Choice Hotels (CHH) AI Stock Analysis

• Market Cap: $4.22B
• Dividend Yield: 1.26%
• Average Volume (3M): 600.95K
• Price to Earnings (P/E): 11.2
• Beta (1Y): 0.55
• Revenue Growth: 2.76%
• EPS Growth: 56.02%
• Country: US
• Employees: 1,695
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Travel Lodging
• EPS (TTM): 2.10
• Shares Outstanding: 46,272,617
• 10 Day Avg. Volume: 572,243
• 30 Day Avg. Volume: 600,947
• 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: 1.64
• Enterprise Value/Revenue: 4.35
• Enterprise Value/Gross Profit: 8.45
• Enterprise Value/Ebitda: 10.89
• 1Y Price Target: $103.88
• Price Target Upside: 13.83% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 9
• EPS Forecast (FY): 6.94
• Revenue Forecast (FY): $1.57B

• Rating: 65 Neutral
• Price Target: $94.00 ▲(3.00% Upside)

Choice Hotels' overall stock score is driven by strong earnings call results and favorable valuation, indicating potential for future growth. However, financial risks due to high leverage and bearish technical indicators weigh down the score.

Positive Factors

International Expansion

The significant growth in international markets, with a 35% increase in adjusted EBITDA, indicates strong global demand and diversification, enhancing long-term revenue potential.

Strong Pipeline

The robust pipeline with 98% of rooms in higher revenue brands suggests future growth and profitability, as these projects are expected to be 1.7 times more accretive than the current portfolio.

Business Travel Growth

The increase in business travel and group revenue indicates a recovery in corporate demand, supporting stable occupancy rates and revenue growth in the long term.

Negative Factors

High Leverage

The significant leverage poses financial risks, potentially limiting flexibility and increasing vulnerability to economic downturns, impacting long-term financial stability.

Declining Free Cash Flow

The decline in free cash flow growth could constrain investment capabilities and limit the company's ability to capitalize on new opportunities, affecting future growth.

U.S. RevPAR Decline

The decline in U.S. RevPAR due to softer government and international inbound demand may signal challenges in maintaining domestic market strength, affecting revenue stability.

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 franchise fees paid by hotel owners who operate under its brands. These fees typically include an initial franchise fee, ongoing royalties based on a percentage of room revenue, and additional fees for marketing and reservation services. The company also earns income from ancillary services, such as training, technology solutions, and property management support. Significant partnerships with online travel agencies and global distribution systems enhance its market presence and drive bookings, contributing to its overall earnings. Moreover, Choice Hotels' loyalty program, Choice Privileges, encourages repeat business and customer retention, further bolstering its revenue stream.

Choice Hotels Financial Statement Overview

Summary

Choice Hotels demonstrates strong profitability and revenue growth, with efficient operations. However, high leverage and negative return on equity pose significant financial risks. Stable cash flow generation is offset by declining free cash flow growth, impacting financial flexibility.

Income Statement

Choice Hotels has demonstrated consistent revenue growth, with a TTM revenue growth rate of 22.9%. The company maintains strong profitability metrics, with a gross profit margin of 52.4% and a net profit margin of 19.5% in the TTM period. EBIT and EBITDA margins are also robust at 31.3% and 34.7%, respectively, indicating efficient operations. However, the growth rate has slowed compared to previous years, which could be a concern if the trend continues.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of -76.7 in the TTM period, indicating significant leverage and potential financial risk. Return on equity is negative, reflecting challenges in generating returns for shareholders. The equity ratio is low, suggesting a heavy reliance on debt financing. These factors highlight financial instability and potential risks if market conditions worsen.

Cash Flow

Cash flow analysis shows a decline in free cash flow growth, with a negative growth rate of -5.0% in the TTM period. The operating cash flow to net income ratio is 0.71, indicating moderate cash generation relative to net income. The free cash flow to net income ratio is 0.78, suggesting that a significant portion of net income is converted into free cash flow. While cash flow metrics are generally stable, the decline in free cash flow growth is a concern.

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	821.50M	744.17M	690.28M	700.05M	599.60M	311.16M
EBITDA	637.42M	553.64M	440.39M	544.52M	473.67M	150.49M
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	210.53M	173.55M	178.26M	277.11M	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: 91.26
• 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 91.26 is below the 20-day moving average (MA) of 93.51, below the 50-day MA of 98.79, and below the 200-day MA of 120.44, indicating a bearish trend. The MACD of -2.52 indicates Negative momentum. The RSI at 42.20 is Neutral, neither overbought nor oversold. The STOCH value of 51.81 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	74 Outperform	$14.00B	26.41	32.62%	3.86%	6.06%	8.01%
ATAT	72 Outperform	$5.30B	26.23	45.97%	2.30%	35.65%	24.81%
IHG	66 Neutral	$19.94B	27.96	―	1.29%	8.89%	23.20%
CHH	65 Neutral	$4.22B	11.20	1418.13%	1.26%	2.76%	56.02%
WH	65 Neutral	$5.58B	17.00	57.98%	2.23%	3.38%	38.04%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
H	59 Neutral	$15.61B	―	-2.45%	0.36%	2.61%	-106.74%

Choice Hotels Corporate Events

Choice Hotels Reports Strong Q3 2025 Growth

Choice Hotels International, Inc., a prominent global lodging franchisor, operates over 7,500 hotels across 47 countries, offering a diverse portfolio of 22 brands ranging from upscale to economy accommodations. In its third-quarter 2025 earnings report, Choice Hotels International showcased significant growth, with net income reaching $180 million, a substantial increase from $105.7 million in the same period of 2024. The company achieved a record adjusted EBITDA of $190.1 million, marking a 7% increase compared to the previous year. Despite a slight decline in adjusted diluted EPS due to acquisition-related expenses, the company reported a 2.3% growth in global net rooms, driven by a 3.3% expansion in higher revenue segments. Notably, Choice Hotels expanded its international presence, surpassing 150,000 rooms globally and entering new markets such as Argentina and Australia. The company also saw a 54% increase in global franchise agreements awarded, highlighting its strategic growth initiatives. Looking ahead, Choice Hotels remains optimistic about its future prospects, with plans to double its international profitability by 2027 and a robust pipeline concentrated in upscale, extended stay, and midscale segments, positioning the company for sustained long-term growth.

Choice Hotels’ Earnings Call: Growth Amid Challenges

Choice Hotels International’s recent earnings call painted a picture of robust growth and strategic progress, despite some challenges in specific demand segments. The company reported significant growth in adjusted EBITDA and international expansion, with strong pipeline metrics and business travel revenue gains. However, U.S. RevPAR performance and specific demand segments, such as government and international inbound travel, posed challenges. Overall, the strategic progress and financial results indicate a positive trajectory for Choice Hotels.

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.