Choice Hotels International

CHH

Travel Lodging · Consumer Cyclical

Price

$111.84

+0.55 (+0.49%)

Market Cap

$5.09B

Winston Score

Winston is serious

Mixed quality — meaningful strengths and weaknesses.

Share count falling — buybacks

−16.6% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 55.9M (2021) → 46.6M (2025)

Choice Hotels International owns and manages a large collection of hotel brands across different price ranges. Its brands include Comfort Inn, Quality Inn, Clarion, Cambria Hotels, and WoodSpring Suites, serving everyday travelers, families, and business guests. It is one of the largest hotel franchisors in the United States.

Choice Hotels makes most of its money by charging franchise fees to the independent hotel owners who operate under its brand names — it does not own most of the hotels itself. This "asset-light" model keeps costs low and helps explain its strong operating margin of around 27%. The company operates primarily in the United States but has a presence in over 40 countries, with roughly 7,000 properties in its system. Its large franchise network and recognizable brands create switching costs that make it hard for hotel owners to leave. The main risk is that economic downturns reduce travel spending, which directly cuts into the fees Choice Hotels collects from its franchisees.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+2.3% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

-53.7% YoY

YoY Growth Rate

Earnings declining

R&D Spend

$0/ year

0.0% of revenue

Below sector average (4%)

Research and development spending

Insider Activity

44.9%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Runway

~4 months

$44M cash & investments

Quarterly Free Cash Flow

↓ Burn rate worsening

Short runway — potential dilution ahead through share issuance

Cash watch

Choice Hotels International has less than a year of cash at its current burn rate. Growth investors should watch for potential share dilution from future fundraising — that directly reduces your ownership.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Gross Margin

35.7%

Modest — 35.7% gross margin

Operating Margin

17.6%

Healthy — 17.6% operating margin

ROCE

2.8%

Weak — 2.8% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+1.2%

Nearly flat sales (1.2% YoY)

EPS YoY

+12.8%

Earnings growing (12.8% YoY)

Healthy double-digit earnings growth — what compounders look like.

EPS Consistency

2/8 quarters

Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion

66%

Modest — 66% of profit becomes cash

FCF Margin

7.1%

Modest free cash flow (7.1%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity

14.58

Heavy debt load (14.58)

Interest Cover

4.61x

Adequate interest coverage (4.6x)

Interest coverage between 3 and 8. Profits cover interest several times over.

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Valuation

P/E Ratio (TTM)

15.0x

Attractive valuation — P/E 15.0

P/E in the normal range. Price is roughly $15 for every $1 of yearly profit.

P/E vs Forward

+0.8

GROWING

Earnings roughly flat

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Dividends

Dividend Yield

1.05%

Small dividend — 1.05% yield

Modest yield. The bulk of any return needs to come from price appreciation.

Dividend Growth

+0.0%

Dividend flat

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