Choice Hotels International Inc. Common Stock (CHH)

FairStock Score: 55/100 — STEADY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

Choice Hotels is an asset-light franchisor with 1,754 employees and brands from Comfort Inn to Radisson. I like that model: it collects fees without owning most hotels, which can generate high returns on capital when the system is healthy, though the moat depends on franchisee demand and brand strength. The filed record is solid: in FY2023 the company earned $258.5M on $1.5B of revenue; in FY2024 $299.7M on $1.6B; and in FY2025 $369.9M on $1.6B. FairStock's Lynch rule calls it a FAST GROWER based on 37.5% yearly profit growth over five years and 15.6% revenue growth. But the latest quarter, fiscal Q2 2026 ended 2026-06-30, showed revenue of $440.8M, net income of $64.3M, and diluted EPS of $1.41. Revenue rose from $426.4M in fiscal Q2 2025, but net income fell from $81.7M and EPS from $1.75, so the near-term trend has weakened. Financial health is mixed: FairStock gives a Piotroski F-Score of 8/9 and an Altman Z-Score of 2.35, yet ROCE is 9.16% and FCF yield is 2.5%. The balance sheet is unusual: P/B is 32.77, ROE is 566.36%, and D/E is 14.82 as FairStock calculations, so book equity is tiny relative to the market price. At the 2026-10-13 close of $103.88, P/E is 14.71 against EPS of $7.06, and EV/EBITDA is 11.47. That does not look extravagant on earnings, but the Graham Number is $22.37, a -364.37% margin of safety, so asset-based value is absent. I see a good business priced for continued execution, not a bargain.

In plain English: Choice Hotels International franchises hotel brands such as Comfort Inn, Quality and Radisson, earning fees from hotel owners rather than owning most properties. The business has grown profits over the past few years, but the latest filed quarter showed lower profit than a year earlier. At the 2026-10-13 close of $103.88, the price looks fair to full compared with its earnings and very high compared with its accounting net worth, so it is not an obvious bargain.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer