NEW YORK (TheStreet) -- Hilton Worldwide (HLT) - Get Report shares are advancing by 0.55% to $26.65 on Tuesday, one day ahead of the hospitality company's fiscal 2015 second quarter earnings results due before the market opens tomorrow.
For the latest quarter, the company is expected to post earnings of 23 cents per share on revenue of $2.9 billion, according to analysts polled by Thomson Reuters.
In the same quarter the previous year, the company earned 21 cents per share on revenue of $2.67 billion.
Overall, Hilton's business trends are improving, and it is aggressively expanding in international high-growth markets like China, according to Zacks Equity Research.
Based in McLean, VA, Hilton Worldwide is a hospitality company that owns, leases, manages, develops, and franchises hotels, resorts, and timeshare properties worldwide.
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, notable return on equity and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 5.0%. Since the same quarter one year prior, revenues slightly increased by 10.0%. 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 25.0% 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 ($0.81 versus $0.68).
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
- The gross profit margin for HILTON WORLDWIDE HOLDINGS is rather low; currently it is at 24.89%. Regardless of HLT's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 5.77% trails the industry average.
- The debt-to-equity ratio is very high at 2.45 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 0.81, which illustrates the inability to avoid short-term cash problems.
- You can view the full analysis from the report here: HLT Ratings Report