A Look at Wyndham Hotels & Resorts’s Valuation After Loyalty Program Launch and Downward 2025 Earnings Guidance

Wyndham Hotels & Resorts (NYSE:WH) has unveiled its new paid loyalty program, Wyndham Rewards Insider, aiming to deepen guest engagement through extra perks and points. This comes just as the company posted steady third-quarter profits while adjusting its 2025 earnings outlook lower.

See our latest analysis for Wyndham Hotels & Resorts.

This refreshed loyalty push from Wyndham arrives amid a challenging stretch for the stock, with a 26% year-to-date share price drop and recent news of softer earnings guidance weighing on sentiment. Still, the company’s long-term track record shows resilience, as evidenced by a total shareholder return of 54% over five years. However, near-term momentum is fading.

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With the stock trading at a notable discount to analyst price targets despite ongoing operational shifts and fresh loyalty perks, the question becomes clear: is Wyndham undervalued at these levels, or is the market already factoring in its future growth prospects?

Most Popular Narrative: 30.6% Undervalued

According to the current most popular narrative from Zwfis, Wyndham's fair value is estimated substantially above its last closing price of $73.43. This suggests a major disconnect between the market price and the growth scenario envisioned by this valuation approach.

*Their biggest sources come from royalties and franchise fees, marketing/reservation and loyalty, management fees, license fees, and then other fees (ancillary). Because of their asset-light model, they are able to operate at a very high operating leverage with their FY 2024 Adjusted EBITDA Margin at 83%. One of the most notable aspects is that this margin continues to rise each year as they keep lowering their cost of revenue.*

Read the complete narrative.

Want to know what fuels this bullish outlook? The narrative’s math depends on relentless hotel expansion, thriving loyalty membership, and sky-high profit margins. Which piece truly moves the needle in their valuation? The full breakdown reveals which projections will shock you most.

Result: Fair Value of $105.80 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, risks remain, such as economic slowdowns impacting travel demand or franchise expansion missing targets. Either of these factors could challenge the bullish outlook.

Find out about the key risks to this Wyndham Hotels & Resorts narrative.

Build Your Own Wyndham Hotels & Resorts Narrative

If the narrative above doesn’t fit your perspective, dive into the data and build a version that matches your outlook in just a few minutes. Do it your way

A great starting point for your Wyndham Hotels & Resorts research is our analysis highlighting 5 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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