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Choice Hotels International (FRA:CZH) Gross Margin % Explanation
Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Choice Hotels International had a gross margin of 45.55% for the quarter that ended in Mar. 2026 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Choice Hotels International Gross Margin % Related Terms
Choice Hotels International Gross Margin % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
FRA:CZH vs WH, CVEO, GHG: Gross Margin % Comparison
For the Lodging subindustry, Choice Hotels International's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Choice Hotels International Gross Margin % vs Travel & Leisure Industry
For the Travel & Leisure industry and Consumer Cyclical sector, Choice Hotels International's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Choice Hotels International's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Choice Hotels International (FRA:CZH) has a Gross Margin % of 45.55% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Choice Hotels International and its competitors. This is near median its historical median of 49.50. Over the past decade, Choice Hotels International's Gross Margin % has ranged from 40.20 to 56.07. According to the industry distribution chart, Choice Hotels International ranks #308 out of 789 companies in the Travel & Leisure industry, placing it in the top 39%.
Is Choice Hotels International's Gross Margin % too high?
Choice Hotels International's current Gross Margin % of 45.55% is near median its 10-year median of 49.50. Over the past 10 years, this metric has ranged from a low of 40.20 to a high of 56.07. The Travel & Leisure industry median Gross Margin % is 43.52. Choice Hotels International's value of 45.55% is 4.7% above this industry median. Based on the distribution chart, Choice Hotels International ranks #308 out of 789 companies in the Travel & Leisure industry, which is above the industry midpoint. Overall, Choice Hotels International has a GF Score™ of 85/100, reflecting its overall financial health beyond just this single metric.
How does Choice Hotels International's Gross Margin % compare to WH and CVEO?
According to the Travel & Leisure industry distribution chart, Choice Hotels International ranks #308 out of 789 companies for Gross Margin %. This puts Choice Hotels International in the upper half of its industry. The industry median Gross Margin % is 43.52. Choice Hotels International's value of 45.55% is 4.7% above this benchmark. Historically, Choice Hotels International's own Gross Margin % has ranged from 40.20 to 56.07 over the past decade. While the company's 10-year median is 49.50 vs. the industry median of 43.52, Choice Hotels International has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a Travel & Leisure company?
The median Gross Margin % among Travel & Leisure companies is 43.52, based on 789 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Choice Hotels International's current Gross Margin % of 45.55% is 4.7% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Choice Hotels International and its competitors. For the Travel & Leisure industry, the median Gross Margin % is 43.52 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Choice Hotels International's current Gross Margin % is 45.55%, which is near median its own 10-year median of 49.50. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Choice Hotels International stock overvalued right now?
Choice Hotels International (FRA:CZH) has a current Gross Margin % of 45.55%. The stock's GF Value™ is €113.84, compared to a current price of €92.50 — trading 18.7% below its estimated fair value. The current Gross Margin % is 45.55%, which is near median its 10-year median of 49.50 and 4.7% above the Travel & Leisure industry median of 43.52. Choice Hotels International's overall GF Score™ is 85/100 with 4 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Choice Hotels International (FRA:CZH), the current Gross Margin % is 45.55% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Choice Hotels International (FRA:CZH) Overvalued in 2026?
Based on GuruFocus' analysis, Choice Hotels International stock appears to be undervalued.
The current stock price of €92.50 is trading 18.7% below its estimated GF Value™ of €113.84.
Key valuation signals for FRA:CZH:
Gross Margin %: 45.55% (near median its 10-year median of 49.50)
GF Value™: €113.84 vs. price of €92.50 (18.7% below fair value)
Industry Position: 4.7% above the Travel & Leisure median (#308 of 789)
No single metric tells the full story. See the FRA:CZH stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
At year-end 2025, Choice Hotels operated 657,000 rooms across the economy, midscale, upscale, and extended-stay segments. Comfort Inn and Comfort Suites are the largest brands (27% of the company's total rooms), while Ascend and Cambria (10%) are lifestyle and select-service brands, and WoodSpring (5%) is the company's largest extended-stay brand. Choice closed on its Radisson acquisition in August 2022, which added about 70,000 rooms. Franchises account for 100% of total revenue, and the United States represented 78% of total rooms in 2025.
85GF Score
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Gross Margin % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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