Choice Hotels misses Q1 EPS estimates but beats revenue expectations
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 22 2026
0mins
Should l Buy CHH?
Source: Newsfilter
Choice Hotels International Inc's stock fell 12.81% as it crossed below the 5-day SMA amid a broader market decline, with the Nasdaq-100 down 0.47% and the S&P 500 down 0.02%.
The company's Q1 earnings report revealed a non-GAAP EPS of $1.07, missing estimates by $0.25, although revenue reached $340.6 million, beating expectations. The net income was $20.3 million, and the adjusted EBITDA was $125.7 million, indicating effective cost control. Additionally, the U.S. royalty rate increased by 11 basis points to 5.22%, reflecting enhanced brand value and market positioning, which may support future revenue growth.
Despite the earnings miss, the company projects a net income for 2026 between $265 million and $275 million, showing cautious optimism from management regarding future growth, although the overall market sentiment remains neutral.
Trade with 70% Backtested Accuracy
Stop guessing "Should I Buy CHH?" and start using high-conviction signals backed by rigorous historical data.
Sign up today to access powerful investing tools and make smarter, data-driven decisions.
Analyst Views on CHH
Wall Street analysts forecast CHH stock price to rise
10 Analyst Rating
2 Buy
5 Hold
3 Sell
Hold
Current: 99.080
Low
91.00
Averages
103.44
High
126.00
Current: 99.080
Low
91.00
Averages
103.44
High
126.00
About CHH
Choice Hotels International, Inc. is a lodging franchisor with over 7,500 hotels, representing over 650,000 rooms, in 50 countries and territories. The Company’s segments include Hotel Franchising & Management and Corporate & Other. The Hotel Franchising & Management reportable segment includes the Company's hotel franchising operations, which consists of its 22 brands and brand extensions and the hotel management operations of 13 hotels (including four owned hotels). Its brand names include Clarion, Clarion Pointe, Comfort Inn, Comfort Suites, Country Inn & Suites by Radisson, Sleep Inn, Quality, Park Inn by Radisson, Everhome Suites, WoodSpring Suites, MainStay Suites, Suburban Studios, Radisson Blu, Park Plaza, Cambria Hotels, Ascend Collection, Radisson RED, Radisson Individuals, Radisson, Radisson Collection, Radisson Inn & Suites, Econo Lodge, and Rodeway Inn. Ascend Collection is a global collection brand offering resort, boutique, and historic properties.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Barclays Lowers Target Price for Choice Hotels International Inc. to $100 from $112
- Barclays Target Price Adjustment: Barclays has reduced its target price for Choice Hotels from $112 to $100.
- Market Implications: This adjustment reflects Barclays' updated outlook on the performance of Choice Hotels in the market.
See More
Choice Hotels Reports Significant Q1 Profit Decline Amid Record Revenue
- Significant Profit Decline: Choice Hotels reported an unadjusted profit of $0.44 per share for Q1, a 53% drop year-over-year, indicating a substantial deterioration in profitability despite record revenue, leading to a 14% decline in stock price during trading.
- Revenue Misses Expectations: The company generated $340.6 million in revenue for the first quarter, a 2.3% increase from last year but $7 million below expectations, primarily due to a 2.3% decline in U.S. RevPAR impacted by hurricanes, reflecting challenges in the market environment.
- Cautious Future Outlook: Choice Hotels maintains its FY26 EPS guidance at $6.92 to $7.14, below the consensus estimate of $7.17, indicating a cautious stance on future profitability that may affect investor confidence.
- Global RevPAR Forecast Downgrade: The expectation for global RevPAR is adjusted to a decline of 2% to an increase of 1%, and this downgrade could further impact Choice Hotels' market performance, especially in the competitive hotel industry.
See More
Choice Hotels (CHH) Q1 2026 Earnings Transcript
See More
Choice Hotels Q1 Earnings Report Analysis
- Earnings Performance: Choice Hotels reported a Q1 non-GAAP EPS of $1.07, missing estimates by $0.25, although revenue reached $340.6 million, reflecting a 2.3% year-over-year increase and beating expectations by $6.79 million, indicating resilience in revenue growth.
- Net Income and EBITDA: The net income for Q1 was $20.3 million, with diluted EPS at $0.44, while adjusted EBITDA totaled $125.7 million, demonstrating effective cost control despite the impact on overall profitability.
- Royalty Rate Increase: The U.S. royalty rate expanded by 11 basis points to 5.22% compared to the same period last year, reflecting enhanced brand value and market positioning, which may lay the groundwork for future revenue growth.
- 2026 Outlook: The company projects net income for 2026 to be between $265 million and $275 million, with adjusted net income expected to range from $320 million to $330 million, indicating cautious optimism from management regarding future growth, despite a neutral market outlook.
See More
Choice Hotels to Announce Q1 Earnings on April 30
- Earnings Announcement Schedule: Choice Hotels is set to release its Q1 2023 earnings on April 30 before market open, with consensus EPS estimated at $1.32, reflecting a 1.5% year-over-year decline, and revenue expected at $333.81 million, a 0.3% year-over-year increase.
- Historical Performance Review: Over the past two years, Choice Hotels has surpassed EPS estimates 63% of the time and revenue estimates 38% of the time, indicating a degree of stability in its financial performance.
- Expectation Adjustment Dynamics: In the last three months, EPS estimates have seen four upward revisions and three downward adjustments, while revenue estimates have experienced two upward revisions and three downward adjustments, reflecting market divergence regarding the company's future performance.
- Market Sentiment Analysis: Choice Hotels has recently been rated as “Neutral,” primarily due to its earnings results aligning with market expectations and a tepid outlook, which may impact investor confidence.
See More
Choice Hotels Integrates AI with AWS for Enhanced Operations
- AI Integration Enhances Efficiency: Choice Hotels is collaborating with Amazon Web Services (AWS) to integrate artificial intelligence across its operations, optimizing hotel bookings, revenue management, and guest communication, thereby enhancing overall operational efficiency.
- Transformation into Intelligent Enterprise: By building a more intelligent and responsive enterprise on AWS cloud infrastructure, Choice Hotels can manage its hotel inventory more effectively, improving customer experience and strengthening its competitive position in the market.
- Positive Growth Outlook: Choice Hotels anticipates positive net room growth in the U.S. for 2026, driven by portfolio optimization and conversion momentum, indicating the company's ongoing development potential in the market.
- Financial Performance Exceeds Expectations: Choice Hotels reported a non-GAAP EPS of $1.60, beating expectations by $0.06, with revenue of $390.15 million exceeding forecasts by $20.51 million, reflecting the company's robust financial performance.
See More
Barclays Lowers Target Price for Choice Hotels International Inc. to $100 from $112
- Barclays Target Price Adjustment: Barclays has reduced its target price for Choice Hotels from $112 to $100.
- Market Implications: This adjustment reflects Barclays' updated outlook on the performance of Choice Hotels in the market.
See More
Choice Hotels Reports Significant Q1 Profit Decline Amid Record Revenue
- Significant Profit Decline: Choice Hotels reported an unadjusted profit of $0.44 per share for Q1, a 53% drop year-over-year, indicating a substantial deterioration in profitability despite record revenue, leading to a 14% decline in stock price during trading.
- Revenue Misses Expectations: The company generated $340.6 million in revenue for the first quarter, a 2.3% increase from last year but $7 million below expectations, primarily due to a 2.3% decline in U.S. RevPAR impacted by hurricanes, reflecting challenges in the market environment.
- Cautious Future Outlook: Choice Hotels maintains its FY26 EPS guidance at $6.92 to $7.14, below the consensus estimate of $7.17, indicating a cautious stance on future profitability that may affect investor confidence.
- Global RevPAR Forecast Downgrade: The expectation for global RevPAR is adjusted to a decline of 2% to an increase of 1%, and this downgrade could further impact Choice Hotels' market performance, especially in the competitive hotel industry.
See More
Choice Hotels (CHH) Q1 2026 Earnings Transcript
See More
Choice Hotels Q1 Earnings Report Analysis
- Earnings Performance: Choice Hotels reported a Q1 non-GAAP EPS of $1.07, missing estimates by $0.25, although revenue reached $340.6 million, reflecting a 2.3% year-over-year increase and beating expectations by $6.79 million, indicating resilience in revenue growth.
- Net Income and EBITDA: The net income for Q1 was $20.3 million, with diluted EPS at $0.44, while adjusted EBITDA totaled $125.7 million, demonstrating effective cost control despite the impact on overall profitability.
- Royalty Rate Increase: The U.S. royalty rate expanded by 11 basis points to 5.22% compared to the same period last year, reflecting enhanced brand value and market positioning, which may lay the groundwork for future revenue growth.
- 2026 Outlook: The company projects net income for 2026 to be between $265 million and $275 million, with adjusted net income expected to range from $320 million to $330 million, indicating cautious optimism from management regarding future growth, despite a neutral market outlook.
See More
Choice Hotels to Announce Q1 Earnings on April 30
- Earnings Announcement Schedule: Choice Hotels is set to release its Q1 2023 earnings on April 30 before market open, with consensus EPS estimated at $1.32, reflecting a 1.5% year-over-year decline, and revenue expected at $333.81 million, a 0.3% year-over-year increase.
- Historical Performance Review: Over the past two years, Choice Hotels has surpassed EPS estimates 63% of the time and revenue estimates 38% of the time, indicating a degree of stability in its financial performance.
- Expectation Adjustment Dynamics: In the last three months, EPS estimates have seen four upward revisions and three downward adjustments, while revenue estimates have experienced two upward revisions and three downward adjustments, reflecting market divergence regarding the company's future performance.
- Market Sentiment Analysis: Choice Hotels has recently been rated as “Neutral,” primarily due to its earnings results aligning with market expectations and a tepid outlook, which may impact investor confidence.
See More
Choice Hotels Integrates AI with AWS for Enhanced Operations
- AI Integration Enhances Efficiency: Choice Hotels is collaborating with Amazon Web Services (AWS) to integrate artificial intelligence across its operations, optimizing hotel bookings, revenue management, and guest communication, thereby enhancing overall operational efficiency.
- Transformation into Intelligent Enterprise: By building a more intelligent and responsive enterprise on AWS cloud infrastructure, Choice Hotels can manage its hotel inventory more effectively, improving customer experience and strengthening its competitive position in the market.
- Positive Growth Outlook: Choice Hotels anticipates positive net room growth in the U.S. for 2026, driven by portfolio optimization and conversion momentum, indicating the company's ongoing development potential in the market.
- Financial Performance Exceeds Expectations: Choice Hotels reported a non-GAAP EPS of $1.60, beating expectations by $0.06, with revenue of $390.15 million exceeding forecasts by $20.51 million, reflecting the company's robust financial performance.
See More
