Wyndham Hotels & Resorts
WH
$71.28
+0.38%
Wyndham Hotels & Resorts is a leading global hotel franchisor operating over 869,000 rooms across more than 20 brands, primarily in the economy and midscale segments, with a strong presence in the United States. The company differentiates itself through its asset-light franchise model, focusing on high-margin royalty and management fees, and has been expanding its extended stay and lifestyle brands to capture evolving traveler preferences. Currently, the stock is under pressure as the company navigates a challenging macroeconomic environment, with a 13.2% decline over the past year, while analysts remain optimistic about its long-term growth prospects, as evidenced by a consensus 'buy' rating and a target price implying significant upside. The debate centers on whether the recent weakness in travel demand and rising costs are temporary headwinds or signs of a more prolonged slowdown.…
WH
Wyndham Hotels & Resorts
$71.28
Investment Opinion: Should I buy WH Today?
Based on the analysis, WH is rated a Buy. The thesis is that the stock is undervalued on forward earnings, with a forward PE of 14.22x versus a trailing PE of 30.35x, and analysts see 28.6% upside to the average target of $97.76. The asset-light model generates high margins (operating margin 28.4%) and strong ROE (41.24%), supporting earnings growth. The consensus recommendation is 'buy' with a mean score of 1.59, and no sell ratings.
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WH 12-Month Price Forecast
The AI assessment is bullish with medium confidence. The stock's forward valuation is compelling, and analyst sentiment is strongly positive. However, the decelerating revenue growth and high debt levels introduce uncertainty. If the company can stabilize revenue growth and maintain margins, the stock is likely to appreciate toward the analyst target. Key developments to watch include Q2 earnings and any changes in travel demand. A downgrade to neutral would occur if revenue growth turns negative or if the forward PE rises above 20x.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Wyndham Hotels & Resorts's 12-month outlook, with a consensus price target around $97.76 and implied upside of +37.2% versus the current price.
Average Target
$97.76
0 analysts
Implied Upside
+37.2%
vs. current price
Analyst Count
—
covering this stock
Price Range
$80 - $115
Analyst target range
The stock has coverage from 17 analysts, with a consensus recommendation of 'buy' and a mean recommendation score of 1.59 (where 1 is strong buy and 5 is sell). The average target price is $97.76, implying an upside of 28.6% from the current price of $76.02. The distribution is bullish, with no sell ratings and several recent affirmations of overweight/buy from major firms like Morgan Stanley, JP Morgan, and Barclays. The target price range is $80.00 to $115.00, with the low target still above the current price, indicating that even the most bearish analyst sees some upside. The high target of $115 implies a 51.3% upside, likely assuming a strong recovery in travel demand and margin expansion, while the low target of $80 suggests a more conservative scenario with modest growth. The relatively wide spread of $35 between low and high targets reflects uncertainty about the pace of recovery, but the overall bullish sentiment is clear.
Bulls vs Bears: WH Investment Factors
The bull case is supported by a strong asset-light model, high margins, and a compelling forward valuation, with analysts seeing significant upside. The bear case is driven by weak price momentum, high leverage, and decelerating revenue growth. Currently, the evidence slightly favors the bulls due to the low forward PE and analyst consensus, but the key tension is whether the recent revenue slowdown is temporary or structural. If travel demand recovers and margins stabilize, the stock could re-rate higher; if not, the high debt and valuation could lead to further downside.
Bullish
- Asset-light model with high margins: Wyndham operates a predominantly franchising model, generating high-margin royalty and management fees. This is reflected in a trailing operating margin of 28.4% and a gross margin of 58.9%, which supports strong cash generation and resilience during demand fluctuations.
- Analyst consensus bullish with 28.6% upside: The stock has a consensus 'buy' rating from 17 analysts, with a mean recommendation score of 1.59 (1=strong buy). The average target price is $97.76, implying a 28.6% upside from the current price of $76.02, and even the low target of $80 is above the current price.
- Forward PE suggests undervaluation: The trailing PE is 30.35x, but the forward PE is only 14.22x, based on estimated EPS of $7.44 for the next fiscal year. This implies the market expects significant earnings growth, and the forward multiple is attractive relative to the stock's historical range and typical lodging industry multiples.
- Strong ROE and profitability: The company boasts a trailing ROE of 41.24% and an ROA of 7.72%, indicating efficient use of equity and assets. Net margin improved to 18.65% in Q1 2026, up from a loss in Q4 2025, showing a rebound in profitability.
Bearish
- Underperforming market with negative momentum: The stock has declined 13.19% over the past year, while the S&P 500 gained 18.56%, resulting in a relative underperformance of 31.75%. The stock is trading near the lower end of its 52-week range, at 84% of the range, indicating persistent selling pressure.
- High leverage and debt burden: The debt-to-equity ratio is 6.53, indicating significant leverage. Interest expenses of $34 million in Q1 2026 consume a large portion of operating income, and the current ratio of 0.71 suggests potential liquidity concerns.
- Revenue growth decelerating: Q1 2026 revenue grew only 3.48% YoY, down from prior quarters (Q3 2025: $382M, Q2 2025: $397M). Sequential revenue declined from Q4 2025's $334M to $327M, indicating a slowdown in travel demand and pricing power.
- Volatile profitability and margin compression: Gross margin swung dramatically from 92.4% in Q3 2025 to 42.5% in Q1 2026, reflecting cost pressures and seasonality. Q4 2025 saw a net loss of $60 million, highlighting earnings volatility and sensitivity to operating conditions.
WH Technical Analysis
The stock is in a clear downtrend over the past year, with a 1-year price change of -13.19%, significantly underperforming the S&P 500's +18.56% gain. Currently trading at $76.02, the stock is near the lower end of its 52-week range, at approximately 84% of the range (calculated as (76.02-69.21)/(90.35-69.21)). This positioning near the lows suggests bearish sentiment, but also potential value if the stock can stabilize. The 52-week low of $69.21 and high of $90.35 provide key reference points for traders.
Beta
0.64
0.64x market volatility
Max Drawdown
-23.9%
Largest decline past year
52-Week Range
$69-$90
Price range past year
Annual Return
-17.5%
Cumulative gain past year
| Period | WH Return | S&P 500 |
|---|---|---|
| 1m | -5.3% | +1.0% |
| 3m | -10.6% | +1.1% |
| 6m | -7.2% | +13.8% |
| 1y | -17.5% | +19.5% |
| ytd | -5.3% | +12.2% |
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WH Fundamental Analysis
Revenue growth has been modest but positive, with the most recent quarter (Q1 2026) showing revenue of $327 million, a 3.48% year-over-year increase. However, this growth is decelerating compared to prior quarters; for example, Q3 2025 revenue was $382 million, and Q2 2025 was $397 million, indicating a sequential decline. The company's revenue is diversified across royalties and franchise fees ($114 million), marketing and reservation fees ($98 million), and loyalty programs ($85 million), with the latter showing strength. Net income in Q1 2026 was $61 million, with a net margin of 18.65%, a significant improvement from the loss in Q4 2025, but gross margin compressed to 42.51% from 92.41% in Q3 2025, reflecting higher costs. The company's profitability is volatile, but it remains solidly profitable on a trailing basis, with an ROE of 41.24% and an ROA of 7.72%.
Quarterly Revenue
$327000000.0B
2026-03
Revenue YoY Growth
+3.5%
YoY Comparison
Gross Margin
42.5%
Latest Quarter
Free Cash Flow
$304000000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is WH Overvalued?
Given that net income is positive, the PE ratio is the primary valuation metric. The trailing PE is 30.35x, while the forward PE is 14.22x, indicating the market expects significant earnings growth. This gap suggests that the market is pricing in a recovery in earnings, which is supported by analyst estimates of EPS of $7.44 for the next fiscal year. Compared to the industry average (not provided, but typically around 20x for lodging), the trailing PE appears elevated, but the forward PE is more reasonable, suggesting a premium is justified by expected growth. Historically, the stock's PE has ranged from about 13x to 94x over the past few years, with the current trailing PE near the middle of that range, while the forward PE is near the lower end, indicating potential undervaluation if estimates are met.
PE
30.3x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 14x~34x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
18.7x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks are significant due to high leverage, with a debt-to-equity ratio of 6.53 and interest expenses of $34 million in Q1 2026. The current ratio of 0.71 indicates potential liquidity stress, and the company's profitability is volatile, as seen in the Q4 2025 net loss of $60 million. Revenue growth is decelerating, with Q1 2026 growth of only 3.48% YoY, which could pressure cash flows and debt servicing capabilities if the trend continues. The high payout ratio of 65.8% also limits financial flexibility for reinvestment or debt reduction.