It has been about a month since the last earnings report for Wyndham Worldwide Corp . Shares have lost about 2% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Wyndham Tops Q4 Earnings, Lags Revenues; Offers 2017 View
Wyndham posted mixed results for the fourth quarter of 2016, wherein earnings beat the Zacks Consensus Estimate while revenues missed the same.
Earnings and Revenues Discussion
Adjusted earnings of $1.35 per share beat the Zacks Consensus Estimate of $1.30 by 3.8%. Also, earnings were up 37.8% year over year on the back of growth across all of its businesses and share repurchase program.
Additionally, net revenues of $1.32 billion improved 0.7% year over year on the back of increased contribution from the hotel group and the destination network segments. Revenues, however, slightly missed the Zacks Consensus Estimate of $1.33 billion by 0.6%.
Inside the Headline Numbers
Adjusted EBITDA (excluding share-based compensation expense) grew 16.5% year over year to $318 million.
Wyndham has been operating through its three operating segments: Hotel Group, Destination Network (formerly known as Vacation Exchange and Rentals) and Vacation Ownership.
Hotel Group revenues were $316 million, up 0.6% from the year-ago figure, which reflected higher franchise fees as well as growth in the company's Wyndham Rewards credit card program. The rise was partially offset by lower reimbursable property management revenues.
Domestic same store RevPAR inched up 2.9%. At constant currency, total system-wide same store RevPAR increased 2.7% year over year, reflecting softness in the U.S. and Canadian oil markets.
Adjusted EBITDA increased 6% to $99 million. On a currency-neutral basis and excluding acquisitions, adjusted EBITDA grew 8%. This reflects higher franchise fees and growth in the company’s Wyndham Rewards credit card program.
Revenues at Destination Network were $317 million, an increase of 2.3% from the year-ago figure. Meanwhile, at constant currency and excluding acquisitions, revenues recorded an improvement of 3%.
Exchange revenues dipped 0.7% to $145 million. Nonetheless, the figure grew 1% at constant currency, as the average number of members inched up 0.2% and exchange revenue per member grew 0.4%.
Vacation rental revenues were $151 million, reflecting 4.9% year-over-year growth. Likewise, at constant currency and excluding acquisitions, vacation rental revenues improved 5% driven by a 5.3% growth in transaction volumes. Meanwhile, average net price per vacation rental remained flat.
Adjusted EBITDA increased 9% to $52 million on the back of revenue gains from continued strong vacation rental performance and lower costs.
Revenues at Vacation Ownership declined 0.1% year over year to $705 million.
Gross VOI sales in the fourth quarter remained flat, given sales office closures from restructuring and Hurricane Matthew. Number of new owners added during the quarter was up 8% year over year. Meanwhile, volume per guest (VPG) inched up 0.4% and tour flow declined 1.5% in the quarter.
Adjusted EBITDA increased 10% to $191 million on the back of lower costs.
The company also declared that its board of directors has authorized a 16% increase in the quarterly cash dividend to $0.58 from $0.50 per share. The hike will be effective from the first quarter of 2017.
2016 Results
Wyndham’s full-year adjusted earnings of $5.75 topped the Zacks Consensus Estimate of $5.70 by 0.9%. Moreover, it increased 12.5% from the year-ago quarter figure of $5.11.
Full-year revenues of $5.60 billion slightly missed the Zacks Consensus Estimate of $5.62 billion by 0.4%, but inched up 1.1% year over year.
2017 Guidance
For 2017, the company projects adjusted net income in a range of $637–$658 million. In the meantime, adjusted earnings per share are anticipated in a band of $5.90 to $6.10 per share. The Zacks Consensus Estimate for 2017 earnings is currently pegged at $6.25 per share.
Wyndham expects full-year revenues to roughly come in a range of $5.80–$5.95 billion. Adjusted EBITDA is also projected to be approximately in a band of $1.41 billion to $1.44 billion.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
VGM Scores
At this time, Wyndham's stock has an average Growth Score of 'C', though it is lagging a bit on the momentum front with an 'D'. 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.
Our style scores indicate that the stock is more suitable for value investors than growth investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.
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Why Is Wyndham (WYN) Down 2% Since the Last Earnings Report?
It has been about a month since the last earnings report for Wyndham Worldwide Corp . Shares have lost about 2% in that time frame, underperforming the market.
Will the recent negative trend continue leading up to the stock's next earnings release, or is it due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Wyndham Tops Q4 Earnings, Lags Revenues; Offers 2017 View
Wyndham posted mixed results for the fourth quarter of 2016, wherein earnings beat the Zacks Consensus Estimate while revenues missed the same.
Earnings and Revenues Discussion
Adjusted earnings of $1.35 per share beat the Zacks Consensus Estimate of $1.30 by 3.8%. Also, earnings were up 37.8% year over year on the back of growth across all of its businesses and share repurchase program.
Additionally, net revenues of $1.32 billion improved 0.7% year over year on the back of increased contribution from the hotel group and the destination network segments. Revenues, however, slightly missed the Zacks Consensus Estimate of $1.33 billion by 0.6%.
Inside the Headline Numbers
Adjusted EBITDA (excluding share-based compensation expense) grew 16.5% year over year to $318 million.
Wyndham has been operating through its three operating segments: Hotel Group, Destination Network (formerly known as Vacation Exchange and Rentals) and Vacation Ownership.
Hotel Group revenues were $316 million, up 0.6% from the year-ago figure, which reflected higher franchise fees as well as growth in the company's Wyndham Rewards credit card program. The rise was partially offset by lower reimbursable property management revenues.
Domestic same store RevPAR inched up 2.9%. At constant currency, total system-wide same store RevPAR increased 2.7% year over year, reflecting softness in the U.S. and Canadian oil markets.
Adjusted EBITDA increased 6% to $99 million. On a currency-neutral basis and excluding acquisitions, adjusted EBITDA grew 8%. This reflects higher franchise fees and growth in the company’s Wyndham Rewards credit card program.
Revenues at Destination Network were $317 million, an increase of 2.3% from the year-ago figure. Meanwhile, at constant currency and excluding acquisitions, revenues recorded an improvement of 3%.
Exchange revenues dipped 0.7% to $145 million. Nonetheless, the figure grew 1% at constant currency, as the average number of members inched up 0.2% and exchange revenue per member grew 0.4%.
Vacation rental revenues were $151 million, reflecting 4.9% year-over-year growth. Likewise, at constant currency and excluding acquisitions, vacation rental revenues improved 5% driven by a 5.3% growth in transaction volumes. Meanwhile, average net price per vacation rental remained flat.
Adjusted EBITDA increased 9% to $52 million on the back of revenue gains from continued strong vacation rental performance and lower costs.
Revenues at Vacation Ownership declined 0.1% year over year to $705 million.
Gross VOI sales in the fourth quarter remained flat, given sales office closures from restructuring and Hurricane Matthew. Number of new owners added during the quarter was up 8% year over year. Meanwhile, volume per guest (VPG) inched up 0.4% and tour flow declined 1.5% in the quarter.
Adjusted EBITDA increased 10% to $191 million on the back of lower costs.
The company also declared that its board of directors has authorized a 16% increase in the quarterly cash dividend to $0.58 from $0.50 per share. The hike will be effective from the first quarter of 2017.
2016 Results
Wyndham’s full-year adjusted earnings of $5.75 topped the Zacks Consensus Estimate of $5.70 by 0.9%. Moreover, it increased 12.5% from the year-ago quarter figure of $5.11.
Full-year revenues of $5.60 billion slightly missed the Zacks Consensus Estimate of $5.62 billion by 0.4%, but inched up 1.1% year over year.
2017 Guidance
For 2017, the company projects adjusted net income in a range of $637–$658 million. In the meantime, adjusted earnings per share are anticipated in a band of $5.90 to $6.10 per share. The Zacks Consensus Estimate for 2017 earnings is currently pegged at $6.25 per share.
Wyndham expects full-year revenues to roughly come in a range of $5.80–$5.95 billion. Adjusted EBITDA is also projected to be approximately in a band of $1.41 billion to $1.44 billion.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last one month period as none of them issued any earnings estimate revisions.
Wyndham Worldwide Corp Price and Consensus
Wyndham Worldwide Corp Price and Consensus | Wyndham Worldwide Corp Quote
VGM Scores
At this time, Wyndham's stock has an average Growth Score of 'C', though it is lagging a bit on the momentum front with an 'D'. 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.
Our style scores indicate that the stock is more suitable for value investors than growth investors.
Outlook
The stock has a Zacks Rank #3 (Hold). We are expecting an inline return from the stock in the next few months.