MELIA HOTELS INTERNATIONAL (MEL) AI Stock Analysis

• Market Cap: €1.76B
• Dividend Yield: 1.84%
• Average Volume (3M): 256.45K
• Price to Earnings (P/E): 10.8
• Beta (1Y): 0.92
• Revenue Growth: 3.31%
• EPS Growth: 44.82%
• Country: ES
• Employees: 18,362
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Travel Lodging
• EPS (TTM): 0.09
• Shares Outstanding: 220,400,000
• 10 Day Avg. Volume: 311,195
• 30 Day Avg. Volume: 256,451
• PEG Ratio: 0.50
• Price to Book (P/B): 2.07
• Price to Sales (P/S): 0.84
• P/FCF Ratio: 5.16
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €8.29
• Price Target Upside: 3.59% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4
• EPS Forecast (FY): 0.68
• Revenue Forecast (FY): €2.14B

• Rating: 66 Neutral
• Price Target: €8.50 ▲(6.25% Upside)
• Action: Downgraded Date: 03/04/26
• Date: Action: Downgraded 03/04/26

The score is driven primarily by improved profitability and solid free cash flow, tempered by a debt-heavy balance sheet and the pronounced 2025 revenue decline. Technical signals are broadly neutral, while valuation (P/E ~10.8 and ~1.8% yield) provides some support.

Positive Factors

Profitability Recovery

Meliá has shifted from pandemic losses to sustainably positive margins, with mid-teens operating margin and net margin ~8.2% in 2025. This improvement indicates durable cost control and pricing power across its portfolio, supporting reinvestment capacity and higher returns on equity.

Strong Free Cash Flow

Consistent positive free cash flow (≈€338M in 2025) and normalized operating cash flow provide lasting financial flexibility. Reliable FCF since 2021 supports deleveraging, recurring capital needs, and funding for brand investment or returns to shareholders even through travel cycles.

Diversified Business Model & Brand

Meliá’s global brand portfolio and mix of owner-managed hotels plus franchise/management contracts create multiple revenue streams. This structural diversification—rooms, F&B, events, management fees and partnerships—reduces single-market exposure and supports steady long-term revenue generation.

Negative Factors

Elevated Leverage

Debt near 2.9x equity leaves the company more exposed to rising rates and refinancing risk. Elevated leverage constrains strategic optionality, increases interest-cost sensitivity during downturns, and lengthens the time needed to rebuild balance-sheet resilience despite improving earnings.

Pronounced Revenue Volatility

A near-47% revenue drop in 2025 highlights material exposure to travel demand swings and operational cyclicality. Such large top-line swings reduce earnings visibility, complicate multi-year planning, and can stress cash flow and margins if weaker demand persists or recurs.

Suboptimal Cash Conversion

OCF at around 50% of EBIT points to working-capital timing or non-cash items limiting cash conversion. Weaker conversion reduces the practical benefit of reported earnings for deleveraging and investment, making the company more reliant on financing when cash flow timing deteriorates.

MELIA HOTELS INTERNATIONAL Business Overview & Revenue Model

Company Description

Meliá Hotels International, S.A. owns, manages, operates, leases, and franchises hotels worldwide. The company operates approximately 380 hotels under the Gran Meliá Hotels & Resorts, Paradisus by Meliá, ME by Meliá, Meliá Hotels & Resorts, INNSIDE by Meliá, Sol by Meliá, TRYP by Wyndham, and Circle by Melia brand names, as well as Meliá PRO, a platform for B2B clients. It also operates Club Meliá vacation club; develops and operates real estate properties; and engages in the casinos and tour-operator activities. The company was formerly known as Sol Meliá, S.A. and changed its name to Meliá Hotels International, S.A. in June 2011. Meliá Hotels International, S.A. was founded in 1956 and is based in Palma de Mallorca, Spain.

How the Company Makes Money

MELIA HOTELS INTERNATIONAL generates revenue primarily through the operation of its hotels and resorts. The company's revenue model includes several key streams: room bookings, which account for a significant portion of total revenue; food and beverage sales from on-site restaurants and bars; and income from hosted events and meetings. Additionally, MELIA benefits from franchise fees and management contracts with hotel owners, allowing them to leverage their brand and operational expertise. Significant partnerships with travel agencies, online booking platforms, and loyalty programs further contribute to revenue generation, as they enhance visibility and attract a broader customer base. Economic factors, tourism trends, and global travel demand also play critical roles in influencing the company's financial performance.

MELIA HOTELS INTERNATIONAL Financial Statement Overview

Summary

Strong post-pandemic turnaround with solid profitability (net margin ~8.2% in 2025; operating margin mid-teens) and consistently positive free cash flow (~€338M in 2025). Offsetting risks are elevated leverage (debt ~2.9x equity in 2025) and a sharp 2025 revenue decline (~46.8% vs. 2024), which increases cyclicality and volatility concerns.

Income Statement

Profitability has materially improved from the 2020–2021 losses to solid positive earnings in 2022–2025, with net margin reaching ~8.2% in 2025 and operating margin holding in the mid-teens. Revenue also recovered strongly through 2024, supporting the earnings rebound. The key concern is the sharp revenue decline shown in 2025 (down ~46.8% vs. 2024), which introduces volatility risk despite margins remaining healthy.

Balance Sheet

Leverage remains elevated, with debt running roughly 2.9x equity in 2025 (and higher in prior years), leaving the company more exposed to cyclical demand and refinancing conditions typical for lodging. A positive offset is improving equity and strong returns on equity (~20% in 2025), indicating better earnings power versus the post-pandemic period. Overall, the balance sheet is improved but still debt-heavy.

Cash Flow

Cash generation is solid and has normalized after 2020’s negative cash flow, with operating cash flow of ~€472M and free cash flow of ~€338M in 2025. Free cash flow has been consistently positive since 2021, supporting deleveraging capacity and resilience. However, cash conversion is not exceptionally strong, with operating cash flow running at roughly half of EBIT in 2024–2025, suggesting some working-capital or non-cash timing headwinds.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.09B	2.08B	2.01B	1.93B	1.68B	827.21M
Gross Profit	1.89B	700.14M	1.80B	1.03B	1.50B	735.62M
EBITDA	604.39M	564.54M	568.59M	515.37M	520.96M	144.47M
Net Income	172.31M	170.07M	140.63M	117.73M	110.69M	-192.90M
Balance Sheet
Total Assets	4.69B	4.66B	4.58B	4.44B	4.35B	4.21B
Cash, Cash Equivalents and Short-Term Investments	303.06M	235.05M	174.99M	186.82M	168.95M	100.56M
Total Debt	2.51B	2.43B	2.44B	2.81B	2.83B	2.98B
Total Liabilities	3.57B	3.47B	3.51B	3.87B	3.90B	3.89B
Stockholders Equity	797.43M	843.74M	758.17M	512.94M	413.19M	303.35M
Cash Flow
Free Cash Flow	0.00	338.00M	338.21M	275.00M	380.80M	48.38M
Operating Cash Flow	0.00	471.51M	417.43M	397.22M	493.00M	126.85M
Investing Cash Flow	0.00	-186.74M	-66.90M	-118.82M	-133.09M	87.52M
Financing Cash Flow	0.00	-212.50M	-343.35M	-260.16M	-297.39M	-232.97M

MELIA HOTELS INTERNATIONAL Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 8.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ES:MEL, the sentiment is Positive. The current price of 8 is above the 20-day moving average (MA) of 7.95, above the 50-day MA of 7.83, and above the 200-day MA of 7.49, indicating a bullish trend. The MACD of 0.13 indicates Negative momentum. The RSI at 51.87 is Neutral, neither overbought nor oversold. The STOCH value of 64.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ES:MEL.

MELIA HOTELS INTERNATIONAL Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MEL	66 Neutral	€1.76B	10.80	23.93%	1.84%	3.31%	44.82%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%