NEW YORK (TheStreet) -- Choice Hotels Intl (CHH - Get Report) shares are down -1.5% to $44 on Monday following the release of the company's first quarter earnings report.
Year over year quarterly revenue rose 7.6% to 147.3 million, beating analysts estimates of $143.6 million.
The company reported diluted earnings per share of 29 cents, increasing 23% over the same period last year and matching analysts estimates for the quarter.
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TheStreet Ratings team rates CHOICE HOTELS INTL INC as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate CHOICE HOTELS INTL INC (CHH) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- CHH's revenue growth has slightly outpaced the industry average of 4.8%. Since the same quarter one year prior, revenues slightly increased by 1.3%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- 43.74% is the gross profit margin for CHOICE HOTELS INTL INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 15.12% is above that of the industry average.
- CHOICE HOTELS INTL INC has improved earnings per share by 9.5% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. We feel it is likely to report a decline in earnings in the coming year. During the past fiscal year, CHOICE HOTELS INTL INC reported lower earnings of $1.90 versus $2.07 in the prior year. This year, the market expects earnings to be in line with last year ($1.90 versus $1.90).
- In its most recent trading session, CHH has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- You can view the full analysis from the report here: CHH Ratings Report