In a recent transaction involving Choice Hotels (NYSE:CHH) International Inc (NYSE:CHH), Patrick Cimerola, the company's Chief Human Resources Officer, sold shares valued at $5,940. The sale, executed on October 15, 2024, involved 44 shares at a price of $135 each. This transaction was made under a 10b5-1 trading plan adopted by Cimerola in March 2024.
Additionally, on October 16, 2024, Cimerola acquired 35.13 shares at an average price of $134.71, amounting to a total acquisition value of $4,732. This purchase was part of multiple transactions at prices ranging between $134.59 and $134.76. Following these transactions, Cimerola holds 18,075 shares in the company.
In other recent news, Choice Hotels International has been the subject of varied analyst perspectives. Baird has maintained an Outperform rating on the company, raising the stock target to $138 from $134, citing potential growth in Revenue Per Available Room (RevPAR) and net unit growth. This contrasts with Goldman Sachs' outlook, which initiated coverage on Choice Hotels with a Sell rating and a $105 price target, expressing concerns about the company's ability to meet its EBITDA and earnings per share (EPS) estimates.
These recent developments follow Choice Hotels' strong financial performance in the second quarter, with a 14% increase in revenue to $258.9 million and a 6% growth in adjusted EBITDA to a record $161.7 million. The company's growth strategy has led to a 9% expected adjusted EBITDA growth for 2024. Choice Hotels' global pipeline has reached a record 115,000 rooms, marking a 22% increase from the previous year.
The company has also seen an 8% year-on-year growth in domestic franchise agreements. Despite these positive indicators, Goldman Sachs stands 5% and 7% below the consensus EPS estimates for 2025 and 2026, respectively. The firm also expressed skepticism about Choice Hotels' ability to achieve its net unit growth targets for 2024. Despite these projections, Choice Hotels remains committed to franchise fee growth and unit growth, supported by a strong cash position for future investments and shareholder returns.
InvestingPro Insights
While Patrick Cimerola's recent transactions provide insight into insider activity at Choice Hotels International Inc (NYSE:CHH), a look at the company's financial metrics and market position offers a broader perspective for investors.
According to InvestingPro data, Choice Hotels boasts a market capitalization of $6.34 billion and trades at a P/E ratio of 22.48 (adjusted for the last twelve months as of Q2 2024). The company's revenue for the same period stands at $771.95 million, with a modest growth of 4.02% year-over-year.
One of the standout InvestingPro Tips highlights Choice Hotels' impressive gross profit margins, which is reflected in the data showing a gross profit margin of 90.13% for the last twelve months. This high margin suggests strong pricing power and efficient cost management in the hospitality industry.
Another noteworthy InvestingPro Tip reveals that the company has maintained dividend payments for 21 consecutive years, indicating a commitment to shareholder returns. This is particularly relevant given the insider transactions, as it demonstrates the company's financial stability and long-term value proposition for investors.
For those interested in a deeper analysis, InvestingPro offers 5 additional tips that could provide further insights into Choice Hotels' financial health and market position. These additional tips, along with real-time metrics, can be valuable for investors looking to make informed decisions about CHH stock.
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