China Lodging Group Limited Stock Downgraded (HTHT)

NEW YORK (TheStreet) -- China Lodging Group (Nasdaq:HTHT) has been downgraded by TheStreet Ratings from hold to sell. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, unimpressive growth in net income and poor profit margins.

Highlights from the ratings report include:

• Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 27.03%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 233.33% compared to the year-earlier quarter. Despite the heavy decline in its share price, this stock is still more expensive (when compared to its current earnings) than most other companies in its industry.
• The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Hotels, Restaurants & Leisure industry. The net income has significantly decreased by 216.8% when compared to the same quarter one year ago, falling from $1.82 million to -$2.13 million.
• The gross profit margin for CHINA LODGING GROUP LTD -ADR is currently lower than what is desirable, coming in at 27.20%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -3.30% is significantly below that of the industry average.
• CHINA LODGING GROUP LTD -ADR has exprienced a steep decline in earnings per share in the most recent quarter in comparison to its performance from the same quarter a year ago. This year, the market expects an improvement in earnings ($2.82 versus $0.52).
• When compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, CHINA LODGING GROUP LTD -ADR's return on equity is below that of both the industry average and the S&P 500.

China Lodging Group, Limited, together with its subsidiaries, develops, operates, and manages a chain of hotels in the People's Republic of China. The company has a P/E ratio of 28.6, above the average leisure industry P/E ratio of 17.3 and above the S&P 500 P/E ratio of 17.7. China Lodging Group has a market cap of $964.6 million and is part of the services sector and leisure industry. Shares are down 28.8% year to date as of the close of trading on Tuesday.

You can view the full China Lodging Group Ratings Report or get investment ideas from our investment research center.

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