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At US$65.86, Is Wyndham Hotels & Resorts, Inc. (NYSE:WH) Worth Looking At Closely?
While Wyndham Hotels & Resorts, Inc. (NYSE:WH) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the NYSE, rising to highs of US$80.87 and falling to the lows of US$64.65. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Wyndham Hotels & Resorts' current trading price of US$65.86 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Wyndham Hotels & Resorts’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for Wyndham Hotels & Resorts
Is Wyndham Hotels & Resorts Still Cheap?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 1.59% above my intrinsic value, which means if you buy Wyndham Hotels & Resorts today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $64.83, then there isn’t really any room for the share price grow beyond what it’s currently trading. Although, there may be an opportunity to buy in the future. This is because Wyndham Hotels & Resorts’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What does the future of Wyndham Hotels & Resorts look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 28% over the next couple of years, the future seems bright for Wyndham Hotels & Resorts. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What This Means For You
Are you a shareholder? WH’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on WH, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. To that end, you should learn about the 3 warning signs we've spotted with Wyndham Hotels & Resorts (including 1 which is concerning).
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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.
About NYSE:WH
Wyndham Hotels & Resorts
Operates as a hotel franchisor in the United States and internationally.
Fair value second-rate dividend payer.