NEW YORK (TheStreet) -- Hilton Worldwide Holdings (HLT) - Get Report shares are advancing by 0.86% to $25.22 on Tuesday afternoon, one day ahead of the company's fourth quarter fiscal 2015 earnings results, due out before the open on Wednesday.
Both profits and revenue are projected to grow year-over-year.
For the latest quarter, analysts are expecting the hotels and resorts operator to post earnings of 23 cents a share on revenue of $2.87 billion.
In the same period the year before, the company earned 18 cents a share on revenue of $2.64 billion.
Top line drivers for the recent quarter include domestic geographic exposure and group business trends getting better, according to Zacks Equity Research.
However, given that the company has a strong international presence, currency fluctuations can be a headwind.
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, increase in stock price during the past year and notable return on equity. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, generally higher debt management risk and poor profit margins.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- HLT's revenue growth has slightly outpaced the industry average of 0.5%. Since the same quarter one year prior, revenues slightly increased by 9.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- HILTON WORLDWIDE HOLDINGS's earnings per share declined by 23.8% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. 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. When compared to other companies in the Hotels, Restaurants & Leisure industry and the overall market, HILTON WORLDWIDE HOLDINGS's return on equity is below that of both the industry average and the S&P 500.
- The company, on the basis of change in net income from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and greatly underperformed compared to the Hotels, Restaurants & Leisure industry average. The net income has decreased by 23.0% when compared to the same quarter one year ago, dropping from $209.00 million to $161.00 million.
- The debt-to-equity ratio is very high at 2.19 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