Choice Hotels International (CHH)
NYSE:CHH
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Choice Hotels
(NYSE:CHH)
Select Model
Select Model
Rating:67Neutral
Price Target:
$107.00
â–¼(-4.52% Downside)
Action:ReiteratedDate:02/20/26
The score is held back primarily by balance-sheet leverage and historically thin/volatile equity despite strong profitability and positive free cash flow. Technicals are supportive and valuation is reasonable, while the latest call was constructive on strategy and liquidity but tempered by near-term RevPAR softness in 2026 guidance.
Positive Factors
Asset-light, fee-based business model
The franchise model generates recurring royalty and fee streams tied to franchisee revenues, requiring minimal hotel ownership. This reduces capital intensity, supports steady margins and cash conversion, and enables scalable growth with lower balance-sheet investment over multiple economic cycles.
Negative Factors
Elevated balance-sheet leverage
High leverage and a thin equity base constrain financial flexibility, raise refinancing and covenant risk, and amplify downside in weaker demand periods. Limited equity cushions reduce capacity for opportunistic M&A or larger buybacks and heighten sensitivity to lodging-cycle volatility.
Read all positive and negative factors
Positive Factors
Negative Factors
Asset-light, fee-based business model
The franchise model generates recurring royalty and fee streams tied to franchisee revenues, requiring minimal hotel ownership. This reduces capital intensity, supports steady margins and cash conversion, and enables scalable growth with lower balance-sheet investment over multiple economic cycles.
Read all positive factors
Choice Hotels (CHH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.15B
Dividend Yield1.32%
Average Volume (3M)554.11K
Price to Earnings (P/E)17.2
Beta (1Y)0.65
Revenue Growth2.76%
EPS Growth56.02%
CountryUS
Employees1,695
SectorConsumer Cyclical
Sector Strength84
IndustryTravel Lodging
Share Statistics
EPS (TTM)1.60
Shares Outstanding45,971,394
10 Day Avg. Volume460,381
30 Day Avg. Volume554,110
Financial Highlights & Ratios
PEG Ratio0.42
Price to Book (P/B)24.21
Price to Sales (P/S)2.75
P/FCF Ratio35.19
Enterprise Value/Market Cap1.44
Enterprise Value/Revenue4.65
Enterprise Value/Gross Profit9.12
Enterprise Value/Ebitda11.27
Forecast
1Y Price Target
$110.38Price Target Upside-1.51% Downside
Rating ConsensusHold
Number of Analyst Covering8
EPS Forecast (FY)7.08
Revenue Forecast (FY)$1.62B
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 Comfor...
How the Company Makes Money
Choice Hotels primarily makes money through an asset-light, franchise-focused model where most properties are owned and operated by independent hotel owners (franchisees) rather than by Choice. The company’s key revenue streams generally include: ...
Choice Hotels Key Performance Indicators (KPIs)
Any
Average Daily Rate Breakdown
Reveals the average income earned per occupied room, providing insight into pricing strategy effectiveness and market positioning.
Reveals the average income earned per occupied room, providing insight into pricing strategy effectiveness and market positioning.
Data provided by:
The Fly
The FlyChoice Hotels Earnings Call Summary
Earnings Call Date:Feb 19, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call presented multiple clear operational and strategic wins: adjusted EBITDA and EPS in line with guidance, robust international revenue and openings, strong momentum in extended stay and conversion pipelines, membership and partnership revenue growth, and solid liquidity and cash generation. These positives were tempered by near-term RevPAR weakness (notably a 4.6% global Q4 decline and U.S. pressure after lapping hurricane benefits), some working capital timing impacts, and short-term unit growth headwinds from selective exits and higher key money expectations for 2026. Management characterized much of the RevPAR weakness as transitory and highlighted offsetting strength internationally and in higher-revenue segments, which, together with disciplined capital allocation, supports confidence in returning to positive U.S. net room growth and durable earnings expansion.Positive Updates
Adjusted EBITDA and EPS In Line with Guidance
Full-year adjusted EBITDA of $626,000,000, up 4% year-over-year; full-year adjusted EPS of $6.94 per share, both consistent with midpoint of guidance. Fourth-quarter adjusted EBITDA of $141,000,000 and adjusted EPS up ~3% year-over-year to ~$1.6.
Negative Updates
Fourth-Quarter Global and U.S. RevPAR Declines
Global RevPAR declined 4.6% year-over-year in Q4 on a currency-neutral basis. U.S. RevPAR (excluding a prior-year hurricane benefit) declined ~2.2% year-over-year, with notable region-specific pressure and tougher comps from the prior-year hurricane impact.
Read all updates
Q4-2025 Updates
Positive
Negative
Adjusted EBITDA and EPS In Line with Guidance
Full-year adjusted EBITDA of $626,000,000, up 4% year-over-year; full-year adjusted EPS of $6.94 per share, both consistent with midpoint of guidance. Fourth-quarter adjusted EBITDA of $141,000,000 and adjusted EPS up ~3% year-over-year to ~$1.6.
Read all positive updates
Company Guidance
Choice guided FY2026 global RevPAR of -2% to +1% (constant currency) with U.S. RevPAR in the same -2% to +1% range, noting Q1 should remain negative with an inflection in Q2; average royalty rates are expected to grow in the mid‑single digits and adjusted SG&A to rise in the mid‑single digits. Management expects key‑money gross outlays of roughly $105–$110 million, net hotel development capital outlays to decline to about $20–$45 million, and reiterated a strong balance sheet with $571 million of liquidity and net debt/TTM EBITDA of 3.0x (within its 3.0x–4.0x target). The outlook excludes any incremental M&A or share repurchases after 12/31, and the company said U.S. net rooms growth should return to positive in 2026 driven by conversion activity and a higher‑royalty, more accretive pipeline.Choice Hotels Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
42
Neutral
Cash Flow
70
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.60B | 1.58B | 1.54B | 1.40B | 1.07B |
| Gross Profit | 980.59M | 744.17M | 690.28M | 700.05M | 599.60M |
| EBITDA | 659.27M | 553.64M | 440.39M | 544.52M | 473.67M |
| Net Income | 369.95M | 299.67M | 258.51M | 332.15M | 288.96M |
Balance Sheet | |||||
| Total Assets | 2.92B | 2.53B | 2.39B | 2.10B | 1.93B |
| Cash, Cash Equivalents and Short-Term Investments | 45.00M | 40.18M | 26.75M | 41.57M | 511.61M |
| Total Debt | 2.13B | 1.89B | 1.68B | 1.29B | 1.11B |
| Total Liabilities | 2.74B | 2.58B | 2.36B | 1.95B | 1.67B |
| Stockholders Equity | 181.23M | -45.27M | 35.60M | 154.66M | 265.88M |
Cash Flow | |||||
| Free Cash Flow | 124.65M | 173.55M | 178.26M | 277.11M | 305.83M |
| Operating Cash Flow | 270.45M | 319.40M | 296.55M | 367.06M | 383.70M |
| Investing Cash Flow | -218.26M | -84.57M | -265.63M | -442.43M | -78.93M |
| Financing Cash Flow | -50.10M | -221.71M | -45.94M | -394.15M | -27.72M |
Choice Hotels Technical Analysis
Positive
112.07
Price Trends
103.82
Positive
99.88
Positive
106.91
Positive
Market Momentum
2.02
Negative
66.40
Neutral
89.49
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CHH, the sentiment is Positive. The current price of 112.07 is above the 20-day moving average (MA) of 101.81, above the 50-day MA of 103.82, and above the 200-day MA of 106.91, indicating a bullish trend. The MACD of 2.02 indicates Negative momentum. The RSI at 66.40 is Neutral, neither overbought nor oversold. The STOCH value of 89.49 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CHH.
Choice Hotels Risk Analysis
Choice Hotels disclosed 33 risk factors in its most recent earnings report. Choice Hotels reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Choice Hotels Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $20.98B | 28.95 | -23.50% | 1.21% | 8.89% | 23.20% | |
70 Outperform | $4.99B | 20.08 | 46.59% | 1.76% | 36.17% | 25.41% | |
68 Neutral | $14.67B | -294.43 | -1.50% | 0.36% | 2.61% | -106.74% | |
67 Neutral | $5.15B | 17.22 | 614.45% | 1.32% | 2.76% | 56.02% | |
65 Neutral | $16.06B | 20.45 | 42.78% | 3.60% | 5.70% | 9.53% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
61 Neutral | $6.44B | -23.83 | 35.09% | 2.13% | 3.38% | 38.04% |
* Consumer Cyclical Sector Average
CHH
Choice Hotels
112.07
-13.04
-10.42%
HTHT
H World Group
52.48
19.57
59.48%
H
Hyatt Hotels
155.25
46.62
42.92%
IHG
Intercontinental Hotels Group
141.48
39.21
38.34%
WH
Wyndham Hotels & Resorts
85.67
3.08
3.73%
ATAT
Atour Lifestyle Holdings
36.13
12.77
54.67%
Choice Hotels Corporate Events
Executive/Board Changes
Choice Hotels Announces Retirement of Senior Legal Executive
Neutral
Feb 20, 2026
On February 20, 2026, Choice Hotels International, Inc. announced that Simone Wu, its Senior Vice President, General Counsel, Corporate Secretary and head of External Affairs, plans to retire from her role in the first half of 2026. She will remai...
Business Operations and StrategyExecutive/Board ChangesRegulatory Filings and Compliance
Choice Hotels standardizes and updates executive severance framework
Neutral
Jan 6, 2026
On December 31, 2025, Choice Hotels International, Inc. updated its executive non-competition, non-solicitation and severance framework by entering into a new Non-Competition, Non-Solicitation and Severance Benefit Agreement with Chief Segment and...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.