Recent News
May 7, 2026 — Choice Hotels unveiled a suite of AI-powered solutions (including a 24/7 digital assistant named CHARLIE) aimed at helping franchise owners drive revenue and improve operating efficiency.
May 6, 2026 — The company opened its 70th annual convention and highlighted expanded extended-stay development and international net rooms growth.
May 20, 2026 — Choice Hotels announced President and CEO Patrick Pacious stepped down and will serve in an advisory capacity through August 31, 2026, under a transition agreement.
June 8, 2026 — The company promoted Tony Pallas to Chief Technology Officer as part of ongoing technology leadership changes.
Technical Analysis
Directional indicators show low trend strength: ADX at 14.54 signals no established directional trend, limiting conviction for sustained breakout or breakdown scenarios. The DI+ reading at 23.33 registered a peak-and-reverse, which represents a bearish shift in directional momentum; the DI- reading at 19.71 shows a dip-and-reversal, also aligning with bearish pressure from negative directional flow. Together, these directional moves increase the probability of short-term range-bound or lower-price bias relative to the current valuation.
MACD sits at 0.71, above its 0.35 signal line, which traditionally signals a bullish crossover; however, the MACD trend shows a recent peak-and-reversal, indicating developing bearish momentum despite the crossover. Traders should note the coexistence of a recent bullish crossover and a momentum peak when weighing short-horizon momentum exposure against the valuation backdrop.
MRO at -18.63 indicates the market price sits below the WMDST target, implying upward pressure toward fair-value alignment. The negative MRO therefore suggests mean-reversion potential into any corrective weakness, even as other oscillators show mixed signals.
RSI reads 51.87 and exhibits a peak-and-reverse, signaling neutral net momentum with recent weakening of bullish impulse. The 12-day EMA at 111.10 exceeds the current close of $109.88, and the 20-day moving average at $109.84 sits essentially at the current price, placing the share price near short-term technical equilibrium but below the short EMA—a modest bearish nuance versus the longer-term averages.
Price relation to broader trend: the close at $109.88 trades above the 200-day average of $103.36, which supports a constructive intermediate trend despite short-term momentum erosion. Ichimoku components cluster near $108.67–$110.38, creating a tight cloud that functions as immediate support/resistance; the price’s proximity to those levels suggests small intraday moves could flip bias. Bollinger bands place the close between the 1x lower ($105.96) and 1x upper ($113.72) bands, consistent with range-bound behavior. Volume metrics sit near multi-horizon averages, offering no strong conviction from liquidity shifts.
Fundamental Analysis
Reported operating and profitability metrics show mixed operating leverage alongside margin compression. EBIT equals $54,272,000 and EBITDA equals $76,208,000; operating margin at 17.697% and EBIT margin at 15.935% fall below the industry peer mean of 24.154% and the industry peer median of 22.748%, indicating lower operating profitability versus the peer central tendency while remaining above the peer low. QoQ and YoY EBITDA and margin changes show significant contraction: EBIT margin declined 38.617% QoQ and 34.521% YoY, reflecting sizable near-term margin pressure.
Top-line and cash-flow dynamics constrain valuation upside. Total revenue reads $340,575,000 with revenue growth of -12.707% and YoY revenue decline of -12.972%. Operating cash flow registered -$23,174,000 and free cash flow totaled -$50,058,000, producing a free cash flow yield of -1.01%. The company recorded net income of $20,304,000 and EPS actual $1.07 versus an estimate of $1.32, yielding an EPS surprise of -18.939% on the reported quarter; Choice filed first-quarter results on April 30, 2026.
Capital structure shows elevated leverage and constrained coverage. Total debt equals $2,109,620,000, net debt $1,959,364,000, and debt-to-assets at 71.644%. Interest coverage stands at 2.26x, and debt-to-EBITDA measures 27.68x, indicating limited buffer to absorb sustained cash-flow stress relative to operating earnings. Current ratio at 0.9465 and cash ratio at 0.1011 reflect modest near-term liquidity.
Valuation multiples appear rich relative to fundamentals. Trailing PE sits at 246.07x while forward PE at 52.82x, and price-to-sales at 14.55x with forward PS at 13.39x. WMDST values the stock as over-valued; the mean analyst price target at $95.10 sits below the current close of $109.88, reinforcing the WMDST valuation stance. Balance-sheet and earnings weakness, paired with elevated leverage and negative free cash flow, drive the over-valued assessment against operating fundamentals.
MOST-RECENT QUARTERLY REPORT
| REPORT PERIOD ENDING: | 2026-03-31 |
| REPORT DATE: | 2026-04-30 |
| NEXT REPORT DATE: | 2026-07-30 |
| CASH FLOW | Begin Period Cash Flow | $ 45.0 M |
| Operating Cash Flow | $ -23.17 M | |
| Capital Expenditures | $ -26.88 M | |
| Change In Working Capital | $ -56.30 M | |
| Dividends Paid | $ -13.12 M | |
| Cash Flow Delta | $ -1.12 M | |
| End Period Cash Flow | $ 43.9 M | |
| INCOME STATEMENT | REVENUE | |
| Total Revenue | $ 340.6 M | |
| Forward Revenue | $ 366.6 M | |
| COSTS | ||
| Cost Of Revenue | $ 185.4 M | |
| Depreciation | $ 21.9 M | |
| Depreciation and Amortization | $ 21.9 M | |
| Research and Development | — | |
| Total Operating Expenses | $ 280.3 M | |
| PROFITABILITY | ||
| Gross Profit | $ 155.1 M | |
| EBITDA | $ 76.2 M | |
| EBIT | $ 54.3 M | |
| Operating Income | $ 60.3 M | |
| Interest Income | $ 1.2 M | |
| Interest Expense | $ 24.0 M | |
| Net Interest Income | $ -22.75 M | |
| Income Before Tax | $ 30.3 M | |
| Tax Provision | $ 10.0 M | |
| Tax Rate | 33.0 % | |
| Net Income | $ 20.3 M | |
| Net Income From Continuing Operations | $ 20.3 M | |
| EARNINGS | ||
| EPS Estimate | $ 1.32 | |
| EPS Actual | $ 1.07 | |
| EPS Difference | $ -0.25 | |
| EPS Surprise | -18.939 % | |
| Forward EPS | $ 1.92 | |
| BALANCE SHEET | ASSETS | |
| Total Assets | $ 2.9 B | |
| Intangible Assets | $ 1.4 B | |
| Net Tangible Assets | $ -1.26 B | |
| Total Current Assets | $ 410.8 M | |
| Cash and Short-Term Investments | $ 43.9 M | |
| Cash | $ 43.9 M | |
| Net Receivables | $ 243.5 M | |
| Inventory | — | |
| Long-Term Investments | $ 121.8 M | |
| LIABILITIES | ||
| Accounts Payable | $ 146.2 M | |
| Short-Term Debt | — | |
| Total Current Liabilities | $ 434.0 M | |
| Net Debt | $ 2.0 B | |
| Total Debt | $ 2.1 B | |
| Total Liabilities | $ 2.8 B | |
| EQUITY | ||
| Total Equity | $ 137.4 M | |
| Retained Earnings | $ 2.3 B | |
| VALUATION & PER-SHARE METRICS | EQUITY & PER-SHARE METRICS | |
| Book Value Per-Share | $ 3.00 | |
| Shares Outstanding | 45.617 M | |
| Revenue Per-Share | $ 7.44 | |
| VALUATION | Market Capitalization | $ 5.0 B |
| Enterprise Value | $ 7.0 B | |
| Enterprise Multiple | 92.114 | |
| Enterprise Multiple QoQ | 69.253 % | |
| Enterprise Multiple YoY | 13.548 % | |
| Enterprise Multiple IPRWA | high: 205.993 CHH: 92.114 mean: 83.548 median: 78.132 low: -109.403 |
|
| EV/R | 20.612 | |
| CAPITAL STRUCTURE | ||
| Asset To Equity | 21.427 | |
| Asset To Liability | 1.049 | |
| Debt To Capital | 0.939 | |
| Debt To Assets | 0.716 | |
| Debt To Assets QoQ | 3.375 % | |
| Debt To Assets YoY | -7.064 % | |
| Debt To Assets IPRWA | high: 1.622 CHH: 0.716 mean: 0.664 median: 0.625 low: 0.003 |
|
| Debt To Equity | 15.351 | |
| Debt To Equity QoQ | 37.557 % | |
| Debt To Equity YoY | -149.391 % | |
| Debt To Equity IPRWA | CHH: 15.351 high: 12.878 mean: 0.38 median: 0.371 low: -7.932 |
|
| PRICE-BASED VALUATION | ||
| Price To Book (P/B) | 36.049 | |
| Price To Book QoQ | 37.994 % | |
| Price To Book YoY | -137.561 % | |
| Price To Book IPRWA | CHH: 36.049 high: 18.76 median: 10.414 mean: 6.202 low: -12.586 |
|
| Price To Earnings (P/E) | 246.067 | |
| Price To Earnings QoQ | 227.518 % | |
| Price To Earnings YoY | 150.352 % | |
| Price To Earnings IPRWA | high: 285.278 CHH: 246.067 median: 108.358 mean: 93.497 low: -170.635 |
|
| PE/G Ratio | -3.394 | |
| Price To Sales (P/S) | 14.546 | |
| Price To Sales QoQ | 19.874 % | |
| Price To Sales YoY | -21.092 % | |
| Price To Sales IPRWA | high: 33.432 median: 25.858 mean: 22.416 CHH: 14.546 low: 0.178 |
|
| FORWARD MULTIPLES | ||
| Forward P/E | 52.822 | |
| Forward PE/G | -0.729 | |
| Forward P/S | 13.386 | |
| EFFICIENCY | OPERATIONAL | |
| Operating Leverage | 3.653 | |
| ASSET & SALES | ||
| Asset Turnover Ratio | 0.116 | |
| Asset Turnover Ratio QoQ | -13.26 % | |
| Asset Turnover Ratio YoY | -10.857 % | |
| Asset Turnover Ratio IPRWA | high: 0.683 mean: 0.178 CHH: 0.116 median: 0.109 low: 0.078 |
|
| Receivables Turnover | 1.51 | |
| Receivables Turnover Ratio QoQ | -14.064 % | |
| Receivables Turnover Ratio YoY | -15.846 % | |
| Receivables Turnover Ratio IPRWA | high: 51.203 mean: 7.593 median: 2.661 CHH: 1.51 low: 1.107 |
|
| Inventory Turnover | — | |
| Inventory Turnover Ratio QoQ | — | |
| Inventory Turnover Ratio YoY | — | |
| Inventory Turnover Ratio IPRWA | — | |
| Days Sales Outstanding (DSO) | 60.418 | |
| CASH CYCLE | ||
| Cash Conversion Cycle Days (CCC) | -14.864 | |
| Cash Conversion Cycle Days QoQ | -8.063 % | |
| Cash Conversion Cycle Days YoY | 120.346 % | |
| Cash Conversion Cycle Days IPRWA | high: 38.929 median: -2.211 mean: -5.552 CHH: -14.864 low: -124.383 |
|
| CAPITAL DEPLOYMENT | ||
| Cash Conversion Ratio | -14.671 | |
| CapEx To Revenue | -0.079 | |
| CapEx To Depreciation | -1.226 | |
| CAPITAL, LIQUIDITY & COVERAGE | CAPITAL STRUCTURE | |
| Total Capital | $ 2.1 B | |
| Net Invested Capital | $ 2.1 B | |
| Invested Capital | $ 2.1 B | |
| Net Tangible Assets | $ -1.26 B | |
| Net Working Capital | $ -23.21 M | |
| LIQUIDITY | ||
| Cash Ratio | 0.101 | |
| Current Ratio | 0.947 | |
| Current Ratio QoQ | 8.941 % | |
| Current Ratio YoY | 12.941 % | |
| Current Ratio IPRWA | high: 2.493 mean: 0.966 CHH: 0.947 median: 0.933 low: 0.26 |
|
| Quick Ratio | — | |
| Quick Ratio QoQ | — | |
| Quick Ratio YoY | — | |
| Quick Ratio IPRWA | — | |
| COVERAGE & LEVERAGE | ||
| Debt To EBITDA | 27.682 | |
| Cost Of Debt | 0.777 % | |
| Interest Coverage Ratio | 2.265 | |
| Interest Coverage Ratio QoQ | -47.046 % | |
| Interest Coverage Ratio YoY | -40.606 % | |
| Interest Coverage Ratio IPRWA | high: 21.267 mean: 8.829 median: 7.355 CHH: 2.265 low: -13.758 |
|
| Operating Cash Flow Ratio | -0.009 | |
| TIMING / LIQUIDITY | ||
| Days Payables Outstanding (DPO) | 75.282 | |
| DIVIDENDS | ||
| Dividend Coverage Ratio | 1.548 | |
| Dividend Payout Ratio | 0.646 | |
| Dividend Rate | $ 0.29 | |
| Dividend Yield | 0.003 | |
| PERFORMANCE | GROWTH | |
| Asset Growth Rate | 0.904 % | |
| Revenue Growth | -12.707 % | |
| Revenue Growth QoQ | -0.602 % | |
| Revenue Growth YoY | -12.972 % | |
| Revenue Growth IPRWA | high: 34.416 % mean: -4.62 % median: -7.006 % CHH: -12.707 % low: -26.819 % |
|
| Earnings Growth | -72.5 % | |
| Earnings Growth QoQ | 108.561 % | |
| Earnings Growth YoY | 435.134 % | |
| Earnings Growth IPRWA | high: 233.333 % median: -9.295 % mean: -9.678 % CHH: -72.5 % low: -200.0 % |
|
| MARGINS | ||
| Gross Margin | 45.551 % | |
| Gross Margin QoQ | -14.079 % | |
| Gross Margin YoY | -9.743 % | |
| Gross Margin IPRWA | high: 78.305 % CHH: 45.551 % mean: 41.803 % median: 39.043 % low: -0.222 % |
|
| EBIT Margin | 15.935 % | |
| EBIT Margin QoQ | -38.617 % | |
| EBIT Margin YoY | -34.521 % | |
| EBIT Margin IPRWA | high: 45.143 % mean: 24.154 % median: 22.748 % CHH: 15.935 % low: -24.703 % |
|
| Return On Sales (ROS) | 17.697 % | |
| Return On Sales QoQ | -33.749 % | |
| Return On Sales YoY | -27.281 % | |
| Return On Sales IPRWA | high: 44.253 % mean: 24.148 % median: 23.583 % CHH: 17.697 % low: -45.058 % |
|
| CASH FLOW | ||
| Free Cash Flow (FCF) | $ -50.06 M | |
| Free Cash Flow Yield | -1.01 % | |
| Free Cash Flow Yield QoQ | -191.735 % | |
| Free Cash Flow Yield YoY | 142.788 % | |
| Free Cash Flow Yield IPRWA | high: 5.154 % mean: 0.972 % median: 0.794 % CHH: -1.01 % low: -7.886 % |
|
| Free Cash Growth | -196.027 % | |
| Free Cash Growth QoQ | -779.847 % | |
| Free Cash Growth YoY | 33.089 % | |
| Free Cash Growth IPRWA | high: 371.18 % mean: 30.452 % median: 5.617 % CHH: -196.027 % low: -450.0 % |
|
| Free Cash To Net Income | -2.465 | |
| Cash Flow Margin | -1.134 % | |
| Cash Flow To Earnings | -0.19 | |
| VALUE & RETURNS | ||
| Economic Value Added | $ 0.03 | |
| Return On Assets (ROA) | 0.693 % | |
| Return On Assets QoQ | -68.298 % | |
| Return On Assets YoY | -60.264 % | |
| Return On Assets IPRWA | high: 7.852 % mean: 2.479 % median: 2.339 % CHH: 0.693 % low: -1.371 % |
|
| Return On Capital Employed (ROCE) | 2.162 % | |
| Return On Equity (ROE) | 0.148 | |
| Return On Equity QoQ | -57.956 % | |
| Return On Equity YoY | -121.21 % | |
| Return On Equity IPRWA | high: 0.315 CHH: 0.148 median: 0.021 mean: 0.011 low: -0.198 |
|
| DuPont ROE | 12.744 % | |
| Return On Invested Capital (ROIC) | 1.698 % | |
| Return On Invested Capital QoQ | -57.358 % | |
| Return On Invested Capital YoY | -49.055 % | |
| Return On Invested Capital IPRWA | high: 18.09 % mean: 6.299 % median: 5.912 % CHH: 1.698 % low: -2.438 % |
|