Why Is Hilton Worldwide (HLT) Down 8.7% Since Last Earnings Report?

Core Viewpoint - Hilton Worldwide Holdings Inc. has shown resilience with its recent earnings report, surpassing estimates and demonstrating year-over-year growth in both earnings and revenues, despite a recent decline in share price [3][5][15]. Financial Performance - Hilton reported adjusted earnings per share (EPS) of $2.08 for Q4 2025, exceeding the Zacks Consensus Estimate of $2.00 and up from $1.76 in the same quarter last year [5]. - Total revenues reached $3.09 billion, beating the consensus mark by 3.3% and increasing by 10.9% year-over-year [5]. - Adjusted EBITDA for the quarter was $946 million, reflecting a 10.3% increase year-over-year [8]. Revenue Streams - Franchise and licensing fees improved to $671 million from $642 million year-over-year, although below the estimate of $718.9 million [6]. - Base and other management fees rose to $98 million from $82 million year-over-year, while incentive management fees increased by 17.4% to $101 million [6]. Growth and Expansion - Hilton added 190 hotels, totaling approximately 26,000 rooms, achieving a net room growth of about 21,300 rooms in Q4 2025 [12]. - The company expanded its luxury and lifestyle portfolio, including notable openings like the Waldorf Astoria Shanghai Qiantan and several Tapestry Collection properties [12]. - The development pipeline grew by 37,400 rooms, with 3,703 hotels across 129 countries and territories as of December 31, 2025 [14]. Future Outlook - For Q1 2026, Hilton anticipates net income between $436-$450 million and adjusted EBITDA between $875 million and $995 million, with adjusted EPS projected between $1.91 and $1.97 [16]. - For the full year 2026, net income is estimated to be in the range of $1.98-$2.01 billion, with adjusted EBITDA expected between $4 billion and $4.04 billion [17]. - System-wide RevPAR is projected to increase by 1-2% year-over-year for both Q1 2026 and the full year 2026 [16][17]. Market Sentiment - There has been an upward trend in estimates for Hilton, indicating positive sentiment among investors [18][21]. - The stock currently holds a Zacks Rank 3 (Hold), suggesting an expectation of in-line returns in the coming months [21].