Wyndham Hotels & Resorts (WH) Valuation Revisited After New Analyst Coverage Flags Growth and RevPAR Challenges

Wyndham Hotels & Resorts (WH) is back in the spotlight after fresh Wall Street coverage highlighted its asset light model, while also noting growth pressures in lower tier brands and revenue per available room.

See our latest analysis for Wyndham Hotels & Resorts.

Despite the flurry of new coverage and expansion headlines, Wyndham’s latest share price of $73.89 sits well below where it started the year. The year to date share price return of negative 25.96 percent and a one year total shareholder return of negative 26.15 percent signal that momentum has clearly faded, even though the five year total shareholder return of 36.43 percent still points to longer term value creation.

If you are reassessing your travel and leisure exposure after Wyndham’s recent moves, it could be a good time to explore fast growing stocks with high insider ownership as potential new ideas.

With analysts split between highlighting Wyndham’s asset light strengths and warning about slower rooms growth and RevPAR pressure, are investors looking at a mispriced compounding franchise, or a stock where future gains are already baked in?

Most Popular Narrative Narrative: 30.2% Undervalued

Wyndham Hotels & Resorts last closed at $73.89, while the most widely followed narrative pegs fair value far higher, setting up a sharp valuation gap.

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%. Craziest thing is this keeps getting higher every year as they continue to lower their cost of revenue.

Read the complete narrative.

Curious how a fee based franchise, rising margins and aggressive room growth can justify such a big upside gap to today’s price? The full narrative unpacks the growth runway, loyalty economics and long term earnings power assumptions driving that bold fair value call.

Result: Fair Value of $105.80 (UNDERVALUED)

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

However, slower room growth, higher leverage, or a downturn hitting budget travel could pressure Wyndham’s fee streams and challenge that upbeat valuation story.

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

Build Your Own Wyndham Hotels & Resorts Narrative

If you see the story differently or would rather dig into the numbers yourself, you can build a personalized view in just minutes with 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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