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CHH (Choice Hotels International) Financial Strength : 4 (As of Mar. 2025)


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What is Choice Hotels International Financial Strength?

Choice Hotels International has the Financial Strength Rank of 4.

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is rated on a scale of 1 to 10 and is based on these factors:

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.
2. Debt to revenue ratio. The lower, the better.
3. Altman Z-Score.
4. Other debt related ratios.

A higher score indicates a stronger financial position, with companies rated 7 or above considered financially stable and unlikely to face distress. Conversely, a score of 3 or below suggests potential financial difficulties, indicating a higher risk of distress.

Choice Hotels International's Interest Coverage for the quarter that ended in Mar. 2025 was 3.77. Choice Hotels International's debt to revenue ratio for the quarter that ended in Mar. 2025 was 1.49. As of today, Choice Hotels International's Altman Z-Score is 3.72.


Competitive Comparison of Choice Hotels International's Financial Strength

For the Lodging subindustry, Choice Hotels International's Financial Strength, along with its competitors' market caps and Financial Strength 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's Financial Strength Distribution in the Travel & Leisure Industry

For the Travel & Leisure industry and Consumer Cyclical sector, Choice Hotels International's Financial Strength distribution charts can be found below:

* The bar in red indicates where Choice Hotels International's Financial Strength falls into.


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Choice Hotels International Financial Strength Calculation

GuruFocus Financial Strength Rank measures how strong a company's financial situation is. It is based on these factors

A company ranks high with financial strength is likely to withstand any business slowdowns and recessions.

1. The debt burden that the company has as measured by its Interest Coverage (current year). The higher, the better.

Note: If both Interest Expense and Interest Income are empty, while Net Interest Income is negative, then use Net Interest Income as Interest Expense.

Interest Coverage is a ratio that determines how easily a company can pay interest expenses on outstanding debt. It is calculated by dividing a company's Operating Income (EBIT) by its Interest Expense:

Choice Hotels International's Interest Expense for the months ended in Mar. 2025 was $-21 Mil. Its Operating Income for the months ended in Mar. 2025 was $80 Mil. And its Long-Term Debt & Capital Lease Obligation for the quarter that ended in Mar. 2025 was $1,987 Mil.

Choice Hotels International's Interest Coverage for the quarter that ended in Mar. 2025 is

Interest Coverage=-1*Operating Income (Q: Mar. 2025 )/Interest Expense (Q: Mar. 2025 )
=-1*80.031/-21.242
=3.77

The higher the ratio, the stronger the company's financial strength is.

2. Debt to revenue ratio. The lower, the better.

Choice Hotels International's Debt to Revenue Ratio for the quarter that ended in Mar. 2025 is

Debt to Revenue Ratio=Total Debt (Q: Mar. 2025 ) / Revenue
=(Short-Term Debt & Capital Lease Obligation + Long-Term Debt & Capital Lease Obligation) / Revenue
=(0 + 1987.075) / 1331.44
=1.49

3. Altman Z-Score.

Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.

The zones of discrimination were as such:

When Z-Score is less than 1.81, it is in Distress Zones.
When Z-Score is greater than 2.99, it is in Safe Zones.
When Z-Score is between 1.81 and 2.99, it is in Grey Zones.

Choice Hotels International has a Z-score of 3.72, indicating it is in Safe Zones. This implies the Z-Score is strong.

Good Sign:

Altman Z-score of 3.72 is strong.

* 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.


Choice Hotels International  (NYSE:CHH) Financial Strength Explanation

The rank is rated on a scale of 1 to 10. A higher score indicates a stronger financial position, with companies rated 7 or above considered financially stable and unlikely to face distress. Conversely, a score of 3 or below suggests potential financial difficulties, indicating a higher risk of distress.

Choice Hotels International has the Financial Strength Rank of 4.


Choice Hotels International Financial Strength Related Terms

Thank you for viewing the detailed overview of Choice Hotels International's Financial Strength provided by GuruFocus.com. Please click on the following links to see related term pages.


Choice Hotels International Business Description

Traded in Other Exchanges
Address
915 Meeting Street, Suite 600, North Bethesda, MD, USA, 20850
As of Dec. 31, 2024, Choice Hotels operated 654,000 rooms across the economy, midscale, upscale, and extended-stay segments. Comfort Inn and Comfort Suites are the largest brands (26% of the company's total domestic rooms), while Ascend and Cambria (10% of total domestic rooms) are newer lifestyle and select-service brands. 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 2024.
Executives
Ervin R Shames director 35 MOLLBROOK DR, WILTON CT 06897
Scott E Oaksmith officer: Controller 1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850
Dominic Dragisich officer: Chief Financial Officer 1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850
Patrick Cimerola officer: Senior Vice President 1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850
Patrick Pacious officer: Senior Vice President 1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850
Robert J Mcdowell officer: Chief Commercial Officer 1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850
Simone Wu officer: Senior Vice President 1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850
Noha Abdalla officer: Chief Marketing Officer 1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850
William L Jews director C/O FORTRESS INTERNATIONAL GROUP, INC., 7226 LEE DEFOREST DRIVE, SUITE 203, COLUMBIA, MD 21046
Brian Bainum director 8171 MAPLE LAWN BLVD, SUITE 375, FULTON MD 20759
John P Tague director
David A Pepper officer: SVP, Franchise Development 1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850
John Bonds officer: Senior Vice President 1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850
Sanchez Raul Ramirez officer: Chief Strat & Intl Op Officer 1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850
Elizabeth A Redmond officer: Principal Accounting Officer 1 CHOICE HOTELS CIRCLE, ROCKVILLE MD 20850