| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 60 | 13.6x | 17.8x | Around median | |
Growth | 18 | 2.6% | 7.1% | Bottom tier | |
Quality | 53 | 15.6% | 4.5% | Around median | |
Safety | 41 | 4.4x | 2.6x | Around median | |
Capital Return | 36 | 1.19% | 2.12% | Bottom tier | |
Momentum | 40 | -9.0% | 2.9% | Bottom tier | |
Sentiment | 46 | 10 | 3 | Around median |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Choice Hotels International operates an asset-light hotel franchise model, generating revenue primarily from royalties, franchise fees, and services provided to hotel owners, alongside partnership and procurement fees. Its growth formula relies on increasing room count, raising revenue per available room, improving the average royalty rate, and expanding non-room-related services; partnership and services fees reached $28.7 million in fiscal Q2 2026, up 6%. Its operating drivers include brands such as Comfort, Country Inn & Suites by Radisson, Cambria, and Everhome, while extended-stay hotels represented more than 40% of the U.S. room development pipeline.
In fiscal Q2 2026, the company reported EDGAR-listed revenue of $440.8 million, net income of $64.3 million, and earnings per share of $1.41; this equates to a calculated net income margin of approximately 14.6%. On the company's operating basis excluding reimbursable revenue from franchised and managed properties, revenue rose 7% to $277 million, adjusted earnings before interest, taxes, depreciation, and amortization increased 6% to approximately $175 million, and adjusted earnings per share rose 5% to $2.02.
Earnings growth came from improved U.S. royalties, higher revenue per available room, royalty-rate expansion, growth in franchisee programs and services and partnership revenue, as well as the impact of the transition to direct franchising in Canada. Global room count increased 2.6%, and revenue per available room grew 1.3% in the United States and 1.7% globally on a currency-neutral basis, while the average U.S. royalty rate increased 11 basis points. Conversely, adjusted selling, general, and administrative expenses rose 7%, partially offsetting the impact of revenue and royalty growth.
Automated analysis for informational purposes only — not investment advice.
The average analyst price target is $109.38, compared with a wide range of $86 to $128 and a consensus rating of “Neutral,” reflecting notable divergence in estimates of the impact of improving rooms and royalties versus weak cash flow and expense pressures. The average target is below the 52-week range high of $123.82, while the highest target is slightly above that high and the lowest target is close to the low of $84.04; no valid price-to-earnings multiple is available within the provided data to support an additional reliable comparison.
Figures in the text are as of 2026-09-02; the live price is shown at the top of the page.
Choice Hotels reported EDGAR-listed revenue of $440.8 million, net income of $64.3 million, and earnings per share of $1.41. On an operating basis excluding reimbursable revenue, revenue rose 7% to $277 million. Adjusted earnings before interest, taxes, depreciation, and amortization increased 6% to approximately $175 million, driven by higher U.S. royalties and partnership fees and the benefit from direct franchising in Canada.
The company raised its adjusted earnings before interest, taxes, depreciation, and amortization guidance to $635–650 million for fiscal 2026. It also raised its U.S. revenue per available room growth outlook to a range of 0%–1.25% and global growth to 0%–1%. Expected adjusted earnings per share are now $6.86–7.10, with pressure from higher interest expense and a higher effective tax rate.
Choice Hotels expects conversions to represent approximately 90% of U.S. openings in fiscal 2026, compared with a historical percentage in the mid-60s. U.S. conversion franchise agreements increased 82% in fiscal Q2 2026, and the conversion pipeline grew 24% year over year. The average time between signing and opening also shortened by approximately one month, and the company expects to open nearly 75% of the agreements signed since the beginning of fiscal 2026 within the same year.
The EasyBid platform improved the conversion rate for group requests for proposals by 360 basis points and contributed to a 16% increase in group revenue in fiscal Q2 2026. The Charlie tool within the property management system reduced operational support requests by approximately 40% in an initial trial. In the Choice Privileges program, membership grew 7% to 77 million, and loyalty contribution increased by more than 250 basis points during the quarter.
Capital expenditures for hotel development declined 80% in the first half of fiscal 2026, and the company expects a decline of approximately 70% for the full fiscal 2026. The company owns 19 fully operational hotels and one hotel under construction, with no additional wholly owned hotels in the development pipeline. The book value of programs associated with owned hotels, joint ventures, and lending is approximately $650 million, including nearly $450 million in owned hotels, with the first disposition expected in the first half of 2027, subject to market conditions.
Operating cash flow declined to $67 million in the first six months of fiscal 2026 from $116 million in the comparable period, alongside increased franchise agreement costs and reimbursable investments. Adjusted selling, general, and administrative expenses also rose 7% in Q2, while U.S. revenue per available room growth remained at 1.3%, with a gap versus the hotel segment mix index. The reliance on conversions for approximately 90% of U.S. openings in fiscal 2026 also adds sensitivity to the pace of completing agreements and opening hotels.
