Xenia Hotels & Resorts (XHR) has drawn investor attention after recent share price moves, with the stock closing at US$17.37 and posting gains over the past month and past 3 months.

While the share price slipped around 1% over the last trading day, Xenia Hotels & Resorts has a 30 day share price return of about 8% and a year to date share price return above 20%, alongside a 1 year total shareholder return close to 48%, which indicates momentum building over the medium term.

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With Xenia Hotels & Resorts posting strong recent returns and trading near analyst price targets, the key question now is whether its current valuation still offers upside or if the market is already pricing in future growth.

Most Popular Narrative: 5.9% Overvalued

The most followed narrative values Xenia Hotels & Resorts at $16.40 per share, which sits just below the recent $17.37 close, and anchors a detailed long term earnings view built using an 8.77% discount rate.

The company's exposure to high-growth urban and tech-centric markets such as Northern California is starting to pay off, with strong weekday corporate demand linked to the AI and tech sectors boosting occupancy and rates. As business travel continues its gradual rebound, this should drive sustained improvements in RevPAR and EBITDA in these strategically positioned assets.

Curious what earnings path and margin profile sit behind that fair value tag, and why the implied future P/E multiple stretches far beyond typical sector levels? The narrative also bakes in changing share count assumptions and a specific revenue growth glide path that could materially shift the valuation if they move even slightly.

Result: Fair Value of $16.40 (OVERVALUED)

However, softer leisure demand and rising labor costs, especially in markets like Northern California, could pressure RevPAR and margins and challenge the upbeat earnings narrative.

Another View: DCF Points To Deep Discount

While the popular narrative frames Xenia Hotels & Resorts as about 5.9% overvalued at $17.37 versus a $16.40 fair value, the SWS DCF model presents a very different picture, with an estimated value of $33.10 a share and the stock trading about 47.5% below that level.

This gap between a modestly overvalued story and a deeply discounted cash flow view leaves a wide range of possible outcomes. Which set of assumptions do you think fits Xenia's future best, and how comfortable are you with that call?

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Xenia Hotels & Resorts for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 46 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

With sentiment on Xenia Hotels & Resorts pulled between opportunity and caution, this is a moment to move quickly, test the assumptions, and weigh both sides using the 2 key rewards and 5 important warning signs

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.