Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model
NEW YORK (
) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and growth in earnings per share. However, as a counter to these strengths, we find that we feel that the company's cash flow from its operations has been weak overall.
Highlights from the ratings report include:
- CHH's revenue growth has slightly outpaced the industry average of 0.8%. Since the same quarter one year prior, revenues slightly increased by 5.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- 45.00% 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 18.40% is above that of the industry average.
- 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. Despite the fact that it has already risen in the past year, there is currently no conclusive evidence that warrants the purchase or sale of this stock.
- Net operating cash flow has decreased to $33.39 million or 10.40% when compared to the same quarter last year. In conjunction, when comparing current results to the industry average, CHOICE HOTELS INTL INC has marginally lower results.
Choice Hotels International, Inc, together with its subsidiaries, operates as a hotel franchisor worldwide. The company has a P/E ratio of 15.7, equal to the average leisure industry P/E ratio and below the S&P 500 P/E ratio of 17.7. Choice Hotels International has a market cap of $1.84 billion and is part of the
industry. Shares are down 16.1% year to date as of the close of trading on Thursday.
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-- Written by a member of TheStreet Ratings Staff