We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Choice Hotels (CHH) Up 1.2% Since Last Earnings Report: Can It Continue?
Read MoreHide Full Article
It has been about a month since the last earnings report for Choice Hotels (CHH - Free Report) . Shares have added about 1.2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Choice 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.
Choice Hotels Q1 Earnings Beat, Revenues Lag Estimates
Choice Hotels reported first-quarter 2022 results, wherein earnings surpassed the Zacks Consensus Estimate, but revenues missed the same. The top and bottom lines, however, increased on a year-over-year basis.
Q1 Earnings and Revenues
Choice Hotels reported adjusted earnings of $1.03 per share, which beat the consensus mark of 93 cents by 10.8%. The bottom line improved 81% from the prior-year quarter’s figure of 50 cents.
In the quarter under review, total revenues were $257.7 million, which marginally missed the consensus mark of $258 million by 0.2%. However, the metric rose 41% from the year-ago quarter’s levels.
Franchising & Royalties
During the first quarter, domestic royalty fees totaled $87 million, up 38% compared with the same period of 2021. Domestic system-wide revenue per available room (RevPAR) increased 10.4% from the first-quarter 2019 levels. The uptick was driven by a 9.3% growth in average daily rate (ADR) and a 60 basis-point increase in occupancy levels.
In the first quarter, the company awarded 93 domestic franchise agreements, up 4% year over year. The company's extended-stay portfolio continues to expand its presence.
As of Mar 31, 2022, the number of domestic hotels and rooms declined 1.2% and 2.8% year over year, respectively.
Operating Results
Total operating expenses during first-quarter 2022 increased 14% year over year to $158.4 million. Adjusted EBITDA rose 53.2% from the prior-year quarter’s figure to $96.6 million.
Balance Sheet
As of Mar 31, 2022, Choice Hotels had cash and cash equivalents of $527.2 million compared with $511.6 million on Dec 31, 2021.
Long-term debt at the end of the first quarter was $844.4 million compared with $844.1 million reported in the fourth-quarter 2021-end. Goodwill, as a percentage of total assets, came in at 8.1% compared with 8.2% at the fourth-quarter 2021-end.
2022 Outlook
For 2022, the company expects to witness adjusted EBITDA and RevPAR growth compared to 2021. In 2022, the company expects RevPAR to increase in the range of 10% and 13% as compared to the full-year 2019.
Other Updates
Coming to the extended-stay portfolio, the company witnessed rapid expansion, thereby reaching 478 domestic hotels as of Mar 31, 2022. This highlighted an increase of 5.3% on a year-over-year basis. The domestic extended-stay pipeline comprised 350 hotels awaiting conversion, under construction or approved for development.
As of Mar 31, 2022, the company’s total domestic pipeline of hotels awaiting conversion, under construction or approved for development, reached 864 hotels, thereby reflecting nearly 78,000 rooms.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, Choice Hotels has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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 trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Choice Hotels has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Choice Hotels is part of the Zacks Hotels and Motels industry. Over the past month, Marriott Vacations Worldwide (VAC - Free Report) , a stock from the same industry, has gained 8.7%. The company reported its results for the quarter ended March 2022 more than a month ago.
Marriott reported revenues of $1.05 billion in the last reported quarter, representing a year-over-year change of +38.6%. EPS of $1.70 for the same period compares with -$0.49 a year ago.
For the current quarter, Marriott is expected to post earnings of $2.29 per share, indicating a change of +169.4% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.6% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Marriott. Also, the stock has a VGM Score of B.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Choice Hotels (CHH) Up 1.2% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Choice Hotels (CHH - Free Report) . Shares have added about 1.2% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Choice 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.
Choice Hotels Q1 Earnings Beat, Revenues Lag Estimates
Choice Hotels reported first-quarter 2022 results, wherein earnings surpassed the Zacks Consensus Estimate, but revenues missed the same. The top and bottom lines, however, increased on a year-over-year basis.
Q1 Earnings and Revenues
Choice Hotels reported adjusted earnings of $1.03 per share, which beat the consensus mark of 93 cents by 10.8%. The bottom line improved 81% from the prior-year quarter’s figure of 50 cents.
In the quarter under review, total revenues were $257.7 million, which marginally missed the consensus mark of $258 million by 0.2%. However, the metric rose 41% from the year-ago quarter’s levels.
Franchising & Royalties
During the first quarter, domestic royalty fees totaled $87 million, up 38% compared with the same period of 2021. Domestic system-wide revenue per available room (RevPAR) increased 10.4% from the first-quarter 2019 levels. The uptick was driven by a 9.3% growth in average daily rate (ADR) and a 60 basis-point increase in occupancy levels.
In the first quarter, the company awarded 93 domestic franchise agreements, up 4% year over year. The company's extended-stay portfolio continues to expand its presence.
As of Mar 31, 2022, the number of domestic hotels and rooms declined 1.2% and 2.8% year over year, respectively.
Operating Results
Total operating expenses during first-quarter 2022 increased 14% year over year to $158.4 million. Adjusted EBITDA rose 53.2% from the prior-year quarter’s figure to $96.6 million.
Balance Sheet
As of Mar 31, 2022, Choice Hotels had cash and cash equivalents of $527.2 million compared with $511.6 million on Dec 31, 2021.
Long-term debt at the end of the first quarter was $844.4 million compared with $844.1 million reported in the fourth-quarter 2021-end. Goodwill, as a percentage of total assets, came in at 8.1% compared with 8.2% at the fourth-quarter 2021-end.
2022 Outlook
For 2022, the company expects to witness adjusted EBITDA and RevPAR growth compared to 2021. In 2022, the company expects RevPAR to increase in the range of 10% and 13% as compared to the full-year 2019.
Other Updates
Coming to the extended-stay portfolio, the company witnessed rapid expansion, thereby reaching 478 domestic hotels as of Mar 31, 2022. This highlighted an increase of 5.3% on a year-over-year basis. The domestic extended-stay pipeline comprised 350 hotels awaiting conversion, under construction or approved for development.
As of Mar 31, 2022, the company’s total domestic pipeline of hotels awaiting conversion, under construction or approved for development, reached 864 hotels, thereby reflecting nearly 78,000 rooms.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
Currently, Choice Hotels has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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 trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Choice Hotels has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Choice Hotels is part of the Zacks Hotels and Motels industry. Over the past month, Marriott Vacations Worldwide (VAC - Free Report) , a stock from the same industry, has gained 8.7%. The company reported its results for the quarter ended March 2022 more than a month ago.
Marriott reported revenues of $1.05 billion in the last reported quarter, representing a year-over-year change of +38.6%. EPS of $1.70 for the same period compares with -$0.49 a year ago.
For the current quarter, Marriott is expected to post earnings of $2.29 per share, indicating a change of +169.4% from the year-ago quarter. The Zacks Consensus Estimate has changed +0.6% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Marriott. Also, the stock has a VGM Score of B.