Choice Hotels (CHH) AI Stock Analysis

• Market Cap: $4.23B
• Dividend Yield: 1.26%
• Average Volume (3M): 501.68K
• Price to Earnings (P/E): 14.0
• Beta (1Y): 0.59
• Revenue Growth: 1.67%
• EPS Growth: 35.34%
• Country: US
• Employees: 1,695
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Travel Lodging
• EPS (TTM): 2.10
• Shares Outstanding: 46,268,375
• 10 Day Avg. Volume: 533,607
• 30 Day Avg. Volume: 501,684
• PEG Ratio: 0.99
• Price to Book (P/B): -148.01
• Price to Sales (P/S): 4.23
• P/FCF Ratio: 38.61
• Enterprise Value/Market Cap: 1.86
• Enterprise Value/Revenue: 4.93
• Enterprise Value/Gross Profit: 8.82
• Enterprise Value/Ebitda: 12.52
• 1Y Price Target: $113.80
• Price Target Upside: 17.36% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 7
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 62 Neutral
• Price Target: $97.00 ▲(0.03% Upside)

Choice Hotels' overall stock score reflects a balanced view of its strengths and weaknesses. The positive earnings call and attractive valuation are offset by technical weaknesses and financial leverage concerns. The company's strategic focus on international growth and extended stay segments is promising, but domestic challenges and high debt levels remain significant risks.

Positive Factors

International Expansion

The significant growth in international operations highlights Choice Hotels' strategic focus on expanding its global footprint, which can drive long-term revenue growth and diversify its market exposure.

Franchise Growth

The substantial increase in franchise agreements indicates robust demand for Choice Hotels' brands, supporting sustainable revenue growth and enhancing its competitive position in the lodging industry.

Cash Flow Improvement

Improved cash generation capabilities enhance financial flexibility, allowing Choice Hotels to invest in growth opportunities and manage debt effectively, supporting long-term business stability.

Negative Factors

High Financial Leverage

High financial leverage and negative equity pose risks to financial stability, potentially limiting the company's ability to invest in growth and manage economic downturns.

Declining U.S. RevPAR

The decline in U.S. RevPAR reflects challenges in key domestic markets, which could impact overall revenue growth and profitability if not addressed effectively.

Revenue Growth Concerns

Negative revenue growth indicates potential challenges in maintaining sales momentum, which could affect long-term profitability and market competitiveness.

Choice Hotels Business Overview & Revenue Model

Company Description

Choice Hotels International, Inc., together with its subsidiaries, operates as a hotel franchisor worldwide. The company operates in Hotel Franchising and Corporate & Other segments. It franchises lodging properties under the brand names of Comfort Inn, Comfort Suites, Quality, Clarion, Clarion Pointe, Sleep Inn, Econo Lodge, Rodeway Inn, MainStay Suites, Suburban Extended Stay Hotel, WoodSpring Suites, Everhome Suites, Cambria Hotels, and Ascend Hotel Collection. The company also develops and markets cloud-based property management software to non-franchised hoteliers. As of March 31, 2022, it had approximately 7,000 hotels with approximately 600,000 rooms in 35 countries and territories. Choice Hotels International, Inc. was founded in 1939 and is headquartered in Rockville, Maryland.

How the Company Makes Money

Choice Hotels generates revenue primarily through its franchising model. The company earns money by charging franchisees initial franchise fees and ongoing royalty fees, which are typically a percentage of the hotel’s revenue. In addition to these fees, Choice Hotels also profits from various ancillary services, such as marketing and technology services that they provide to their franchisees. The company has established significant partnerships with various travel industry players, including online travel agencies (OTAs) and loyalty programs, which enhance its market reach and customer acquisition. Furthermore, the company's emphasis on loyalty programs, such as Choice Privileges, encourages repeat business, contributing to its overall revenue growth.

Choice Hotels Financial Statement Overview

Summary

Choice Hotels exhibits a mixed financial performance. While profitability metrics like net profit margin are strong, the negative revenue growth and high financial leverage are concerning. The cash flow situation is improving, but the balance sheet's negative equity and high debt levels pose risks.

Income Statement

Choice Hotels shows a mixed performance in its income statement. The company has maintained a relatively stable gross profit margin around 48% in the TTM, indicating effective cost management. However, the revenue growth rate has turned negative in the TTM, reflecting a potential decline in sales. The net profit margin remains healthy at approximately 19.75%, suggesting profitability, but the declining revenue growth is a concern.

Balance Sheet

The balance sheet reveals significant financial leverage with a negative stockholders' equity, leading to a concerning debt-to-equity ratio. The negative return on equity in the TTM indicates that the company is not generating sufficient returns on its equity base. The equity ratio is also negative, highlighting potential financial instability.

Cash Flow

Cash flow analysis shows a positive trend with a 39.2% growth in free cash flow in the TTM, indicating improved cash generation capabilities. The operating cash flow to net income ratio is below 1, suggesting that not all net income is being converted into cash, which could be a risk if it persists. However, the free cash flow to net income ratio is over 50%, indicating decent cash flow relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.60B	1.58B	1.54B	1.40B	1.07B	774.07M
Gross Profit	891.56M	744.17M	690.28M	700.05M	599.60M	311.16M
EBITDA	628.01M	553.64M	440.39M	511.03M	447.94M	127.86M
Net Income	382.07M	299.67M	258.51M	332.15M	288.96M	75.39M
Balance Sheet
Total Assets	2.91B	2.53B	2.39B	2.10B	1.93B	1.59B
Cash, Cash Equivalents and Short-Term Investments	52.58M	40.18M	26.75M	41.57M	511.61M	234.78M
Total Debt	2.03B	1.89B	1.68B	1.29B	1.11B	1.08B
Total Liabilities	2.76B	2.58B	2.36B	1.95B	1.67B	1.59B
Stockholders Equity	149.77M	-45.27M	35.60M	154.66M	265.88M	-5.75M
Cash Flow
Free Cash Flow	238.76M	173.55M	178.26M	273.48M	305.83M	75.10M
Operating Cash Flow	267.62M	319.40M	296.55M	367.06M	383.70M	115.05M
Investing Cash Flow	-199.06M	-84.57M	-265.63M	-442.43M	-78.93M	-29.47M
Financing Cash Flow	-76.47M	-221.71M	-45.94M	-394.15M	-27.72M	115.40M

Choice Hotels Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 96.97
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CHH, the sentiment is Negative. The current price of 96.97 is below the 20-day moving average (MA) of 97.50, below the 50-day MA of 105.54, and below the 200-day MA of 124.83, indicating a bearish trend. The MACD of -3.52 indicates Negative momentum. The RSI at 44.11 is Neutral, neither overbought nor oversold. The STOCH value of 30.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CHH.

Choice Hotels Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HTHT	76 Outperform	$12.11B	25.02	30.38%	4.43%	4.43%	1.61%
ATAT	74 Outperform	$5.48B	28.89	46.30%	2.19%	37.98%	32.17%
WH	65 Neutral	$5.53B	16.86	57.98%	2.20%	3.38%	38.04%
H	63 Neutral	$12.98B	32.07	11.66%	0.43%	0.74%	-54.42%
CHH	62 Neutral	$4.23B	14.04	―	1.26%	1.67%	35.34%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
IHG	60 Neutral	$18.32B	25.47	―	1.37%	8.89%	23.20%

Choice Hotels Corporate Events

Choice Hotels Reports Strong Q3 2025 Financial Results

On November 5, 2025, Choice Hotels International reported its third quarter 2025 results, showcasing a 2.3% global net room growth and a 54% increase in global franchise agreements. The company achieved a net income of $180 million, up from $105.7 million in the same period of 2024, and a record adjusted EBITDA of $190.1 million. Despite a decrease in adjusted diluted EPS due to acquisition-related expenses, Choice Hotels expanded its international operations significantly, adding new rooms and entering new markets, which positions the company for long-term growth and increased profitability.

The most recent analyst rating on (CHH) stock is a Hold with a $125.00 price target. To see the full list of analyst forecasts on Choice Hotels stock, see the CHH Stock Forecast page.

Choice Hotels Reports Strong Q2 2025 Performance

Choice Hotels International, Inc. is a prominent global lodging franchisor with a diverse portfolio of 22 brands, catering to various market segments from upscale to economy, and operates nearly 7,500 hotels worldwide.

Choice Hotels’ Earnings Call: Growth Amid Challenges

The recent earnings call for Choice Hotels International presented a balanced sentiment, showcasing the company’s achievements in international expansion and strategic acquisitions, while acknowledging challenges in domestic RevPAR performance and macroeconomic uncertainties. This equilibrium between growth and challenges was a central theme throughout the discussion.