📊 CHH Key Takeaways
Investment Thesis
Choice Hotels demonstrates strong fundamental profitability with a 23.2% net margin and exceptional returns on equity (204.1%), supported by robust free cash flow generation ($249.4M). However, the extremely high debt-to-equity ratio (10.52x) and weak current ratio (0.87x) present significant financial risks that constrain the rating despite solid operational performance.
CHH Strengths
- Exceptional net profit margin of 23.2% indicates strong operational efficiency and pricing power
- Robust free cash flow generation of $249.4M with 15.6% FCF margin demonstrates cash-generative business model
- Strong interest coverage ratio of 22.2x shows current ability to service debt obligations
- High ROE of 204.1% reflects efficient use of equity capital despite leverage
- Modest revenue growth of 0.8% YoY shows stable market position in mature hospitality sector
CHH Risks
- Critically high debt-to-equity ratio of 10.52x with $1.9B long-term debt against only $181.2M equity creates significant financial distress risk
- Liquidity concern: current ratio of 0.87x below 1.0x indicates potential short-term obligations coverage issues despite positive FCF
- Minimal cash position of $45.0M relative to $2.7B total liabilities suggests limited financial flexibility for adverse scenarios
- Modest net income growth of only 0.5% YoY coupled with revenue growth of 0.8% indicates slowing top-line momentum
- High proportion of liabilities (93% of assets) creates vulnerability to operational disruptions or interest rate increases
Key Metrics to Watch
- Debt-to-equity ratio trend and refinancing capacity for maturing obligations
- Free cash flow sustainability and ability to reduce leverage
- Revenue growth acceleration and margins stability in competitive hotel market
- Operating cash flow consistency and working capital management
- Interest coverage ratio maintenance as debt service obligations come due
CHH Financial Metrics
💡 AI Analyst Insight
The current ratio below 1.0x warrants monitoring of short-term liquidity.
CHH Profitability Ratios
CHH vs Default Sector
How CHOICE HOTELS INTERNATIONAL INC /DE compares to Default sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
CHH Balance Sheet & Liquidity
CHH 5-Year Financial Trend
5-Year Trend Summary: CHOICE HOTELS INTERNATIONAL INC /DE's revenue has grown significantly by 39% over the 5-year period, indicating strong business expansion. The most recent EPS of $5.07 reflects profitable operations.
CHH Growth Metrics (YoY)
CHH Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2024 | $425.6M | $31.0M | $1.81 |
| Q2 2024 | $427.4M | $31.0M | $1.65 |
| Q1 2024 | $331.9M | $31.0M | $0.62 |
| Q3 2023 | $414.3M | $52.8M | $1.81 |
| Q2 2023 | $368.0M | $52.8M | $1.65 |
| Q1 2023 | $257.7M | $52.8M | $1.02 |
| Q3 2022 | $323.3M | $22.3M | $1.85 |
| Q2 2022 | $278.2M | $22.3M | $1.53 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
CHH Capital Allocation
CHH SEC Filings
Access official SEC EDGAR filings for CHOICE HOTELS INTERNATIONAL INC /DE (CIK: 0001046311)
📋 Recent SEC Filings
❓ Frequently Asked Questions about CHH
What is the AI rating for CHH?
CHOICE HOTELS INTERNATIONAL INC /DE (CHH) has an AI rating of BUY with 72% confidence, based on fundamental analysis of SEC EDGAR filings.
What are CHH's key strengths?
Exceptional net profit margin of 23.2% indicates strong operational efficiency and pricing power. Robust free cash flow generation of $249.4M with 15.6% FCF margin demonstrates cash-generative business model.
What are the risks of investing in CHH?
Critically high debt-to-equity ratio of 10.52x with $1.9B long-term debt against only $181.2M equity creates significant financial distress risk. Liquidity concern: current ratio of 0.87x below 1.0x indicates potential short-term obligations coverage issues despite positive FCF.
What is CHH's revenue and growth?
CHOICE HOTELS INTERNATIONAL INC /DE reported revenue of $1.6B.
Does CHH pay dividends?
CHOICE HOTELS INTERNATIONAL INC /DE pays dividends, with $53.5M distributed to shareholders in the trailing twelve months.
Where can I find CHH SEC filings?
Official SEC filings for CHOICE HOTELS INTERNATIONAL INC /DE (CIK: 0001046311) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is CHH's EPS?
CHOICE HOTELS INTERNATIONAL INC /DE has a diluted EPS of $7.90.
How is the AI analysis conducted?
Our AI (Claude) analyzes publicly available SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports to evaluate financial health, profitability ratios, balance sheet strength, and growth metrics.