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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Choice Hotels International, Inc. (XNYS:CHH) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
CHH
Name:
CHOICE HOTELS INTERNATIONAL, INC. (XNYS:CHH)
Sector:
35.91M
Industry:
Lodging
CEO:
Mr. Patrick Pacious
Total Employees:
1,500
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 63.56% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF CHOICE HOTELS INTERNATIONAL, INC.(CHH) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND LODGING INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
113.19
One Month Price Target:
$114.02
Six Month Price Target :
$118.2
Likely Price in One Year's Time:
Ticker:
$123.21
Likely Trading Range Today Under (Normal Volatility)
$112.77
Price Upper limit ($) :
$113.72
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$107.5
This week:
$100.46
This month :
$87.72
Other Primary facts
Market Cap:
6.00B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
55.78M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
18.33%
-17.%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$139.61
$127.48
$86.77
$98.90
Medium risk (<10%) entry points
Buy Call
Sell Call
$123.53
Buy Put:
Sell Put:
$120.94
$102.82
$105.44
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
CHH
Sharpe Ratio:
1.60%
Comparison:
CHH, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -7.77% lower than the industry
& is -29.92% lower than the market/S&P 500 average
Average Returns/Yield of
CHH
Daily returns:
0.05%
Weekly returns:
0.24%
Monthly returns:
0.97%
Yearly returns:
13.99%
Comparison of returns:
Average annual returns/yield (last 3 years) is -17.08% below industry average
Classification:
CHH, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.85
Statistical test of Returns:
CHH has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
2.47%
Weekly Volatility:
5.53%
Monthly Volatility:
11.06%
Yearly Volatility:
38.31%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.83%
Volatility in last five trading days has been -66.56% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-5.03%
Weekly VaR:
-11.25%
Monthly VaR:
-22.50%
How Much Can the price of
CHH
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-19%
Worst case (decline):
-77.94%
This translates to price declining to:
$91.30
This translates to price declining to:
$24.97
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
CHH is a 58.80% riskier investment compared to the market/S&P 500 & is 36.04% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -13.61% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
CHH
Beta in relation to market/S&P 500--1.32
Expected beta in 1 year's time:
0.896
Expected beta in 3 year's time:
1.267
Unlevered (debt free) Beta:
0.42
Beta in relation to Nasdaq (XNAS):
0.763
Beta in relation to all global stocks::
0.681
Beta Comparison & Analysis
Beta of competitors/peers::
1.397
Beta is -5.73% lower than peers
Average Industry Beta:
1.404
Beta is -6.22% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
244.52%
Sustainable growth rate is 118.90% above industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.006
Alpha is -146.32% below industry average alpha yield
Alpha is -36% below the market average
Analysis of Cost of Capital of
CHH
Equity cost of capital:
0.122
Equity cost of capital is -4.69% below industry mean WACC
Unlevered (without debt) cost of capital:
3.88%
Before-tax cost of debt:
4.24%
After-tax cost of debt:
3.35%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
3.35%
WACC is -11.31% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$20.51
Revenue growth rate per share of (3Y):
20.07
Annual revenue growth rate is -124.83% below industry average
EPS:
$5.94
Expected Annual growth rate of EPS (3Y):
8.79%
Expected future EPS growth rate is -4633.00% lower than the Lodging industry
Free cash flow (FCF) per share:
$6.29
Balance sheet equity growth per share: -47.61%
Equity growth rate per share is -40.59% lower than the industry
Debt per share
$15.72
EBITDA per share
$9.28
Valuation Analysis Today of
CHH
P/E Ratio:
17.97
P/E Ratio of Competitors/Peers:
11.54
P/E ratio is 55.63% higher than main peers & is -67.17% lower than the industry
Stock price/value with industry average P/E ratio: $325.02
CHH is -65.17% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $18.06
Present value of the expected future dividends only: $8.37
P/S (Price to Sales ratio):
5.52
Price to sales ratio is -2.69% below the industry mean
P/B (Price to book value ratio):
20.07
Price to free cash flow: 17.99
Price to free cash flow ratio is -88.50% lower than the industry
Net income growth rate (3Y):
36.12%
Net income growth rate is -252.78% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 3.95%
Dividend yeild: 0.83%
Previous Dividend: $0.24
Previous adjusted dividend: $0.24
Previous Dividend: $0.94
Expected next dividend best case: $0.24
Expected next dividend worst case: $0.23
Average dividend payment (long-term): $0.23
Average dividend increase/decrease (growth rate) % per period: 0.89%
Expected next dividend payment date: 10/12/2022
Expected next dividend record date: 29/09/2022
-
Previous dividend payment date: 14/07/2022
Previous dividend record date: 07/01/2022
-
Dividend History:
2022-06-30--$0.24
2022-01-03--$0.24
2021-06-30--$0.23
2022-03-31--$0.24
2021-09-30--$0.23
2020-04-01--$0.23
Dividend growth rate is -101.81% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
278.72%
Net debt to equity ratio:
179.97%
Debt to assets ratio:
44.47%
Net debt to assets ratio:
28.71%
Debt-to-asset ratio is -34.16% below industry average
Ability to repay debt:
Interest coverage ratio:
11.16
Interest coverage ratio is -730.74% less than industry average
Looking forward:
Debt growth rate:
3.61%
Annual debt growth is 496% higher than industry average debt growth rate
Debt repayment rate in last quarter: 0.00%
Analysis of Key Statistics
Correlation of price movement with the market:
0.652
Statistical significance of correlation:
CHH has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.611
Stock price is 6.75% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.611
Correlation of price movement with Nasdaq (^IXIC):
0.039
Covariance of price movement with the market:
0.056
Kurtosis
10.757
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
0.418
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
CHH
Gross Profit Margin Ratio:
228%
Operating Profit Margin Ratio:
42.33%
Operating profit margin is 754.43% higher than the industry
Net Profit Margin Ratio:
228%
Effective Tax Rate:
23.31%
Effective tax rate is -74.93% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
106.15%
Return on equity (ROE) is 46.21% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
16.94%
Return on assets (ROA) is 471.56% higher than the industry
Financial Leverage:
1.8x
Current Ratio:
1.4
Current ratio is -12.86% below industry average
Cash Conversion Cycle (days):
5.8
Cash conversion cycle is -85.65% below industry average
The remaining useful life of property plant & equipment is: 0.0 years
Stock based compensation to net income ratio:
2.26%
In-depth Efficiency Analysis
Revenue generated per employee:
762.7K
Each employee generates 209% more revenue than industry average revenue per employee
EBITDA generated per employee:
345.0K
Each employee generates 269% more EBITDA than industry average revenue per employee
Profit generated per employee:
222.7K
Each employee generates 296% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
23.9K
Each employee generates 155% more free cash flow than industry average revenue per employee
Assets/Capital per employee
789.3K
Each employee generates 155% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
CHH
TEMPUR SEALY INTERNATIONAL, INC. (XNYS:TPX)
RALPH LAUREN CORPORATION (XNYS:RL)
UNDER ARMOUR, INC. (XNYS:UA)
PENSKE AUTOMOTIVE GROUP, INC. (XNYS:PAG)
QUANTUMSCAPE CORPORATION (XNYS:QS)
WYNDHAM HOTELS & RESORTS, INC. (XNYS:WH)
APTARGROUP, INC. (XNYS:ATR)
LITHIA MOTORS, INC. (XNYS:LAD)
GILDAN ACTIVEWEAR INC. (XNYS:GIL)
Current Analyst Ratings
Strong buy�8%
Buy�0%
Hold�29%
Sell�8%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
1.14B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
489.18M
654.89M
-
-
145.68M
144.46M
24.64M
170.32M
4.98M
46.37M
35.58M
517.47M
484.33M
334.01M
435.52M
101.51M
334.01M
Statement of Cash Flow
Date:
Period:
17.17M
Differed Income Tax :
- 3119.00K
Stock Based Compensation :
7.56M
Change in Working Capital :
- 14747.00K
Accounts Receivables:
-
Other Working Capital:
-
Other Non-Cash Items:
- 10325.00K
Net Cash Provided by Operating Activities:
63.92M
Investments in PP&E:
- 26809.00K
Net Acquisitions:
- 268.00K
Purchases of Investments:
- 2818.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
527.21M
-
527.21M
234.01M
-
26.80M
788.02M
426.82M
159.20M
311.08M
62.30M
71.80M
152.82M
1.18B
-
1.97B
89.83M
216.49M
-
89.72M
167.48M
563.51M
876.98M
108.73M
1.09B
-
1.66B
951.00K
1.33B
- 4708.0K
-
March 31, 2022 at 6:00:00 AM
659.51M
314.65M
1.97B
-
1.09B
566.3M
1.85M
5.58M
- 22467.00K
-
-
- 14802.00K
- 13204.00K
2.21M
- 25795.00K
- 58.00K
15.60M
527.21M
511.61M
63.92M
- 28017.00K
35.91M
Our Proprietary Portfolio Rating
Our Rating:
A
Price Forecast/Expected Price in Next 5 Years of
CHH
2023
2024
2025
2026
2027
$124.68
$135.71
$147.73
$160.80
$175.03