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Dr. Charlie Tian is the founder and CEO of GuruFocus.com, a leading global investment research platform established in 2004. With a Ph.D. in physics, Dr. Tian transitioned from science to finance, applying a data-driven, disciplined approach to value investing.
GreenTree Hospitality GroupGHG +0.88%51 WACC % is 2.81% as of Aug. 07, 2026, which is 42% below its 10-year median of 4.83. GuruFocus rates GHG with a GF Score™ of 51/100 and a GF Value™ of $2.46 (Possible Value Trap). The stock has 3 warning signs investors should review. Among 866 Travel & Leisure companies, GreenTree Hospitality Group ranks better than 91.45% on this metric.
As of today (2026-08-07), GreenTree Hospitality Group's weighted average cost of capital is 2.81%%. GreenTree Hospitality Group's ROIC % is 3.60% (calculated using TTM income statement data).
GreenTree Hospitality Group generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
For a comprehensive WACC calculation, please access the WACC Calculator.
GreenTree Hospitality Group (NYSE:GHG) WACC % Explanation
Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, GreenTree Hospitality Group's weighted average cost of capital is 2.81%%. GreenTree Hospitality Group's ROIC % is 3.60% (calculated using TTM income statement data).
GreenTree Hospitality Group generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
Be Aware
1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.
2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.
3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
Related Terms
GreenTree Hospitality Group WACC % 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.
For the Lodging subindustry, GreenTree Hospitality Group's WACC %, along with its competitors' market caps and WACC % 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.
GreenTree Hospitality Group WACC % vs Travel & Leisure Industry
For the Travel & Leisure industry and Consumer Cyclical sector, GreenTree Hospitality Group's WACC % distribution charts can be found below:
* The bar in red indicates where GreenTree Hospitality Group's WACC % falls into.
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
WACC
=
E
/
(E + D)
*
Cost of Equity
+
D
/
(E + D)
*
Cost of Debt
*
(1 - Tax Rate)
1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, GreenTree Hospitality Group's market capitalization (E) is $115.026 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Mar. 2026, GreenTree Hospitality Group's latest one-year quarterly average Book Value of Debt (D) is $228.8368 Mil.
a) weight of equity = E / (E + D) = 115.026 / (115.026 + 228.8368) = 0.3345
b) weight of debt = D / (E + D) = 228.8368 / (115.026 + 228.8368) = 0.6655
2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 4.66%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. GreenTree Hospitality Group's beta is 0.5042.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 4.66% + 0.5042 * 6% = 7.6852%
3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
As of Mar. 2026, GreenTree Hospitality Group's interest expense (positive number) was $1.081 Mil. Its total Book Value of Debt (D) is $228.8368 Mil.
Cost of Debt = 1.081 / 228.8368 = 0.4724%.
4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = 7.223 / 31.223 = 23.13%.
* 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.
GreenTree Hospitality Group (GHG) has a WACC % of 2.81% as of Aug. 07, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on GreenTree Hospitality Group and its competitors. This is 42% below median its historical median of 4.83. Over the past decade, GreenTree Hospitality Group's WACC % has ranged from 2.82 to 8.64. According to the industry distribution chart, GreenTree Hospitality Group ranks #74 out of 866 companies in the Travel & Leisure industry, placing it in the top 8.5%.
Is GreenTree Hospitality Group's WACC % too high?
GreenTree Hospitality Group's current WACC % of 2.81% is 42% below median its 10-year median of 4.83. Over the past 10 years, this metric has ranged from a low of 2.82 to a high of 8.64. The Travel & Leisure industry median WACC % is 7.80. GreenTree Hospitality Group's value of 2.81% is 64% below this industry median. Based on the distribution chart, GreenTree Hospitality Group ranks #74 out of 866 companies in the Travel & Leisure industry, which is in the top quartile — a strong position relative to peers. Overall, GreenTree Hospitality Group has a GF Score™ of 51/100 and is considered Possible Value Trap, reflecting its overall financial health beyond just this single metric.
How does GreenTree Hospitality Group's WACC % compare to PHSE and INTG?
According to the Travel & Leisure industry distribution chart, GreenTree Hospitality Group ranks #74 out of 866 companies for WACC %. This places GreenTree Hospitality Group in the top 9% of its industry — outperforming the majority of peers. The industry median WACC % is 7.80. GreenTree Hospitality Group's value of 2.81% is 64% below this benchmark. Historically, GreenTree Hospitality Group's own WACC % has ranged from 2.82 to 8.64 over the past decade. While the company's 10-year median is 4.83 vs. the industry median of 7.80, GreenTree Hospitality Group has consistently been below 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 WACC % for a Travel & Leisure company?
The median WACC % among Travel & Leisure companies is 7.80, based on 866 companies in the industry. Companies in the top quartile (top 25%) have a WACC % significantly above this median, while those in the bottom quartile fall well below. However, WACC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. GreenTree Hospitality Group's current WACC % of 2.81% is 64% below 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 WACC % mean?
A high WACC % can signal that a stock is expensive relative to its fundamentals. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on GreenTree Hospitality Group and its competitors. For the Travel & Leisure industry, the median WACC % is 7.80 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. GreenTree Hospitality Group's current WACC % is 2.81%, which is 42% below median its own 10-year median of 4.83. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is GreenTree Hospitality Group stock overvalued right now?
Based on GuruFocus' analysis, GreenTree Hospitality Group (GHG) is currently considered Possible Value Trap. The stock's GF Value™ is $2.46, compared to a current price of $1.14 — trading 53.7% below its estimated fair value. The current WACC % is 2.81%, which is 42% below median its 10-year median of 4.83 and 64% below the Travel & Leisure industry median of 7.80. GreenTree Hospitality Group's overall GF Score™ is 51/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is WACC % calculated?
WACC % is calculated from a company's financial statements. For GreenTree Hospitality Group (GHG), the current WACC % is 2.81% as of Aug. 07, 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 GreenTree Hospitality Group (GHG) Overvalued in 2026?
Based on GuruFocus' analysis, GreenTree Hospitality Group stock appears to be undervalued.
The current stock price of $1.14 is trading 53.7% below its estimated GF Value™ of $2.46.
GuruFocus considers GreenTree Hospitality Group to be Possible Value Trap.
Key valuation signals for GHG:
WACC %: 2.81% (42% below median its 10-year median of 4.83)
GF Value™: $2.46 vs. price of $1.14 (53.7% below fair value)
Industry Position: 64% below the Travel & Leisure median (#74 of 866)
No single metric tells the full story. See the GHG stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
GreenTree Hospitality Group Ltd is a franchised hotel operator in China as franchised and managed hotels represent almost all the hotels in its hotel network. The company operates its hotels under GreenTree Inns, GreenTree Eastern, Gme, Gya and VX, GreenTree Alliance, Vatica, and others. The Group reports its financial results in two operating segments: Hotel Business, which consists of leased-and-operated hotels and franchised-and-managed hotels operating under the hotel related brand, and Restaurant Business, which consists of leased-and-operated restaurants and franchised-and-managed restaurants operating under the brands of Da Niang and Bellagio. It derives maximum revenue from Hotel Business segment. It operates solely in China and generates all its revenue from China itself.
51GF Score
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