CHHChoice Hotels International, Inc.
Is the business good?
More warning than reassurance: thin cash backing (0.7×), margins compressing, and returns that lean on debt.
Operating profit outpaces operating cash flow, watch accruals and working capital. Conversion is worsening vs a year ago.
Operating profit is falling even as sales grow, costs are outrunning the top line.
Leverage-amplified, a high assets-to-equity ratio does much of the work. ROE 235% = margin × turnover × leverage.
Unless marked, from derived.
Against the whole market›
Percentile against every name Ryufin tracks. Higher is better; the tick marks the middle of the market. Context, not one of the checks above.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is CHH?
Choice Hotels International, Inc. earns 15% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 6.3 points above what the capital costs: growth creates value
- Operating margin
- 25%
Operating margin · Lodging median 23% · 12 months to Q2 2026
- Cash conversion
- 0.67×
Cash conversion · 0.90× a year ago · the operating profit has not turned into cash yet
- Share count, year on year
- −2.6%
Share count, year on year · bought back, each share owns more of the company
| Year | Operating margin |
|---|---|
| FY2020 | 16% |
| FY2021 | 40% |
| FY2022 | 34% |
| FY2023 | 24% |
| FY2024 | 29% |
| FY2025 | 28% |
Details›
- Operating margin12 months to Q2 2026
- 25%
- Net margin12 months to Q2 2026
- 20%
- Free cash flow margin
- 9.5%
- Revenue, trailing twelve months
- $1.62B
- Free cash flow, trailing twelve months
- $153M
- Net income, trailing twelve months
- $328M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 15%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.