CHH
Choice Hotels International, Inc.
$105.64
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 553.4% above fair value
You pay
$105.64
Bear
$5.43
Fair
$16.17
Bull
$25.78
Bear
$5.43
-94.9%
4% stage 1 growth, 11% discount
Fair
$16.17
-84.7%
6% stage 1 growth, 11% discount
Bull
$25.78
-75.6%
8% stage 1 growth, 11% discount
Adjust Assumptions
6.5%
11.0%
3.0%
Key Value Driver
FCF growth rate (6% base case)
Terminal Value % of EV
36%
Implied Market Multiple
40.6x
Market is pricing in (growth)
18.4%
vs 6.5% base
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (28 analysts)
$111.56
Divergence from AlphaVal
86%
Summary
Using a two-stage FCF DCF with 6% growth decelerating over 15 years, discounted at 11%, the base-case intrinsic value is $16.17 per share.
Warnings
Wall Street's average price target is $111.56 (from 28 analysts). Our estimate is 86% below the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions