It has been about a month since the last earnings report for Hyatt Hotels (H Quick QuoteH - Free Report) . Shares have added about 12.1% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Hyatt Hotels due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.

Hyatt Q1 Earnings & Revenues Beat Estimates

Hyatt reported impressive first-quarter 2022 results, with earnings and revenues surpassing the Zacks Consensus Estimate. The metrics increased on a year-over-year basis.

Q1 Earnings & Revenues

During the first quarter, Hyatt reported an adjusted loss per share of 33 cents, narrower than the Zacks Consensus Estimate of a loss of 41 cents. In the prior-year quarter, the company reported an adjusted loss of $3.57 per share.

Quarterly revenues of $1,279 million beat the consensus mark of $1,098 million by 16.5%. Moreover, the top line surged 192% on a year-over-year basis.

Operating Highlights

During the quarter, adjusted EBITDA came in at $169 million against $(20) million reported in the year-ago quarter. Adjusted EBITDA margin increased to 22.6% in the first quarter against a fall of 10.7% reported in the year-ago quarter.

Segmental Details

Hyatt manages business through five reportable segments — Owned and Leased Hotels; Americas Management and Franchising; Southeast Asia, Greater China, Australia, South Korea, Japan and Micronesia (ASPAC) Management and Franchising; Europe, Africa, Middle East and Southwest Asia (EAME/SW Asia) Management and Franchising; and Apple Leisure Group Segment.

During the fourth quarter, revenues in the Owned and Leased Hotels segment totaled $271 million compared with $104 million reported in the prior-year quarter. The upside was primarily driven by improved demand across the portfolio. Owned and leased hotels RevPAR surged 217.4% from the prior-year quarter’s level. During the quarter, the average daily rate (ADR) was up 56.8% and the occupancy rate increased 27.8 percentage points from 2021 levels.

The segment’s adjusted EBITDA came in at $54 million during the first quarter against $(29) million reported in the year-ago quarter.

During the quarter, total Management and Franchise fee revenues came in at $135 million compared with $49 million reported in the year-ago quarter. The metric rose sequentially from $124 million reported in fourth-quarter 2021.

In Americas Management and Franchising, RevPAR for comparable Americas full-service hotels (during the first quarter) surged 181.7% from the prior-year quarter’s level. While ADR increased 43.3%, occupancy rates increased 25.3 percentage points from the prior-year quarter’s number.

RevPAR for comparable Americas select-service hotels was up 74.3% year over year. ADR increased 35.4% and occupancy rates improved 13.7 percentage points from the year-ago quarter’s number.

Adjusted EBITDA during the first quarter came in at $85 million compared with $28 million reported in the year-ago quarter.

In ASPAC Management and Franchising, RevPAR for comparable ASPAC full-service hotels (during the first quarter) increased 16.7% from the year-ago quarter’s figure. ADR increased 12.4% year over year. Occupancy rates increased 1.3 percentage points from the year-ago quarter’s number.

RevPAR for comparable ASPAC select-service hotels was down 6% on a year-over-year basis. ADR increased 7.4% year over year. However, occupancy rates fell 6.4 percentage points from the year-ago quarter’s number.

During the quarter, adjusted EBITDA came in at $5 million, flat from the year-ago quarter’s levels.

In EAME/SW Asia Management and Franchising, comparable EAME/SW Asia full-service hotels’ RevPAR surged 152.3% from the year-ago quarter’s level. ADR increased 55% and occupancy rates rose 18.7 percentage points from the year-ago quarter’s number.

Adjusted EBITDA during the first quarter came in at $6 million compared with $0 million reported in the year-ago quarter.

In the Apple Leisure Group (or ALG) segment, adjusted EBITDA during the first quarter came in at $56 million compared with $4 million reported in the previous quarter. Solid demand for leisure destinations (Mexico and the Caribbean) coupled with a strong level of booking activity added to the upside. During the quarter, the ALG segment added three resorts (or 1,071 rooms).

Balance Sheet

As of Mar 31, 2022, Hyatt reported cash and cash equivalents of $1,305 million compared with $960 million in the previous quarter. Total debt as of Mar 31, 2022, stood at $3,821 million compared with $3,978 million as of Dec 31, 2021.

The company stated undrawn borrowing availability of $1,496 million under Hyatt's revolving credit facility.

Other Business Updates

Coming to hotel openings, 13 new hotels (or 2,690 rooms) joined Hyatt's system in the first quarter of 2022. As of Mar 31, 2022, the company had executed management or franchise contracts for approximately 540 hotels (or 113,000 rooms).

During the quarter, the company made significant progress with respect to its $2.0 billion asset disposition commitment. The company entered into purchase and sale agreements (for its owned hotels) with unrelated third parties and also entered into long-term management agreements for each property. The properties include Hyatt Regency Indian Wells Resort & Spa, Grand Hyatt San Antonio River Walk and The Driskill. In May, the company signed a purchase and sale agreement concerning The Confidante Miami Beach. The company expects to close this deal by the second quarter 2022. The four transactions (valued at $812 million) represent more than 40% of the company's asset disposition commitment.

2022 Outlook

For 2022, the company expects adjusted selling, general and administrative expenses between $460 million and $465 million. Capital expenditures are projected at approximately $210 million. Unit growth in 2022 is anticipated to grow at approximately 6% on a net-room basis.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

The consensus estimate has shifted 57.5% due to these changes.

VGM Scores

Currently, Hyatt Hotels has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Hyatt Hotels has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Hyatt Hotels is part of the Zacks Hotels and Motels industry. Over the past month, Hilton Worldwide Holdings Inc. (HLT Quick QuoteHLT - Free Report) , a stock from the same industry, has gained 4.6%. The company reported its results for the quarter ended March 2022 more than a month ago.

Hilton Worldwide Holdings Inc. reported revenues of $1.72 billion in the last reported quarter, representing a year-over-year change of +96.9%. EPS of $0.71 for the same period compares with $0.02 a year ago.

Hilton Worldwide Holdings Inc. is expected to post earnings of $1.04 per share for the current quarter, representing a year-over-year change of +85.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.1%.

Hilton Worldwide Holdings Inc. has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.