H World Group (HTHT) AI Stock Analysis

• Market Cap: $14.67B
• Dividend Yield: 3.6%
• Average Volume (3M): 1.20M
• Price to Earnings (P/E): 28.4
• Beta (1Y): 0.39
• Revenue Growth: 5.70%
• EPS Growth: 9.53%
• Country: US
• Employees: 28,502
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Travel Lodging
• EPS (TTM): 0.68
• Shares Outstanding: 306,939,100
• 10 Day Avg. Volume: 1,024,442
• 30 Day Avg. Volume: 1,204,146
• PEG Ratio: -1.05
• Price to Book (P/B): 6.17
• Price to Sales (P/S): 3.14
• P/FCF Ratio: 11.16
• Enterprise Value/Market Cap: 9.19
• Enterprise Value/Revenue: 5.43
• Enterprise Value/Gross Profit: 14.19
• Enterprise Value/Ebitda: 17.25
• 1Y Price Target: $50.48
• Price Target Upside: 3.04% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: $55.00 ▲(12.27% Upside)

H World Group's stock is supported by strong financial performance and technical indicators, reflecting a robust recovery and growth trajectory. The earnings call provided a cautiously optimistic outlook, with significant membership and revenue growth. However, high leverage and concerns about future revenue growth slightly temper the overall score.

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 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 has shown strong recovery and growth in its financial statements. The income statement indicates strong profitability and revenue growth, while the balance sheet shows high leverage but effective equity utilization. Cash flow metrics are positive, indicating good cash management. The company should focus on managing its debt levels to mitigate potential risks.

Income Statement

H World Group has shown a strong recovery in its income statement metrics over the past few years. The TTM Gross Profit Margin stands at 38.07%, indicating efficient cost management. The Net Profit Margin has improved significantly to 15.48% in TTM, reflecting enhanced profitability. Revenue growth is steady, with a 2.14% increase in TTM, following a substantial growth from previous years. EBIT and EBITDA margins are healthy at 25.57% and 30.80% respectively, showcasing operational efficiency. However, the company faced challenges in 2020 with negative margins, but the recovery trajectory is promising.

Balance Sheet

The balance sheet reflects a high Debt-to-Equity Ratio of 3.11 in TTM, indicating significant leverage, which could pose risks if not managed properly. However, the Return on Equity is strong at 32.03%, suggesting effective use of equity to generate profits. The Equity Ratio is moderate, showing a balanced asset structure. The company has improved its equity position since 2020, but the high leverage remains a concern.

Cash Flow

Cash flow metrics indicate a positive trend with a Free Cash Flow Growth Rate of 13.2% in TTM. The Operating Cash Flow to Net Income Ratio is 0.39, and the Free Cash Flow to Net Income Ratio is 0.89, both reflecting a solid cash generation capability relative to net income. Despite past fluctuations, the company has stabilized its cash flows, supporting its operational and financial activities.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	24.80B	23.89B	21.88B	13.86B	12.79B	10.20B
Gross Profit	9.50B	9.86B	7.54B	1.60B	1.50B	467.00M
EBITDA	7.82B	6.46B	7.15B	259.00M	1.50B	-384.00M
Net Income	3.96B	3.05B	4.08B	-1.81B	-465.00M	-2.07B
Balance Sheet
Total Assets	63.55B	62.55B	63.53B	61.51B	63.27B	65.80B
Cash, Cash Equivalents and Short-Term Investments	13.16B	11.08B	9.13B	5.37B	7.71B	10.93B
Total Debt	37.16B	35.45B	35.88B	43.89B	44.16B	44.98B
Total Liabilities	51.53B	50.28B	51.28B	52.70B	52.23B	54.37B
Stockholders Equity	11.88B	12.18B	12.13B	8.73B	10.94B	11.33B
Cash Flow
Free Cash Flow	6.91B	6.73B	6.77B	511.00M	-333.00M	-1.17B
Operating Cash Flow	7.74B	7.62B	7.67B	1.56B	1.34B	609.00M
Investing Cash Flow	-5.19B	-2.27B	-1.48B	-522.00M	-1.40B	-8.10B
Financing Cash Flow	-3.25B	-5.58B	-3.72B	-1.39B	-1.80B	883.00M

H World Group Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 48.99
• 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 Neutral. The current price of 48.99 is below the 20-day moving average (MA) of 49.42, above the 50-day MA of 48.06, and above the 200-day MA of 38.74, indicating a neutral trend. The MACD of 0.32 indicates Positive momentum. The RSI at 43.41 is Neutral, neither overbought nor oversold. The STOCH value of 21.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HTHT.

H World Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HTHT	74 Outperform	$14.67B	28.36	32.28%	3.60%	5.70%	9.53%
IHG	70 Neutral	$20.32B	28.62	―	1.21%	8.89%	23.20%
WH	67 Neutral	$5.50B	16.76	57.98%	2.13%	3.38%	38.04%
HLT	67 Neutral	$69.38B	43.37	―	0.21%	6.68%	48.03%
MAR	65 Neutral	$84.61B	33.77	―	0.84%	4.68%	-1.10%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
H	56 Neutral	$14.85B	-169.49	-2.45%	0.36%	2.61%	-106.74%