Will Hilton Worldwide (HLT) Stock Be Hurt by Data Breach?
NEW YORK (TheStreet) -- HiltonWorldwideHoldings (HLT) - Get Report stock is down by 0.79% to $23.27 in after-hours trading on Tuesday, after the hotel and resort chain announced that it had been affected by a data breach.
Hilton has "identified and taken action" against malware that targeted payment card information, the company said in a statement today.
"Hilton Worldwide worked closely with third-party forensics experts, law enforcement and payment card companies on this investigation, and determined that specific payment card information was targeted by this malware," the statement said. "This information includes cardholder names, payment card numbers, security codes and expiration dates, but no addresses or personal identification numbers (PINs)."
The company advised customers to review and monitor their credit card statements if they stayed in a Hilton hotel between November 18, 2014 to December 5, 2014 as well as between April 21, 2015 and July 27, 2015.
Hilton operates the DoubleTree, Waldorf Astoria Hotel & Resorts, Embassy Suites Hotels, and Hampton Hotels brands.
Separately, TheStreet Ratings team rates HILTON WORLDWIDE HOLDINGS as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate HILTON WORLDWIDE HOLDINGS (HLT) 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, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- HLT's revenue growth has slightly outpaced the industry average of 1.3%. Since the same quarter one year prior, revenues slightly increased by 9.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- HILTON WORLDWIDE HOLDINGS has improved earnings per share by 47.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, HILTON WORLDWIDE HOLDINGS increased its bottom line by earning $0.68 versus $0.22 in the prior year. This year, the market expects an improvement in earnings ($0.82 versus $0.68).
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market on the basis of return on equity, HILTON WORLDWIDE HOLDINGS has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- Net operating cash flow has decreased to $343.00 million or 11.36% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- The debt-to-equity ratio is very high at 2.07 and currently higher than the industry average, implying increased risk associated with the management of debt levels within the company. Along with the unfavorable debt-to-equity ratio, HLT maintains a poor quick ratio of 0.77, which illustrates the inability to avoid short-term cash problems.
- You can view the full analysis from the report here: HLT
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.