Wyndham Hotels & Resorts (WH): Valuation in Focus as Renovated Danish Landmark Expands European Growth Strategy

Wyndham Hotels & Resorts (WH) has just debuted the redesigned Comwell Hvide Hus Aalborg, a 16-story landmark now operating under the Dolce by Wyndham brand in Denmark. This is not just any hotel update. It marks Wyndham’s fourth partnership with Comwell in Denmark and it arrives at a time when travelers are seeking authentic, experience-focused stays. From new signature dining concepts to flexible meeting spaces, the move aligns closely with current travel trends, and it shows that Wyndham is actively adapting as leisure and business travel evolve.

This expansion is part of a broader strategy for Wyndham Hotels & Resorts, as management emphasizes lifestyle-driven hospitality and pursues further growth in Europe. The company’s share price dipped 3% over the past month, but remains up 18% for the year. While recent performance has slowed compared to earlier in the year, the longer-term trend shows significant momentum, with a 41% return over three years and a strong 84% over five. In the past year, Wyndham has continued international growth alongside steady revenue and net income gains, and it has offered shareholder rewards like the recently affirmed dividend.

With Wyndham’s growth trajectory in Europe gaining momentum and the business posting consistent results, some investors may view the current dip as a potential opportunity. Others may believe the market has already priced in much of the upside.

Most Popular Narrative: 15.9% Undervalued

According to the narrative by Zwfis, Wyndham Hotels & Resorts is considered undervalued, trading at a discount to its fair value estimate set by the community. This view highlights the company’s robust global pipeline, loyalty program growth, and asset-light business model as major drivers behind the bullish outlook.

Final big thing I want to talk about before I break into some of my projections is how they have 120 million loyalty members, which continues to grow every year. This large number not only shows how strong a retention rate WH is able to hold, but it also demonstrates why their ancillary revenue has been increasing significantly. This revenue mainly comes from their co-branded credit card and their new co-branded debit card. By year-end, they plan to achieve growth in the low teens year over year, with a goal of raising that to the mid-to-high teens by the end of 2026. This is only a small part of their business, but if they are able to continue growing it, there is significant potential.

What is the driving force behind this intriguing valuation? It is a combination of ambitious loyalty program expansion, a global pipeline, and a unique asset-light model. Curious how these elements come together to support a compelling growth story and aggressive fair value? The full narrative unpacks the crucial underlying projections and bold figures. Take a closer look at Wyndham’s potential.

Result: Fair Value of $105.80 (UNDERVALUED)

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

However, rising debt levels and potential shifts in travel demand could challenge Wyndham’s growth outlook. These factors act as key risks for the bullish narrative.

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

Another View: SWS DCF Model Backs Up the Undervaluation

Taking a closer look with our DCF model reveals a remarkably similar result. According to this cash flow-based approach, Wyndham Hotels & Resorts is also trading below its estimated fair value. This may strengthen the investment case, or it might simply add another layer of debate.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Wyndham Hotels & Resorts for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Wyndham Hotels & Resorts Narrative

If you see things differently or want to explore Wyndham’s story your own way, it is easy to dive into the data and build a narrative in just a few minutes. So why not do it your way?

A great starting point for your Wyndham Hotels & Resorts research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

Looking for More Investment Ideas?

Serious about building a winning portfolio? Now is the perfect time to expand your horizons. Stay ahead of the crowd and seize opportunities you might be overlooking. Check out fresh stock ideas chosen by our analysts and never let a great investment slip by.

• Discover companies with an edge in artificial intelligence by exploring the latest picks for those shaping tomorrow's tech landscape through AI penny stocks.
• Find dividend-paying stocks with strong yields and uncover income opportunities in the market with our selection of dividend stocks with yields > 3%.
• Explore leading innovators in healthcare who are using AI to transform medical science with this tailored list of healthcare AI stocks.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com