VShoice Hotels (CHH) made quarterly profit of $ 1.51 per share, beating Zacks’ consensus estimate of $ 1.32 per share. This compares to a profit of $ 0.66 per share a year ago. These figures are corrected for non-recurring items.
This quarterly report represents a surprise profit of 14.39%. A quarter ago this hotel franchisor was expected to post a profit of $ 0.91 per share when it actually made a profit of $ 1.22, delivering a surprise of 34.07% .
In the past four quarters, the company has twice beaten consensus EPS estimates.
Choice Hotels, which is owned by Zacks ‘hotel and motel industry, reported revenue of $ 323.37 million for the quarter ended September 2021, missing Zacks’ consensus estimate by 9.52%. This compares to a year ago revenue of $ 210.77 million. The company hasn’t been able to beat consensus revenue estimates over the past four quarters.
The sustainability of the immediate stock price movement based on recently released numbers and future earnings expectations will depend primarily on management feedback on the profit call.
Shares of Choice Hotels are up about 32.8% year-to-date compared to a 24.1% gain for the S&P 500.
What’s next for Choice hotels?
While Choice Hotels has outperformed the market so far this year, the question that comes to investors’ minds is: what’s next for the title?
There are no easy answers to this key question, but one reliable metric that can help investors solve this problem is the company’s earnings outlook. This includes not only the current consensus earnings expectations for the coming quarter (s), but also how those expectations have changed in recent times.
Empirical research shows a strong correlation between short-term stock market movements and trends in earnings estimate revisions. Investors can follow these revisions on their own or rely on a proven scoring tool like Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Prior to this publication of results, the trend in revised estimates for Choice Hotels was favorable. While the magnitude and direction of estimate revisions may change as a result of the company’s just released earnings report, the current status translates to a Zacks Rank # 2 (Buy) for the stock. Thus, stocks are expected to outperform the market in the near future. You can see the full list of Zacks # 1 Rank (Strong Buy) stocks today here.
It will be interesting to see how the estimates for the next quarters and the current year evolve in the days to come. The current consensus estimate of EPS is $ 0.84 on $ 303.57 million of revenue for the coming quarter and $ 3.93 on revenue of $ 1.11 billion for the current year.
Investors should be aware that the outlook for the sector can also have a significant impact on the performance of the stock. In terms of Zacks industry rankings, hotels and motels currently rank in the top 40% of Zacks 250+ industries. Our research shows that the top 50% of industries ranked by Zacks outperform the bottom 50% by a factor of more than 2 to 1.
Zacks’ top picks for leveraging artificial intelligence
By 2021, this world-changing technology is expected to generate $ 327.5 billion in revenue. Now Shark Tank star and billionaire investor Mark Cuban has said AI will create “the world’s first trillionaires.” Zacks’ Urgent Special Report Reveals 3 AI Choices Investors Need To Know Today.
See 3 artificial intelligence stocks with extreme upside potential >>
Click to get this free report
Choice Hotels International, Inc. (CHH): Free Inventory Analysis Report
To read this article on Zacks.com, click here.
Zacks investment research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.