hospitality and Entertainment segments. The addition of JW Marriott Hill Country significantly boosted Hospitality revenue. Management also emphasizes strategic capital allocation, including returning capital to stockholders through dividends. However, the MD&A acknowledges the impact of inflation on operating costs and interest expenses.

Financial Statement Analysis

Income Statement

Total revenues increased by 8.4% in 2024, driven by Hospitality and Entertainment segments. However, net income decreased by 18.0% due to a smaller income tax benefit and higher interest expenses.

Metric 2024 2023 Change
Total Revenues $2,339.2M $2,158.1M 8.4%
Net Income $280.2M $341.8M -18.0%

Balance Sheet

Total assets remained relatively stable year-over-year. Debt levels remain high, with a significant portion secured by assets. The company’s equity position is influenced by accumulated distributions in excess of net income.

Metric 2024 2023
Total Assets $5,217.6M $5,188.5M
Total Debt $3,378.4M $3,377.0M

Cash Flow Statement

Cash flow from operations remained strong, driven by net income and non-cash charges. Investing activities primarily involved capital expenditures and the prior year’s acquisition of JW Marriott Hill Country. Financing activities reflected debt issuance and repayment, as well as dividend payments.

Key Ratios

Ratio 2024 2023 Notes
Hospitality Occupancy 69.1% 71.6% Slight decrease in occupancy.
Hospitality ADR $257.81 $245.74 Increase in average daily rate.
Hospitality RevPAR $178.24 $175.96 Slight increase in revenue per available room.

Uncommon Metrics

  • Net Definite Group Room Nights Booked: Increased by 4.3%, indicating strong future group bookings.
  • Same-Store Transient Room Nights Traveled: Decreased by 11.2%, suggesting softness in transient demand.

Risk and Opportunity Assessment

Risks

  • Reliance on Marriott: RHP’s performance is heavily dependent on Marriott’s management capabilities.
  • Industry Concentration: Focus on group-oriented meetings exposes RHP to sector-specific downturns.
  • High Debt Levels: Substantial debt could reduce cash flow and limit business activities.
  • Inflation: Rising operating costs and interest rates could negatively impact profitability.
  • Cybersecurity: Potential breaches could disrupt operations and damage reputation.

Opportunities

  • Expansion of Hotel Portfolio: Acquisitions like JW Marriott Hill Country can drive revenue growth.
  • Investment in Existing Properties: Enhancements and expansions can attract more group customers.
  • Brand Leverage: Leveraging the Grand Ole Opry brand through various media and partnerships.

Conclusion and Actionable Insights

Ryman Hospitality Properties demonstrates revenue growth, but faces challenges related to profitability and debt management. The company’s reliance on Marriott and concentration in the group meetings sector pose significant risks. While strategic investments and brand leverage offer opportunities, careful monitoring of debt levels and operating costs is crucial.

Recommendation: HOLD. Further evaluation is needed to assess the long-term impact of debt management strategies and the performance of the Entertainment segment. Monitor key performance indicators such as occupancy rates, ADR, and RevPAR, as well as management’s ability to mitigate inflationary pressures.

Financial Ratio and Metric Analysis

Profitability

  • Gross Profit Margin:

    • Calculation: (Total Revenues – Total Operating Expenses (excluding Depreciation and Amortization)) / Total Revenues = ($2,339,226 – ($1,848,392 – $235,626)) / $2,339,226 = 35.3%
    • Trend: Previous year Gross Profit Margin was 36.8%. Percentage change: -4.1%
    • Industry: The average gross profit margin for the hotel and resort industry is around 75%. RHP’s gross profit margin is significantly lower, which may be due to the inclusion of the Entertainment segment, which typically has lower margins.
  • Operating Profit Margin:

    • Calculation: Operating Income / Total Revenues = $490,834 / $2,339,226 = 21.0%
    • Trend: Previous year Operating Profit Margin was 21.0%. Percentage change: 0%
    • Industry: The average operating profit margin for the hotel and resort industry is around 15-20%. RHP’s operating profit margin is within this range.
  • Net Profit Margin:

    • Calculation: Net Income / Total Revenues = $280,190 / $2,339,226 = 12.0%
    • Trend: Previous year Net Profit Margin was 15.8%. Percentage change: -24.1%
    • Industry: The average net profit margin for the hotel and resort industry is around 10-15%. RHP’s net profit margin is within this range.
  • Return on Assets (ROA):

    • Calculation: Net Income / Total Assets = $280,190 / $5,217,573 = 5.4%
    • Trend: Previous year ROA was 6.6%. Percentage change: -18.2%
    • Industry: The average ROA for the hotel and resort industry is around 2-4%. RHP’s ROA is higher than the industry average.
  • Return on Equity (ROE):

    • Calculation: Net Income Available to Common Stockholders / Total Stockholders’ Equity = $271,638 / $548,980 = 49.5%
    • Trend: Previous year ROE was 54.7%. Percentage change: -9.5%
    • Industry: The average ROE for the hotel and resort industry is around 5-10%. RHP’s ROE is significantly higher than the industry average, which may be due to its REIT structure and higher leverage.
  • Earnings Per Share (EPS) – Basic and Diluted:

    • Basic EPS: $4.54
    • Diluted EPS: $4.38
    • Trend: Previous year Basic EPS was $5.39. Percentage change: -15.8%
    • Trend: Previous year Diluted EPS was $5.36. Percentage change: -18.3%
    • Industry: EPS varies widely based on company size and profitability.

Liquidity

  • Current Ratio:

    • Calculation: Current Assets / Current Liabilities. Need to calculate Current Assets and Current Liabilities from the balance sheet.
      * Current Assets = Cash and cash equivalents – unrestricted + Cash and cash equivalents – restricted + Trade receivables, net = $477,694 + $98,534 + $94,184 = $670,412
      * Current Liabilities = Accounts payable and accrued liabilities + Distributions payable = $466,571 + $71,444 = $538,015
      * Current Ratio = $670,412 / $538,015 = 1.25
    • Trend: Previous year Current Ratio was 1.42. Percentage change: -12%
    • Industry: A current ratio of 1.0 to 2.0 is generally considered healthy. RHP’s current ratio is within this range.
  • Quick Ratio (Acid-Test Ratio):

    • Calculation: (Current Assets – Inventory) / Current Liabilities. Need to calculate Inventory from the notes.
      * Inventory = $16,134
      * Quick Ratio = ($670,412 – $16,134) / $538,015 = 1.22
    • Trend: Previous year Quick Ratio was 1.39. Percentage change: -12.2%
    • Industry: A quick ratio of 1.0 or greater is generally considered healthy. RHP’s quick ratio is above 1.
  • Cash Ratio:

    • Calculation: (Cash and Cash Equivalents) / Current Liabilities = ($477,694 + $98,534) / $538,015 = 1.07
    • Trend: Previous year Cash Ratio was 1.11. Percentage change: -3.6%
    • Industry: A cash ratio of 0.5 or greater is generally considered acceptable. RHP’s cash ratio is above 1.

Solvency/Leverage

  • Debt-to-Equity Ratio:

    • Calculation: Total Debt / Total Stockholders’ Equity = $3,378,396 / $548,980 = 6.15
    • Trend: Previous year Debt-to-Equity Ratio was 5.93. Percentage change: 3.7%
    • Industry: The average debt-to-equity ratio for the hotel and resort industry is around 1.0-2.0. RHP’s debt-to-equity ratio is significantly higher, which is common for REITs.
  • Debt-to-Assets Ratio:

    • Calculation: Total Debt / Total Assets = $3,378,396 / $5,217,573 = 64.7%
    • Trend: Previous year Debt-to-Assets Ratio was 65.1%. Percentage change: -0.6%
    • Industry: The average debt-to-assets ratio for the hotel and resort industry is around 30-40%. RHP’s debt-to-assets ratio is higher than the industry average.
  • Interest Coverage Ratio (Times Interest Earned):

    • Calculation: Operating Income / Interest Expense = $490,834 / $225,395 = 2.18
    • Trend: Previous year Interest Coverage Ratio was 2.15. Percentage change: 1.4%
    • Industry: A times interest earned ratio of 1.5 or greater is generally considered acceptable. RHP’s interest coverage ratio is above 2.

Activity/Efficiency

  • Asset Turnover:

    • Calculation: Total Revenues / Total Assets = $2,339,226 / $5,217,573 = 0.45
    • Trend: Previous year Asset Turnover was 0.42. Percentage change: 7.1%
    • Industry: The average asset turnover for the hotel and resort industry is around 0.5-0.7. RHP’s asset turnover is lower than the industry average.

Valuation

  • Price-to-Earnings Ratio (P/E):

    • Calculation: Stock Price / Diluted EPS = $98.44 / $4.38 = 22.5
    • Industry: The average P/E ratio for the hotel and resort industry is around 20-30. RHP’s P/E ratio is within this range.
  • Price-to-Book Ratio (P/B):

    • Calculation: Market Cap / Total Stockholders’ Equity = (59,903 * $98.44) / $548,980,000 = 10.7
    • Industry: The average P/B ratio for the hotel and resort industry is around 1-3. RHP’s P/B ratio is significantly higher than the industry average.
  • Price-to-Sales Ratio (P/S):

    • Calculation: Market Cap / Total Revenues = (59,903 * $98.44) / $2,339,226,000 = 0.0025
    • Industry: The average P/S ratio for the hotel and resort industry is around 1-2. RHP’s P/S ratio is lower than the industry average.
  • Enterprise Value to EBITDA (EV/EBITDA):

    • Calculation: (Market Cap + Total Debt – Cash) / EBITDA re = (($98.44 * 59,903) + $3,378,396 – ($477,694 + $98,534)) / $726,805 = 4.5
    • Industry: The average EV/EBITDA ratio for the hotel and resort industry is around 10-15. RHP’s EV/EBITDA ratio is lower than the industry average.

Growth Rates

  • Revenue Growth:
    • Calculation: ($2,339,226 – $2,158,136) / $2,158,136 = 8.4%
    • Industry: The average revenue growth for the hotel and resort industry is around 3-5%. RHP’s revenue growth is higher than the industry average.
  • Net Income Growth:
    • Calculation: ($280,190 – $341,800) / $341,800 = -18.0%
    • Industry: Net income growth varies widely based on company size and profitability.
  • EPS Growth:
    • Calculation: ($4.38 – $5.36) / $5.36 = -18.3%
    • Industry: EPS growth varies widely based on company size and profitability.

Other Relevant Metrics

  • Adjusted EBITDA re , Excluding Noncontrolling Interest in Consolidated Joint Venture:

    • 2024: $725,959
    • 2023: $660,861
    • 2022: $540,545
    • Significance: This is a non-GAAP metric used by the company to measure operating performance. It excludes certain items that may not be indicative of ongoing operations.
    • Trend: Adjusted EBITDA re increased by 9.8% from 2023 to 2024.
  • Adjusted FFO available to common stockholders and unit holders:

    • 2024: $527,821
    • 2023: $473,133
    • 2022: $363,501
    • Significance: This is a non-GAAP metric used by REITs to measure their operating performance. It is considered a key metric for evaluating REITs.
    • Trend: Adjusted FFO increased by 11.6% from 2023 to 2024.

Commentary

Ryman Hospitality Properties demonstrated solid revenue growth in 2024, driven by its Hospitality segment and the addition of JW Marriott Hill Country. However, net income and EPS declined due to a higher income tax provision and increased interest expense. The company maintains a high debt-to-equity ratio, typical for a REIT, but its interest coverage remains adequate. While ROE and ROA decreased, they still outperform industry averages, indicating efficient asset utilization. Overall, RHP’s financial performance reflects a company focused on growth and strategic investments, but with increased financial risk.

⚠️ This is an experimental project and this report is for informational purposes only and should not be considered investment advice. Conduct your own thorough research and consult with a qualified financial advisor before making any investment decisions. ⚠️