CHH
Choice Hotels International, Inc.
$108.00
Platform & Compounding FCF
85%
Two-stage FCF DCF
Strong
·
Conviction
Overvalued
Trading 310.3% above fair value
Bear
$0.00
-100.0%
4% stage 1 growth, 11% discount
Fair
$26.32
-75.6%
7% stage 1 growth, 11% discount
Bull
$0.00
-100.0%
9% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
36%
Implied Market Multiple
72.9x
Market is pricing in (growth)
26.2%
vs 6.6% base
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $105.29 from 28 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $26.32 per share.
Warnings
Wall Street's average price target is $105.29 (from 28 analysts). Our estimate is 100% 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