Wyndham Hotels & Resorts (WH) is rolling out a fresh set of loyalty perks, including the new “Dine Out with Wyndham Rewards” program and a partnership with Grubhub for on-demand dining. The company is also venturing into new international markets to strengthen its position, even as the low-end hotel segment faces some industry headwinds.
See our latest analysis for Wyndham Hotels & Resorts.
Against this backdrop of new partnerships and expansion efforts, Wyndham’s share price hasn’t reflected much excitement recently, but its 1-year total shareholder return of just over 7% hints at steady, if unspectacular, progress. The longer-term trend is brighter, as total shareholder returns have risen more than 35% over three years and 72% over five years. This suggests that momentum is quietly building, even as the broader hotel sector faces headwinds.
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With shares trading nearly 30% below analyst price targets and international ambitions gaining momentum, investors may wonder whether Wyndham’s stock is an overlooked bargain right now or if markets are already factoring in its next phase of growth.
Wyndham Hotels & Resorts recently closed at $81.51, while the most popular narrative, according to Zwfis, estimates fair value at $105.80. This sizable gap puts fresh attention on the numbers powering this premium valuation and sets the stage for a closer look at the assumptions behind it.
“Wyndham is different because they do not actually own any real property at all. Instead they make all of their revenue from fees and royalties coming from their franchisees. This allows them to have good reserves of cash and be available to reward investors whether by share repurchases, dividends or even strategic acquisitions like with what they did with La Quinta a couple of years ago.”
Curious what drives such a bullish outlook? The calculation leans heavily on a business model that produces sky-high margins, relentless global growth, and fast-growing loyalty platforms. Want to uncover the earnings and revenue forecasts that Zwfis believes will unlock this upside? Dive into the full narrative for a closer look at the building blocks behind this value estimate.
Result: Fair Value of $105.80 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, risks remain, including possible slowdowns in global travel or unexpected competition. Either of these factors could dampen Wyndham’s expansion story and value case.
