H World Group (HTHT) AI Stock Analysis

• Market Cap: $15.51B
• Dividend Yield: 3.6%
• Average Volume (3M): 1.71M
• Price to Earnings (P/E): 20.4
• Beta (1Y): 0.47
• Revenue Growth: 5.70%
• EPS Growth: 9.53%
• Country: US
• Employees: 28,502
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Travel Lodging
• EPS (TTM): 0.59
• Shares Outstanding: 306,939,100
• 10 Day Avg. Volume: 1,526,504
• 30 Day Avg. Volume: 1,711,010
• PEG Ratio: 0.32
• Price to Book (P/B): 7.89
• Price to Sales (P/S): 4.10
• P/FCF Ratio: 13.77
• Enterprise Value/Market Cap: 8.41
• Enterprise Value/Revenue: 5.17
• Enterprise Value/Gross Profit: 13.13
• Enterprise Value/Ebitda: 15.04
• 1Y Price Target: $61.08
• Price Target Upside: 21.84% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 17.74
• Revenue Forecast (FY): $26.78B

• Rating: 62 Neutral
• Price Target: $54.00 ▲(7.72% Upside)
• Action: Downgraded Date: 03/20/26
• Date: Action: Downgraded 03/20/26

The score is primarily supported by strong profitability and cash-flow recovery, plus a constructive (though cautious) earnings-call backdrop. Offsetting this are elevated leverage and weak near-term technical momentum, while valuation is reasonable with a supportive dividend yield.

Positive Factors

Large membership base & loyalty

A 300M+ membership base that drives 74% of room nights creates durable customer retention and repeat booking economics. This scale lowers customer acquisition costs, supports higher occupancy across cycles, and strengthens cross-selling of F&B and services over the medium term.

Improved margins and profitability

Sustained improvement in gross and EBITDA margins indicates stronger cost management and operational efficiency across brands. Higher margins support reinvestment in franchising and technology, and provide buffer against demand swings, enhancing durable earnings quality and cash generation.

Asset-light franchised growth

Rapid growth in manachised/franchised revenue demonstrates scalable, asset-light expansion that boosts returns without heavy capex. This model accelerates room count growth, improves capital efficiency, and sustainably diversifies revenue and profit streams across lower-capital segments.

Negative Factors

High leverage on balance sheet

A Debt/Equity of 3.11 signals significant leverage that raises refinancing, interest-rate and liquidity risks. High debt levels constrain strategic flexibility, elevate fixed costs, and can amplify downturn impacts, making sustained investment and dividend policy more vulnerable over the medium term.

RevPAR stability concerns

Stagnant RevPAR amid macro and business-travel weakness limits revenue per room upside and pressures long-term unit economics. If business demand remains soft, the company may need to rely on discounts or occupancy pushes, compressing margins and slowing durable profit growth.

Moderate TTM revenue growth

A TTM revenue rise of just 2.14% points to modest top-line momentum versus room expansion. Without stronger RevPAR or faster franchised/manachised rollouts, revenue growth may remain constrained, limiting operating leverage and the company's ability to compound earnings at a higher rate.

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 primarily generates revenue from (1) hotel operations from leased-and-owned hotels and (2) fees from franchised and managed hotels. 1) Leased-and-owned hotel revenue (operational model): - Under the leased-and-owned model, H World leases hotel properties (or otherwise operates properties it controls) and runs the hotels directly. Revenue is recorded largely as room revenue (and, where applicable, food & beverage and other ancillary services). The company bears operating costs such as rent/lease payments, staffing, utilities, maintenance, and marketing, so profitability depends on occupancy, average daily rate (ADR), and cost control. 2) Franchised and managed hotel revenue (asset-light model): - Under the franchised model, H World grants third-party hotel owners the right to operate under its brands and systems. In exchange, the company earns franchise and service fees. These commonly include initial franchise fees and ongoing fees tied to hotel performance or a formula (e.g., based on room revenue or other agreed metrics). - Under the managed-hotel model, H World operates hotels on behalf of third-party owners for management fees. These fees may include a base management fee and, where applicable, incentive or performance-based fees, depending on contract terms. - In both franchised and managed arrangements, H World benefits from scale by providing standardized brand standards, operating processes, procurement support, training, and centralized technology (e.g., reservation and property management systems), which help drive fee revenue with lower capital intensity than owning/operating properties. 3) Membership/loyalty and distribution-related contributions: - The company’s centralized reservation channels and loyalty program help generate bookings across its network, supporting both owned/leased hotel revenue and franchised/managed fee income. Specific monetization terms (e.g., separate membership fees or distribution fees) are not available here; null. 4) Other revenue: - H World may record other hotel-related income (e.g., ancillary services and other items associated with its operations). A breakdown of specific other revenue lines is not available here; null. Key factors influencing earnings: - Network growth (number of hotels/rooms added under franchise/management and leased-and-owned openings/closures). - Operating metrics such as occupancy, ADR, and RevPAR, which affect owned/leased hotel revenue and can influence performance-based fees. - Brand strength and the ability to attract and retain franchisees/owners. - Cost structure for leased-and-owned hotels (especially rent/lease costs and labor) and efficiency from centralized systems and procurement. Significant partnerships: - Specific, current significant partnerships (by counterparty and economic terms) are not available here; null.

H World Group Financial Statement Overview

Summary

Strong post-pandemic profitability and cash generation (healthy margins and solid free-cash-flow conversion) support the score, but it is held back by a meaningfully leveraged balance sheet (debt ~2.8–3.0x equity) and a sharply negative 2025 revenue growth print, increasing cyclicality risk.

Income Statement

Profitability has rebounded strongly since the 2020–2022 loss period, with 2023–2025 showing healthy operating performance and 2025 posting ~20% net margin and ~30% EBITDA margin. However, the latest annual revenue growth is sharply negative (2025), and margins also eased versus 2024, which raises questions about demand normalization and/or reporting comparability despite still-solid earnings.

Balance Sheet

The balance sheet remains meaningfully leveraged, with debt running around ~2.8–3.0x equity in 2023–2025 (and substantially higher in 2021–2022), limiting flexibility in a cyclical lodging environment. A positive offset is strong profitability in recent years, as reflected in high returns on equity in 2023–2025, but the overall risk profile is still constrained by the elevated debt load.

Cash Flow

Cash generation is a clear strength: operating cash flow and free cash flow are consistently positive in 2022–2025, and free cash flow tracks net income well (roughly ~0.88–0.90x in 2023–2025). The main drawback is that cash flow coverage of debt is only moderate (and dipped in 2025 versus 2024), meaning deleveraging capacity is good but not exceptionally strong relative to the debt base.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	24.62B	23.89B	21.88B	13.86B	12.79B
Gross Profit	9.70B	9.86B	7.54B	1.60B	1.50B
EBITDA	7.42B	6.46B	7.15B	259.00M	1.50B
Net Income	4.94B	3.05B	4.08B	-1.81B	-465.00M
Balance Sheet
Total Assets	64.82B	62.55B	63.53B	61.51B	63.27B
Cash, Cash Equivalents and Short-Term Investments	15.44B	11.08B	9.13B	5.37B	7.71B
Total Debt	36.09B	35.45B	35.88B	43.89B	44.16B
Total Liabilities	51.85B	50.28B	51.28B	52.70B	52.23B
Stockholders Equity	12.81B	12.18B	12.13B	8.73B	10.94B
Cash Flow
Free Cash Flow	7.34B	6.73B	6.77B	511.00M	-333.00M
Operating Cash Flow	8.15B	7.62B	7.67B	1.56B	1.34B
Investing Cash Flow	-1.01B	-2.27B	-1.48B	-522.00M	-1.40B
Financing Cash Flow	-4.19B	-5.58B	-3.72B	-1.39B	-1.80B

H World Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 50.13
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HTHT, the sentiment is Negative. The current price of 50.13 is below the 20-day moving average (MA) of 52.47, below the 50-day MA of 51.31, and above the 200-day MA of 41.66, indicating a neutral trend. The MACD of -0.36 indicates Positive momentum. The RSI at 42.81 is Neutral, neither overbought nor oversold. The STOCH value of 31.21 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HTHT.

H World Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
IHG	71 Outperform	$19.29B	28.95	-23.50%	1.21%	8.89%	23.20%
H	68 Neutral	$13.43B	-294.43	-1.50%	0.36%	2.61%	-106.74%
MAR	68 Neutral	$84.73B	46.80	-79.90%	0.84%	4.68%	-1.10%
HTHT	62 Neutral	$15.51B	20.45	42.78%	3.60%	5.70%	9.53%
HLT	62 Neutral	$67.09B	46.53	-30.22%	0.21%	6.68%	48.03%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
WH	61 Neutral	$5.73B	-23.83	35.09%	2.13%	3.38%	38.04%