Choice Hotels

CHH · NYSE · Consumer Discretionary · Financials, fiscal 2016 to 2025

CHH · Last close · October 26, 2026

$108.95

Choice Hotels' revenue rose 0.8% to $1.6 billion in fiscal 2025. Its operating margin was 28.1%, down from 29.3% a year earlier. Free cash flow was $164 million, down 23.1%. It paid out $192 million in dividends and buybacks, 117% of free cash flow. The diluted share count fell 3.1%.

CHOICE HOTELS INTERNATIONAL INC /DE Latest fiscal year ended December 31, 2025 10-K filed February 19, 2026 · 0001046311-26-000008 Updated October 9, 2026

Revenue

$1.6B

0.8%

Operating margin

28.1%

1.2 pts

Net income

$370M

23.4%

Free cash flow

$164M

23.1%

Return on capital

19.5%

2.1 pts

Market cap

$4.9B

Oct 26 close

P/E

15.4x

On $7.09 EPS, 4 qtrs

Operating margin is operating income as a share of revenue. Free cash flow is cash from operations minus capital spending. Return on capital is after-tax operating income as a share of the money invested in the business: debt plus equity, minus cash. Market cap is the last closing share price times the latest diluted share count, so it is approximate. P/E is the last close divided by diluted earnings per share over the last four quarters, or the latest fiscal year where the quarters aren't available; there is none when the company made a loss.

What Choice Hotels does

Choice Hotels is mainly a hotel franchisor. It does not run most of the hotels that carry its names. Instead, independent hotel owners pay it for the right to use its brands, which include Comfort Inn, Quality Inn, Sleep Inn, Econo Lodge, Clarion, Radisson, WoodSpring Suites, Cambria Hotels and Everhome Suites. At the end of 2025 its system had 7,575 open hotels with 656,825 rooms in 49 states, the District of Columbia, and 50 countries and territories.

Its main source of revenue is franchise fees. These include an initial fee and ongoing royalty, marketing and reservation fees, usually set as a percentage of a hotel's room revenue. It also earns money from deals with vendors and travel partners, and from a small number of hotels it owns (such as Cambria and Everhome Suites hotels) and manages. Most of its revenue comes from the United States, even though it also franchises abroad, often through master franchisees who sub-license its brands in a region.

It had another 825 hotels in its pipeline: under construction, awaiting conversion or approved for development. The company says it does not plan to keep owned hotels for the long term and expects to sell them to franchisees who sign long-term Choice franchise agreements.

Its biggest risks, as it describes them

Lodging industry risks, since its fees rise and fall with hotel room revenue.
Its reliance on the skill and decisions of third-party hotel operators.
Failing to grow its franchise system, or franchisees ending their contracts.
Owners who do not invest enough to keep their hotels up to brand standards.
Losses from hotel ownership, development and financing support that stray from its asset-light model.

From Choice Hotels's annual report on Form 10-K, filed February 19, 2026, in our words; the 10-K has the full description and every risk factor. Updated with each new 10-K.

Charts show fiscal years, from the 10-K filings.

Revenue and margins

Revenue

US$ billions, fiscal years

Margins

Percent of revenue

GrossOperatingNetFree cash flow

Net income and earnings per share

From fiscal 2016 to 2025, earnings per share grew 13.8% a year and net income 14.8% a year, as buybacks cut the share count by 17%.

Net income

US$ billions, fiscal years; loss years in red.

Diluted earnings per share

US$ per share, fiscal years, restated for any stock splits; loss years in red.

Returns on capital

Return on capital and on equity

Percent. Return on capital is after-tax operating income over the money invested in the business (debt plus equity, minus cash); return on equity is net income over shareholders' equity. Both use the average of opening and closing balances.

Return on capitalReturn on equity

Cash flow

Free cash flow

US$ billions. Cash from operations minus capital expenditure; negative years in red.

Payouts and share count

Dividends and buybacks

US$ billions, cash paid in each fiscal year

DividendsShare buybacks

Diluted share count

Weighted-average diluted shares, millions

Valuation

Two ways to value Choice Hotels yourself, both starting from its filings: a discounted cash flow model and the price-to-earnings method.

Discounted cash flow (DCF)

A discounted cash flow (DCF) model values a business as the cash it may generate in future, discounted back to today. The starting figures come from Choice Hotels' 10-K (or, for net cash and shares, its latest 10-Q) and the assumptions are yours: start from one of three example scenarios, then change any figure to see what it implies for a share, and how that compares with the last share price.

Value per share on three example scenarios, from Choice Hotels' cash from operations minus depreciation in fiscal 2025 (free cash flow before spending to grow: capital spending was 1.8 times depreciation, which holds its free cash flow down) of $211M, net cash of −$1.9B at December 31, 2025 and 47 million diluted shares, from its filings. The scenarios are fitted to Choice Hotels: the base scenario's growth in years 1 to 5 is its revenue growth over the last 3 years, 4.4% a year; the cautious and optimistic ones are lower and higher, and growth in years 6 to 10 is halfway to the long-run rate. The base scenario's discount rate is 12%: 11% for a cyclical or higher-risk business (Hotels, Resorts & Cruise Lines), plus 1 point as a smaller company, worth $4.9B; the cautious and optimistic ones use a point more and a point less. Select one to load it into the calculator. These are the model's arithmetic on those assumptions, not a forecast or a price target.

From the filings

Starting free cash flow, US$ millions

Cash from operations minus depreciation in fiscal 2025: a rough guide to cash flow before spending to grow, for a company building heavily.

Net cash, US$ millions

Cash and short-term investments minus debt and finance leases at December 31, 2025. Negative means net debt.

Diluted shares, millions

Weighted-average diluted shares in fiscal 2025.

Your assumptions

Start from

Fitted to Choice Hotels's own revenue growth, as above. Cautious: growth of 2% then 2% a year, 2% after year 10, a 13% discount rate. Base: growth of 4.5% then 3.5% a year, 2.5% after year 10, a 12% discount rate. Optimistic: growth of 6.5% then 5% a year, 3% after year 10, a 11% discount rate.

Free cash flow growth, years 1 to 5 (% a year)

Free cash flow growth, years 6 to 10 (% a year)

Growth after year 10 (% a year)Long-run growth forever after year 10. Usually close to inflation, and always below the discount rate.

Discount rate (% a year)The yearly return an investor wants for the risk. A higher rate gives a lower value.

Value per share on these assumptions

—

Last close, October 26, 2026: $108.95
Value on these assumptions, against the last close: —

Cash flows in years 1 to 10, valued today: —
Everything after year 10, valued today: —
Plus net cash: —
Share of value from after year 10: —

Projected free cash flow

US$ billions. Each column is one year's projected free cash flow, split into what it is worth today and the part removed by discounting.

Value todayRemoved by discounting

How the value changes with two assumptions

Value per share in US$, with the growth rates above. The highlighted cell matches the current assumptions.

How the model works. Free cash flow grows at the first rate for five years and the second rate for five more, and each year is discounted at the discount rate. Everything after year 10 is valued as year-10 cash flow × (1 + growth after year 10) ÷ (discount rate − growth after year 10), discounted back ten years. Net cash is added and the total is divided by diluted shares. The result depends entirely on the assumptions. It is not a forecast, a price target or a recommendation. The last close is the consolidated US closing price, from Databento.

Price-to-earnings (P/E) method

Another common way to value a company is to multiply its earnings per share by a price-to-earnings (P/E) multiple: the number of years of today's earnings an investor pays for a share. A higher multiple usually means investors expect earnings to grow. Choose a multiple, for example from similar companies, to see the value it gives.

Value per share on three example scenarios, from Choice Hotels' earnings per share of $7.09 (over the last four quarters). Each grows earnings for a year at the cash flow scenarios' rates and applies a multiple to next year's earnings: 17.8×, the middle of Choice Hotels' own P/E today, its peers' median and its sector's median (the Consumer Discretionary median) for the base scenario, 20% less and more for the cautious and optimistic ones. The price is brought back a year at 13%, 12% and 11%. Select one to load it into the calculator. These are the model's arithmetic on those assumptions, not a forecast or a price target.

Earnings per share, US$

Diluted earnings per share over the four quarters to June 30, 2026, from the 10-Qs and 10-K.

P/E multiple

P/E today is the last close divided by the latest earnings per share, the four quarters' where available. Peers: Wyndham Hotels & Resorts, Sabre, Vail Resorts, Travel + Leisure.

Earnings growth in the years ahead (% a year) Starts at Choice Hotels' revenue growth over the last 3 years, 4.4% a year, as the base scenario does.

Earnings per share in the years ahead, US$

Year 1Year 2Year 3Year 4Year 5

Type your own estimate for any year; the years after it carry on at the growth rate.

Apply the multiple to earnings

A multiple on a future year's earnings gives the price then, brought back to today at the discount rate below.

Discount rate (% a year) The yearly return an investor wants for the risk, as in the cash flow model.

Value per share today at this multiple

—

Last close, October 26, 2026: $108.95
Value at this multiple, against the last close: —
Choice Hotels' P/E at the last close: 15.4×

Company	Last close	Earnings per share	P/E today
Vail ResortsMTN	$149.40	$4.12	36.3×
Wyndham Hotels & ResortsWH	$72.85	$2.73	26.7×
Travel + LeisureTNL	$65.62	$3.70	17.7×
Choice HotelsCHH	$108.95	$7.09	15.4×
SabreSABR	$1.64	$1.64	1.0×

How the P/E method works. Value per share is earnings per share times the multiple. On a future year's earnings, that gives the price in that year, which is brought back to today at the discount rate: price ÷ (1 + discount rate) for each year ahead. It is quick and easy to compare across companies, but it ignores debt and cash, and earnings can swing with one-off gains and charges, so a multiple says most about steady, profitable businesses. Like the cash flow model, the result depends entirely on the assumptions you choose. It is not a forecast, a price target or a recommendation.

Balance sheet

Fiscal year end	FY21	FY22	FY23	FY24	FY25
Cash and short-term investments	512	42	27	40	45
Debt incl. finance leases	1,060	1,204	1,568	1,768	1,906
Net debt (negative means net cash)	549	1,162	1,541	1,728	1,861
Net debt to EBITDA	1.2x	2.3x	3.7x	3.4x	3.7x
Debt to equity	4.0x	7.8x	—	—	10.5x
Interest coverage	9.2x	10.9x	5.9x	5.3x	4.9x
Current ratio	1.3x	0.8x	0.3x	0.7x	0.9x
Quick ratio	1.3x	0.8x	0.3x	0.7x	0.9x

US$ millions unless stated, at each fiscal year end. Net debt to EBITDA is debt minus cash, divided by operating income before depreciation and amortization: roughly how many years of those earnings the net debt equals. Debt to equity is debt as a multiple of shareholders' equity. Interest coverage is operating income divided by interest expense. The current ratio is current assets over current liabilities; the quick ratio leaves out inventory.

Insider trades

Over the 12 months between October 27, 2025 and October 26, 2026, no insider bought Choice Hotels shares on the open market, and 4 insiders sold $4.8 million, $4.2 million of it under trading plans set up in advance.

Date	Insider	Trade	Shares	Price	Value	Filing
Oct 20, 2026	Dominic DragisichPresident & CEO, Director	Sold plan	1,227	$112.00	$137,424	Form 4
Aug 18, 2026	William L JewsDirector	Sold	5,057	$106.98	$540,998	Form 4
Jun 16, 2026	Scott E OaksmithSVP, Chief Financial Officer	Sold plan	2,000	$115.00	$230,000	Form 4
Jun 12, 2026	Scott E OaksmithSVP, Chief Financial Officer	Sold plan	2,000	$110.00	$220,000	Form 4
May 26, 2026	Dominic DragisichInterim CEO	Sold plan	22,621	$114.25	$2.6 million	Form 4
Mar 18, 2026	Scott E OaksmithSVP, Chief Financial Officer	Sold plan	1,603	$100.00	$160,300	Form 4
Mar 17, 2026	Scott E OaksmithSVP, Chief Financial Officer	Sold plan	600	$100.07	$60,042	Form 4
Feb 2, 2026	Simone WUSenior Vice President	Sold plan	8,080	$101.56	$820,579	Form 4

Open-market purchases and sales by officers, directors and 10% owners, from their Form 4 filings with the SEC: one row per person, day and filing, at the day's average price. Grants, option exercises and shares withheld for tax aren't counted. Insiders buy and sell for many reasons, such as taxes, spreading their savings or a plan set up months earlier, so a trade on its own says little about where a company is heading. For information only, not investment advice. Insider trades at all companies

Piotroski F-score

The F-score counts how many of nine simple tests of profitability, funding and efficiency a company passed in a year (Piotroski, 2000). The more tests passed, the stronger the year: 8 or 9 is strong, 0 to 2 weak. Companies that report no gross profit are scored on the other eight.

Test	FY23	FY24	FY25
Net income is positive	Pass	Pass	Pass
Cash from operations is positive	Pass	Pass	Pass
Return on assets rose	Fail	Pass	Pass
Cash from operations exceeds net income	Pass	Pass	Fail
Debt fell relative to assets	Fail	Fail	Pass
Current ratio rose	Fail	Pass	Pass
Share count didn't rise	Pass	Pass	Pass
Gross margin rose	—	—	—
Revenue rose relative to assets	Pass	Fail	Fail
F-score	5 of 8	6 of 8	6 of 8
Accruals ratio	−1.7%	−0.8%	3.6%

The accruals ratio is net income minus cash from operations, over average total assets.

Compare

Put Choice Hotels side by side with any other company we cover: revenue, growth, margins, cash flow and returns, with ten years of charts.

Similar companies

Company	Year	Revenue growth	Operating margin	Free cash flow margin	Return on capital	Net debt to EBITDA	F-score	Compare
Choice Hotels	FY25	0.8%	28.1%	10.2%	19.5%	3.7x	6
Wyndham Hotels & Resorts	FY25	1.5%	28.1%	22.5%	9.9%	5.4x	4	Compare
Sabre	FY25	0.9%	10.7%	−6.9%	8.9%	8.9x	5	Compare
Vail Resorts	FY26	−4.3%	14.8%	8.7%	8.1%	4.6x	5	Compare
Travel + Leisure	FY25	4.1%	13.8%	13.0%	8.5%	7.9x	—	Compare

Each company's latest fiscal year. Fiscal years end in different months, so the periods don't line up exactly. Free cash flow margin is free cash flow as a share of revenue. Net debt to EBITDA is explained under the balance sheet, and the F-score above.

10 years of figures

Fiscal year	FY16	FY17	FY18	FY19	FY20	FY21	FY22	FY23	FY24	FY25
Income statement
Revenue	808	941	1,041	1,115	774	1,069	1,402	1,544	1,585	1,597
Revenue growth	−6.0%	16.5%	10.6%	7.1%	−30.6%	38.1%	31.1%	10.1%	2.6%	0.8%
Gross profit	—	—	—	—	—	—	—	—	—	—
Research and development	—	—	—	—	—	—	—	—	—	—
Operating income	187	290	318	318	122	429	479	375	464	448
Net income	107	122	216	223	75	289	332	258	300	370
Diluted EPS (US$)	2.46	2.15	3.80	3.98	1.35	5.15	5.99	5.07	6.20	7.90
Diluted shares (millions)	56	56	57	56	56	56	55	51	48	47
Cash flow
Cash from operations	152	257	243	271	110	384	367	297	319	270
Capital expenditure	25	23	48	57	34	74	66	69	107	107
Free cash flow	127	234	195	213	76	309	301	228	213	164
Dividends paid	46	49	49	48	25	25	52	56	56	54
Share buybacks	36	10	149	51	55	13	435	363	381	138
Acquisitions	1	0	231	0	0	0	550	0	0	73
Stock-based compensation	15	25	15	17	7	23	40	40	38	38
Balance sheet at fiscal year end
Cash and short-term investments	202	235	27	34	235	512	42	27	40	45
Debt incl. finance leases	841	726	755	852	1,059	1,060	1,204	1,568	1,768	1,906
Total assets	908	995	1,138	1,387	1,587	1,932	2,102	2,395	2,530	2,918
Total liabilities	1,164	1,254	1,322	1,410	1,593	1,666	1,948	2,359	2,576	2,737
Shareholders' equity	−365	−259	−184	−24	−6	266	155	36	−45	181
Margins and ratios
Gross margin	—	—	—	—	—	—	—	—	—	—
Operating margin	23.1%	30.8%	30.6%	28.6%	15.7%	40.1%	34.1%	24.3%	29.3%	28.1%
Net margin	13.2%	13.0%	20.8%	20.0%	9.7%	27.0%	23.7%	16.7%	18.9%	23.2%
Free cash flow margin	15.7%	24.9%	18.8%	19.1%	9.9%	28.9%	21.5%	14.8%	13.4%	10.2%
Return on capital	54.1%	57.3%	64.9%	39.3%	15.1%	40.3%	34.1%	19.9%	21.6%	19.5%
Return on equity	—	—	—	—	—	222.2%	158.0%	—	—	—
Return on assets	13.1%	12.8%	20.3%	17.6%	5.1%	16.4%	16.5%	11.5%	12.2%	13.6%
Net debt to EBITDA	3.3x	1.7x	2.2x	2.4x	5.6x	1.2x	2.3x	3.7x	3.4x	3.7x

US$ millions unless stated. Where a later 10-K restated a year, the latest filed figure is shown. Download all figures (CSV, US$ millions)

Source: Choice Hotels' Form 10-K filings, from SEC EDGAR. For information only, not investment advice. The Filing Desk is not affiliated with Choice Hotels.