H World Group (HTHT) AI Stock Analysis

• Market Cap: $13.31B
• Dividend Yield: 4.04%
• Average Volume (3M): 1.76M
• Price to Earnings (P/E): 26.7
• Beta (1Y): 0.36
• Revenue Growth: 5.70%
• EPS Growth: 7.71%
• Country: US
• Employees: 28,502
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Travel Lodging
• EPS (TTM): 0.67
• Shares Outstanding: 306,939,100
• 10 Day Avg. Volume: 2,621,723
• 30 Day Avg. Volume: 1,758,742
• PEG Ratio: -1.05
• Price to Book (P/B): 6.17
• Price to Sales (P/S): 3.14
• P/FCF Ratio: 11.34
• Enterprise Value/Market Cap: 1.21
• Enterprise Value/Revenue: 0.66
• Enterprise Value/Gross Profit: 1.74
• Enterprise Value/Ebitda: 2.18
• 1Y Price Target: $47.50
• Price Target Upside: 7.76% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 2.04
• Revenue Forecast (FY): $3.51B

• Rating: 76 Outperform
• Price Target: $49.00 ▲(11.16% Upside)

H World Group's strong financial performance and positive earnings call sentiment are the primary drivers of its stock score. The company's robust revenue growth and profitability, along with successful strategic expansions, are significant strengths. However, high debt levels and potential overbought technical indicators present risks that slightly offset these positives.

Positive Factors

Revenue and Profit Growth

Strong revenue and profit growth indicate effective business strategies and operational efficiency, supporting long-term financial health.

Membership Growth

Robust membership growth enhances customer loyalty and recurring revenue, strengthening market position and competitive advantage.

Network Expansion

Expanding hotel network increases market reach and potential revenue streams, reinforcing the company's growth trajectory.

Negative Factors

High Debt Levels

High debt levels can strain financial flexibility and increase risk, necessitating careful management to ensure long-term stability.

RevPAR Stability Concerns

Stable RevPAR amidst macro uncertainties could pressure revenue growth, impacting profitability and strategic planning.

Moderate Future Revenue Growth

Moderate revenue growth guidance suggests potential challenges in maintaining past growth rates, affecting future earnings potential.

H World Group Business Overview & Revenue Model

Company Description

H World Group Limited, together with its subsidiaries, develops leased and owned, manachised, and franchised hotels primarily in the People's Republic of China. The company operates hotels under its own brands, such as HanTing Hotel, Ni Hao Hotel, Hi Inn, Elan Hotel, Zleep Hotels, Ibis Hotel, JI Hotel, Orange Hotel, Starway Hotel, Ibis Styles Hotel, CitiGO Hotel, Crystal Orange Hotel, IntercityHotel, Manxin Hotel, Mercure Hotel, Madison Hotel, Novotel Hotel, Joya Hotel, Blossom House, Steigenberger Hotels & Resorts, MAXX by Steigenberger, Jaz in the City, Grand Mercure, Steigenberger Icon, and Song Hotels. As of June 30, 2022, it operated 8,176 hotels with 773,898 rooms. The company was formerly known as Huazhu Group Limited and changed its name to H World Group Limited in June 2022. H World Group Limited was founded in 2005 and is headquartered in Shanghai, the People's Republic of China.

How the Company Makes Money

H World Group generates revenue primarily through the operation of its hotel properties, which encompasses room rentals, food and beverage sales, and additional services offered to guests. The company operates on a franchise model, earning fees from franchisees who operate hotels under its various brands, as well as management fees for managing hotels on behalf of owners. Key revenue streams include occupancy rates, average daily rates (ADR), and ancillary services such as meeting and event spaces. Furthermore, strategic partnerships with travel agencies and online travel platforms enhance its visibility and booking capabilities, contributing significantly to overall earnings.

H World Group Financial Statement Overview

Summary

H World Group shows strong financial performance with impressive revenue growth and profitability. The company effectively generates cash and delivers high returns on equity. However, high debt levels pose a potential risk, necessitating a focus on debt management to ensure long-term stability.

Income Statement

H World Group has demonstrated strong revenue growth, particularly in the TTM period with a 15.8% increase. The company maintains healthy profitability with a gross profit margin of 37.4% and a net profit margin of 13.7% in the TTM. EBIT and EBITDA margins are also robust at 23.2% and 28.6%, respectively, indicating efficient operations. However, the gross profit margin has slightly decreased from the previous year, suggesting potential cost pressures.

Balance Sheet

The balance sheet shows a high debt-to-equity ratio of 3.35 in the TTM, which indicates significant leverage and potential financial risk. However, the return on equity is strong at 27.7%, reflecting effective use of equity to generate profits. The equity ratio is moderate, suggesting a balanced asset structure. The company should focus on managing its debt levels to mitigate financial risk.

Cash Flow

Cash flow analysis reveals a positive trend with a 6.9% growth in free cash flow in the TTM. The operating cash flow to net income ratio is 0.49, indicating solid cash generation relative to net income. The free cash flow to net income ratio is high at 0.88, showing effective conversion of profits into cash. Continued focus on cash flow management will be crucial for sustaining growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	24.29B	23.89B	21.88B	13.86B	12.79B	10.20B
Gross Profit	9.25B	9.86B	7.54B	1.60B	1.50B	467.00M
EBITDA	7.36B	6.46B	7.15B	259.00M	1.50B	-384.00M
Net Income	3.76B	3.05B	4.08B	-1.81B	-465.00M	-2.19B
Balance Sheet
Total Assets	64.78B	62.55B	63.53B	61.51B	63.27B	65.80B
Cash, Cash Equivalents and Short-Term Investments	12.45B	11.08B	9.13B	5.37B	7.71B	10.93B
Total Debt	37.77B	35.45B	35.88B	43.89B	44.16B	44.98B
Total Liabilities	52.49B	50.28B	51.28B	52.70B	52.23B	54.37B
Stockholders Equity	12.15B	12.18B	12.13B	8.73B	10.94B	11.33B
Cash Flow
Free Cash Flow	6.79B	6.62B	6.77B	511.00M	-333.00M	-1.17B
Operating Cash Flow	7.64B	7.52B	7.67B	1.56B	1.34B	609.00M
Investing Cash Flow	-1.94B	-2.24B	-1.48B	-522.00M	-1.40B	-8.10B
Financing Cash Flow	-3.48B	-5.50B	-3.72B	-1.39B	-1.80B	883.00M

H World Group Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 44.08
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HTHT, the sentiment is Positive. The current price of 44.08 is above the 20-day moving average (MA) of 41.50, above the 50-day MA of 39.49, and above the 200-day MA of 35.33, indicating a bullish trend. The MACD of 1.81 indicates Negative momentum. The RSI at 64.65 is Neutral, neither overbought nor oversold. The STOCH value of 80.85 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HTHT.

H World Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HTHT	76 Outperform	$13.31B	26.72	32.28%	4.04%	5.70%	7.71%
WH	65 Neutral	$5.34B	16.46	57.98%	2.23%	3.38%	38.04%
HLT	63 Neutral	$62.06B	38.83	―	0.22%	6.68%	48.03%
MAR	62 Neutral	$76.27B	29.88	―	0.93%	4.68%	-1.10%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
IHG	60 Neutral	$18.70B	26.31	―	1.38%	8.89%	23.20%
H	59 Neutral	$14.25B	―	-2.45%	0.41%	2.61%	-106.74%

H World Group Corporate Events

H World Group Adjusts Convertible Notes Conversion Rate Following Dividend Declaration

On August 20, 2025, H World Group Limited declared a cash dividend of US$0.081 per ordinary share, or US$0.81 per American Depositary Share, with entitlement for holders as of September 9, 2025. Consequently, the conversion rate for its 3.00% convertible senior notes due 2026 was adjusted from 26.1574 to 26.7233, effective immediately after the close of business on September 9, 2025. This adjustment aligns with the terms of the notes’ indenture, potentially impacting the company’s financial operations and stakeholder interests.