Choice Hotels (CZH) AI Stock Analysis

Company Guidance

For full year 2026, Choice expects adjusted EBITDA of $641 million to $651 million, adjusted diluted earnings per share of $6.92 to $7.07, US RevPAR growth of 1.5% to 2.5%, global RevPAR growth of 1.5% to 2.5%, US average royalty rate expansion of approximately 9 basis points, global net rooms growth of approximately 1.5%, US net rooms growth of approximately 1% by year end, an approximately 250 basis point improvement in the U.S. net exit rate compared with the last year, adjusted SG&A growth of 9% year over year excluding Harvest Hosts, approximately $200 million of share repurchases, approximately $20 million of net capital outlays for hotel development related activities compared with a $103 million in 2025, and a net marketing and reservation system reimbursable deficit of $135 million; fourth quarter U.S. RevPAR growth is expected to be higher than the third quarter, the fourth quarter contribution to adjusted EBITDA from Harvest Hosts net of the impact of recent hotel dispositions is expected to be approximately $1 million, and the full year benefit of the FIFA World Cup is estimated at approximately 30 basis points. For 2027, adjusted SG&A growth excluding Harvest Hosts is expected to moderate to the low to mid single digits, free cash flow conversion is expected to return over the next couple of years to that 55%, 60% free cash flow conversion where we have been historically, partnership services and fees growth is expected to be low to mid single digit for the full year and more mid single digit increase as a base longer term, and every 1% on both net rooms growth in the U.S. and RevPAR is about $5 million each, while 1 basis point of effective royalty rate is another $1 million.