Fact based stock research
Choice (NYSE:CHH)

US1699051066

How to read the free ranks

For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Choice stock research in summary

choicehotels.comen-in

ANALYSIS: With an Obermatt Combined Rank of 69 (better than 69% compared with investment alternatives), Choice (Hotels, Resorts & Cruise Lines, USA) shares have above-average financial characteristics compared with similar stocks. Shares of Choice are a good value (attractively priced) with a consolidated Value Rank of 55 (better than 55% of alternatives), are safely financed (Safety Rank of 78, which means low debt burdens), but show below-average growth (Growth Rank of 45). ...read more

RECOMMENDATION: A Combined Rank of 69, is a buy recommendation based on Choice's financial characteristics. As the company Choice's key financial metrics exhibit good value (Obermatt Value Rank of 55) but low growth (Obermatt Growth Rank of 45) while being safely financed (Obermatt Safety Rank of 78), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 55% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	55
Growth Rank	45
Safety Rank	78
Combined Rank	69

Country	USA
Industry	Hotels, Resorts & Cruise Lines
Index	Diversity USA, S&P MIDCAP
Size class	Large

14-Nov-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Choice

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	13	15	18	55
GROWTH
GROWTH	78	69	21	45
SAFETY
SAFETY	89	60	87	78
SENTIMENT
SENTIMENT	n/a	65	70	^new
360° VIEW
360° VIEW	n/a	55	44	^new

Most recent update of the stock research: 14-Nov-2024. Financial reporting date used for calculating ranks: 30-Jun-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Choice is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	13	15	18	55
GROWTH
GROWTH	78	69	21	45
SAFETY
SAFETY	89	60	87	78
COMBINED
COMBINED	63	39	39	69

Last update of combined financial performance: 14-Nov-2024. Stock analysis on combined financial performance: The higher the rank of Choice the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 55 (better than 55% compared with alternatives), Choice shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators where three out of four are below average for Choice. Only the Price-to-Book Capital ratio (also referred to as market-to-book ratio) indicates good stock value with a Price-to-Book Rank of 100, which means that the stock price is lower compared with invested capital than for 100% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 43 which means the stock price compared with what market professionals expect for future profits is higher than 57% of comparable companies, indicating a low value concerning Choice's revenue levels. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Book Rank of 100 and for the dividend yields rank which is lower than for 66% of comparable companies, making the stock more expensive as regards to with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 55, is a buy recommendation based on Choice's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for Choice, where three out of four value indicators are below par? One reason could be that the company is well financed, indicated by the high book capital level, and has a promising future that is not yet visible in reported revenues and profits. That would also explain the low dividend yield because the company needs the cash to invest in its future. If investors can verify a picture in this sense, the stock may still be a good investment, even though current company-reported financials don't fully explain current stock prices. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	50	31	44	43
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	22	32	48	34
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	2	3	3	100
DIVIDEND YIELD
DIVIDEND YIELD	14	35	40	34
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	13	15	18	55

Last update of Value Rank: 14-Nov-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Choice; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 45 (better than 45% compared with alternatives), Choice shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Choice. Capital Growth has a rank of 80, which means that currently professionals expect the company to grow its invested capital more than 42% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 57 (above 57% of alternative investments). But Sales Growth has only a rank of 30, which means that, currently, professionals expect the company to grow less than 70% of its competitors, and Profit Growth is also low at a rank of 42. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 45, is a hold recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Choice, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	56	33	34	30
PROFIT GROWTH
PROFIT GROWTH	57	57	44	42
CAPITAL GROWTH
CAPITAL GROWTH	n/a	65	44	80
STOCK RETURNS
STOCK RETURNS	74	81	21	57
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	78	69	21	45

Last update of Growth Rank: 14-Nov-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Choice.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 78 (better than 78% compared with alternatives) for 2024, the company Choice has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Choice is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Choice. Refinancing is at 62, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 62% of its competitors. Liquidity is also good at 92, meaning the company generates more profit to service its debt than 92% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 18, which means the company has an above-average debt-to-equity ratio. It has more debt than 82% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 78 (better than 78% compared with alternatives), Choice has a financing structure that is significantly safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Choice could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with Choice and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	78	8	18	18
REFINANCING
REFINANCING	54	59	70	62
LIQUIDITY
LIQUIDITY	90	76	92	92
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	89	60	87	78

Last update of Safety Rank: 14-Nov-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Choice and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	14	12	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	37	59	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	73	94	^new
MARKET PULSE
MARKET PULSE	n/a	94	89	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	65	70	^new

Last update of Sentiment Rank: 14-Nov-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Choice.
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