Choice Hotels(US:CHH) ZACKS·2024-12-04 17:36Core Viewpoint - Choice Hotels reported mixed Q3 2024 results, with earnings exceeding estimates while revenues fell short, but both metrics showed year-over-year growth [2][6]. Financial Performance - Adjusted EPS for Q3 was $2.23, surpassing the Zacks Consensus Estimate of $1.91 by 16.8%, compared to $1.82 in the prior-year quarter [6]. - Quarterly revenues reached $428 million, missing the consensus mark of $436.4 million by 1.9%, but grew 1% from $425.6 million year-over-year [6]. - Total operating expenses decreased by 5% year-over-year to $276.2 million, lower than the estimated $290.9 million [9]. - Adjusted EBITDA was $177.6 million, reflecting a 14% year-over-year increase, exceeding the expected $174.9 million [10]. Business Strategy and Growth - The company's growth strategy was effectively executed, leading to accelerated unit growth and an expanded global pipeline [3]. - Choice Hotels raised its guidance for adjusted net income, adjusted EPS, and revenue per available room (RevPAR) for 2024 due to solid performance [4][12]. - The adjusted net income is now anticipated to be between $323 million and $331 million, up from the previous estimate of $309.5 million to $321 million [12]. - Adjusted EPS is expected to range from $6.70 to $6.87, an increase from the prior projection of $6.40 to $6.65 [13]. Market Position and Outlook - The company is well-positioned to deliver bottom-line growth and maintain shareholder value, supported by its business strategies amid improving demand [5]. - Estimates for Choice Hotels have trended upward, with a consensus estimate shift of 10.98% over the past month [14][15]. - The stock has a Zacks Rank 1 (Strong Buy), indicating expectations for above-average returns in the coming months [17]. Industry Comparison - Choice Hotels is part of the Zacks Hotels and Motels industry, where Hilton Worldwide Holdings Inc. reported revenues of $2.87 billion for the last quarter, reflecting a year-over-year change of +7.3% [18].