Choice Hotels International, Inc. (CHH)

Over the past six months, Choice Hotels International, Inc. (CHH) stock price has been impacted by several events, generally reflecting a negative sentiment. In Q3 CY2025, sales were up 4.5% year-on-year, exceeding market revenue expectations, but non-GAAP profit was 4.4% below analysts' estimates, causing a stock drop. Several analysts adjusted their ratings and price targets for CHH. The stock experienced declines due to negative sentiment in the global travel and leisure sector, sporadic consumer demand, reports of discounted travel offers, and investor risk aversion. Insider sentiment for CHH is negative, driven by significant open-market selling from key executives.

The hospitality sector, in which Choice Hotels International operates, is inherently prone to seasonal shifts in travel demand. This seasonality can impact travel spending, and the company's investment needs can also be seasonal, leading to short-term swings in cash flow. Q1 FY 2025 was described as an "off-season" for Choice Hotels, resulting in negative free cash flow during that period. The company's profits can be affected by these seasonal travel demand swings, as well as broader events like pandemics and recessions.

Choice Hotels International, Inc. (CHH) is a multinational hospitality company headquartered in North Bethesda, Maryland, operating in the Consumer Discretionary sector and Lodging industry. The company focuses on hotel franchising, providing franchisees with reservation systems, marketing programs, and operational support. Its brand portfolio spans from economy to upscale and includes extended-stay options. The company also develops and sells cloud-based technology products to non-franchised hoteliers through choiceADVANTAGE.

Choice Hotels International has a global presence with properties in over 40 countries and territories. As of Q3 2023, it franchised nearly 7,500 hotels, representing approximately 630,000 rooms. Its operations extend across the United States, Canada, the Caribbean, Latin America, Europe, Asia-Pacific, and the Middle East.

In the past year, Choice Hotels International has demonstrated strong brand growth and positive operational achievements. In 2023, the company celebrated a year of accelerating growth, announcing higher-than-expected brand growth across its revenue-intense segments. Choice Hotels successfully integrated the Radisson Hotels Americas brands within a year of the transaction. The company also reported an industry-leading voluntary retention rate of 98% for its franchisees. New properties added to brands like Econo Lodge and Rodeway Inn in 2023 generated more revenue on average than properties that exited these brands.

Choice Hotels International, Inc. (CHH) has a mixed ownership structure. Institutional shareholders own approximately 67.30% to 67.43% of the company's stock. Insiders hold around 21.78% to 31.29%, and retail investors own approximately 1.40% to 11.75%. Major institutional owners include Bamco Inc /ny/, Morgan Stanley, Kayne Anderson Rudnick Investment Management LLC, Vanguard Group Inc, BlackRock, Inc., Boston Trust Walden Corp, and State Street Corp. The largest individual shareholder is Realty Investment Co Inc, owning 14.74% of the company's shares.