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CHH, Choice Hotels International

Revenue is led by Franchise and management fees (42%) and Revenue for reimbursable costs from franchised and managed properties (39%), with 3 more lines behind.

Latest annual: FY2025 10-K

CHH · Choice Hotels International

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$1.6B

+0.8% YoY · 16% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $1.6B 5-yr avg $1.4B

Operating margin 26.7% 5-yr avg 31.2%

ROIC 17% 5-yr avg 25%

Owner-earnings margin 10% 5-yr avg 21%

Free cash flow margin 9% 5-yr avg 18%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

What it is: A hotel and lodging business, earning on rooms filled and the brand that fills them.
What moves the needle: Operating margin has run about 29% through the cycle, a wide margin for the work it does — whether that reflects a durable edge or one that can fade is what the record weighs. Read this kind of business on occupancy and revenue per available room, and the model. On its own account, the filing leans hardest on concentrated dependence, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has run high across the record (median 30%, above 15% in 9 of 10 years), though buybacks and expensed R&D and brands shrink the capital base, so the figure overstates the underlying economics. The steadier read is owner earnings: roughly 20% of revenue reaches owners as cash, consistently. Whether these returns reflect real pricing power or an accounting artifact is the judgment the 10-K is for.

Every line is arithmetic on the company's filings, shown in full in the sections below.

Where the money comes from

read the 10-K →

Revenue spreads across 5 lines, the largest Franchise and management fees at 42%.

Revenue by product line, FY2025

Franchise and management fees42%$673M
Revenue for reimbursable costs from franchised and managed properties39%$616M
Owned hotels8%$121M
Partnership services and fees7%$114M
Other5%$72M

From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMMar 2026
											Income statement
$808M	$941M	$1.0B	$1.1B	$773M	$1.1B	$1.4B	$1.5B	$1.6B	$1.6B	$1.6B	RevenueRevenue
19%	18%	16%	15%	19%	14%	12%	20%	20%	21%	21%	SG&A / revenueSG&A/rev
$187M	$290M	$318M	$319M	$122M	$429M	$479M	$375M	$464M	$448M	$429M	Operating incomeOp. inc.
23.2%	30.8%	30.6%	28.6%	15.7%	40.1%	34.1%	24.3%	29.3%	28.1%	26.7%	Operating marginOp. mgn
$107M	$122M	$216M	$223M	$75M	$289M	$332M	$259M	$300M	$370M	$346M	Net incomeNet inc.
28%	51%	21%	17%	—	23%	24%	23%	24%	19%	19%	Effective tax rateTax rate
											Cash flow & returns
$152M	$257M	$243M	$271M	$110M	$384M	$367M	$297M	$319M	$270M	$227M	Operating cash flowOp. cash
$7M	$7M	$14M	$19M	$26M	$25M	$30M	$45M	$52M	$60M	$63M	DepreciationDeprec.
$38M	$128M	$12M	$29M	$9M	$70M	$4M	($7M)	($32M)	($159M)	($182M)	Working capital & otherWC & other
$25M	$23M	$48M	$57M	$34M	$74M	$66M	$69M	$107M	$107M	$88M	CapexCapex
3.1%	2.5%	4.6%	5.1%	4.3%	6.9%	4.7%	4.4%	6.7%	6.7%	5.5%	Capex / revenueCapex/rev
$145M	$251M	$229M	$252M	$84M	$359M	$337M	$252M	$267M	$211M	$164M	Owner earningsOwner earn.
18.0%	26.6%	21.9%	22.6%	10.9%	33.6%	24.0%	16.3%	16.9%	13.2%	10.2%	Owner earnings marginOE mgn
$127M	$234M	$195M	$213M	$76M	$309M	$301M	$228M	$213M	$164M	$139M	Free cash flowFCF
15.7%	24.9%	18.7%	19.1%	9.9%	28.9%	21.5%	14.8%	13.4%	10.2%	8.6%	Free cash flow marginFCF mgn
$1M	$0	$231M	$0	$0	$0	$550M	$0	$0	$73M	$73M	AcquisitionsAcquis.
$46M	$49M	$49M	$48M	$25M	$25M	$53M	$56M	$55M	$53M	$53M	Dividends paidDiv. paid
$36M	$10M	$149M	$51M	$55M	$13M	$435M	$363M	$381M	$138M	—	BuybacksBuybacks
49%	62%	46%	33%	15%	40%	28%	18%	21%	18%	17%	ROICROIC
—	—	—	—	—	109%	215%	726%	—	204%	252%	Return on equityROE
—	—	—	—	—	99%	181%	568%	—	175%	213%	Retained to equityRetained/eq
											Balance sheet
$202M	$235M	$27M	$34M	$235M	$512M	$42M	$27M	$40M	$45M	$44M	Cash & investmentsCash+inv
$107M	$126M	$138M	$142M	$150M	$153M	$217M	$196M	$177M	$207M	$244M	ReceivablesReceiv.
$48M	$68M	$74M	$73M	$83M	$81M	$119M	$131M	$135M	$156M	$146M	Accounts payablePayables
$59M	$58M	$65M	$68M	$67M	$72M	$98M	$65M	$42M	$51M	$97M	Operating working capitalOper. WC
$345M	$400M	$244M	$237M	$433M	$762M	$348M	$297M	$339M	$406M	$411M	Current assetsCur. assets
$264M	$285M	$318M	$326M	$256M	$570M	$436M	$943M	$463M	$467M	$434M	Current liabilitiesCur. liab.
1.3×	1.4×	0.8×	0.7×	1.7×	1.3×	0.8×	0.3×	0.7×	0.9×	0.9×	Current ratioCurr. ratio
$79M	$81M	$169M	$159M	$159M	$159M	$219M	$220M	$220M	$306M	$305M	GoodwillGoodwill
$908M	$995M	$1.1B	$1.4B	$1.6B	$1.9B	$2.1B	$2.4B	$2.5B	$2.9B	$2.9B	Total assetsAssets
$841M	$727M	$755M	$852M	$1.1B	$1.1B	$1.2B	$1.6B	$1.8B	$1.9B	$2.0B	Total debtDebt
$638M	$491M	$728M	$818M	$824M	$549M	$1.2B	$1.5B	$1.7B	$1.9B	$2.0B	Net debt / (cash)Net debt
4.2×	6.4×	6.9×	6.8×	2.5×	9.2×	10.9×	5.9×	5.3×	4.9×	4.6×	Interest coverageInt. cov.
($365M)	($259M)	($184M)	($24M)	($6M)	$266M	$155M	$36M	($45M)	$181M	$137M	Shareholders’ equityEquity
											Per share
56.2M	56.5M	56.6M	55.7M	55.5M	55.9M	55.1M	50.7M	48.1M	46.6M	46.0M	Shares out (diluted)Shares
$14.39	$16.65	$18.40	$20.01	$13.91	$19.13	$25.43	$30.46	$32.96	$34.28	$34.86	Revenue / shareRev/sh
$1.90	$2.16	$3.82	$4.00	$1.36	$5.17	$6.03	$5.10	$6.23	$7.94	$7.51	EPS (diluted)EPS
$2.58	$4.44	$4.04	$4.52	$1.52	$6.42	$6.11	$4.96	$5.56	$4.52	$3.56	Owner earnings / shareOE/sh
$2.26	$4.14	$3.45	$3.83	$1.38	$5.54	$5.47	$4.50	$4.42	$3.51	$3.01	Free cash flow / shareFCF/sh
$0.82	$0.86	$0.86	$0.86	$0.46	$0.45	$0.95	$1.11	$1.15	$1.15	$1.15	Dividends / shareDiv/sh
$0.45	$0.41	$0.84	$1.03	$0.61	$1.33	$1.19	$1.35	$2.22	$2.29	$1.92	Cap. spending / shareCapex/sh
$-6.50	$-4.57	$-3.25	$-0.42	$-0.10	$4.76	$2.81	$0.70	$-0.94	$3.89	$2.99	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	+10.1%/yr	+19.8%/yr
Owner earnings / share	+6.4%/yr	+24.4%/yr
EPS	+17.2%/yr	+42.4%/yr
Dividends / share	+3.8%/yr	+20.3%/yr
Capital spending / share	+19.9%/yr	+30.5%/yr

The year, in the company's words

the filing →

Verbatim from the 10-K's management discussion. Each sentence is shown only because its subject, direction check out against the filed numbers on this page. The words are the company's; the arithmetic is the record's.

Franchise and management fees+0.5%
“Franchise and management fees increased $17.6 million primarily due to a $14.7 million increase in revenues generated from programs, platforms, and services associated with the Company's franchise operations and a $0.9 million increase in international royalty fees, all of which were partially offset by a $3.4 million decrease in U.S. royalty fees.”
✓ direction matches the filed record

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked.

Share count

47Mpeak FY2018

ROIC

18%low FY2020

Net debt ÷ owner earnings

8.8×peak FY2020

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

$211Mowner earningsvs.$370Mnet incomelow FY2020

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetainedBeyond op. cash

Each year's outlays against its operating cash: the mix, and how it drifts. The hatched cap is spending beyond that year's operating cash — financed from the balance sheet or borrowing, not operations.

FY2016FY2025

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business earned $211M of owner earnings, the operating cash left after the $60M it takes just to hold its position. It put $47M more into growth; free cash flow, after that spending, was $164M.

Reported net income$370M

Owner earnings$211M · 13% of revenue

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$370M	$300M	$259M	$332M	$289M
Depreciation & amortizationnon-cash charge added back	+$60M	+$52M	+$45M	+$30M	+$25M
Working capital & othertiming of cash in and out, other non-cash items	−$159M	−$32M	−$7M	+$4M	+$70M
Cash from operations	$270M	$319M	$297M	$367M	$384M
Maintenance capital expenditurethe spending needed just to hold position and volume	−$60M	−$52M	−$45M	−$30M	−$25M
Owner earnings	$211M	$267M	$252M	$337M	$359M
Growth capital expenditurediscretionary; spent to get bigger, not to stand still	−$47M	−$55M	−$24M	−$35M	−$50M
Free cash flow	$164M	$213M	$228M	$301M	$309M
Owner-earnings marginowner earnings ÷ revenue	13%	17%	16%	24%	34%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the maintenance capital it must spend to hold its position (here about $60M, roughly its depreciation, the rate its assets wear out). The other $47M of its capital spending is growth it chose, not upkeep it owed; charged only with the maintenance it must do, the business earns well more than the year's free cash flow shows.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 10-K · source on SEC EDGAR →

Will it survive?

Can it pay its interest? 4.9×

Adequate

Operating income $448M ÷ interest expense $91M

What this means
Comfortable in a normal year, but below the margin of safety Graham looked for. Worth checking how stable the coverage has been across a full cycle.
How heavy is the debt, net of cash? $1.9B · 4.2× operating profit

Heavy net debt

Cash $45M − debt $1.9B

What this means
Netting $45M of cash and short-term investments against $1.9B of debt leaves $1.9B owed, about 4.2× a year's operating profit (4.3× on the gross debt, before the cash). Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? —

Not enough data

What this means
The filing data didn't include the inputs for this check.

Is it a good business?

Return on invested capital 28%

Very high (≥25%) through the cycle

10-yr median, range 15%–62%; 18% latest = NOPAT $363M ÷ invested capital $2.0B

Industry peers: median 9%

What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 10 years (it ran 18% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
Owner-earnings margin 18%

High through the cycle

10-yr median margin, range 11%–34%; latest $211M = operating cash $270M − maintenance capex $60M

Industry peers: median 9%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 13% of revenue this year, a 18% median across 10 years. It chose to put $47M more into growth, so free cash flow this year was $164M — the gap is investment, not weakness.
Are earnings backed by cash? 0.73×

Mostly cash-backed

Cash from ops $270M ÷ net income $370M

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? 91%

Returns most of it

Dividends + buybacks $192M ÷ Owner Earnings $211M

What this means
Of $211M Owner Earnings, $192M (91%) went back to shareholders, $53M dividends, $138M buybacks. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
Investing or harvesting? 1.79×

Expanding

Capex $107M ÷ depreciation $60M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 3 of 6 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Near

Revenue ≥ $2B · $1.6B

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Miss

Current ratio ≥ 2× · 0.87×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Conservative debt Miss

Debt ≤ working capital · $1.9B vs ($61M) WC

What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
Earnings stability Pass

A profit every year (10-yr record) · no losses

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Pass

Uninterrupted dividends · paid every year (10)

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth Pass

Earnings +33% over the record · +108%

What this means
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $6.80/share (latest year $8.13), the averaged base the calculator's gate runs on, and book value is $3.98/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 10 of 10

What this means
Never lost money over the record, the earnings stability Graham insisted on.
Return on capital ≥ 15% 9 of 10 yrs

What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
Operating margin 28% → 27% (3-yr avg ends)

What this means
Through the cycle the operating margin held roughly steady — about 28% early, 27% lately, median 29%.
Reinvestment, incremental ROIC 11%

What this means
Reinvested capital came back at only a modest incremental return — near the cost of capital, where extra growth adds little per dollar. The record shows whether it is a soft stretch or a thinning moat.
Owner earnings growth +2%/yr

What this means
Owner earnings grew about 2% a year over the record.
Worst year 2020 · 15.7% op. margin

What this means
Stayed profitable even in its hardest year, the resilience that survives recessions.
Share count −2.1%/yr

What this means
The share count is shrinking, buybacks are quietly growing your slice of the business.
Dividend record rising

What this means
Paid and raised the dividend across the record, the continuity Graham prized.

Does AI threaten the moat?

Moderate contestability

AI is likely to reshape costs and some products here without clearly contesting or sparing the core moat; how the company itself frames it is the tell.

In its own filing A competitive risk, new this year

Its FY2025 10-K names artificial intelligence as a competitive threat, in language that was not in the prior year's filing.

“If we fail to keep pace with rapidly evolving technological developments in artificial intelligence ("AI"), our competitive position and business results may suffer.”

The question is whether a moat the record shows as durable outlasts a technology that lowers the cost of part of what the firm sells. The durability is read in the record above, the filing's own framing of AI beside it; the industry label decides nothing on its own.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of the latest quarter, Mar 31, 2026

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$411M

Cash & short-term investments$44M
Receivables$244M
Other current assets$123M

Current liabilities$434M

Accounts payable$146M
Other current liabilities$288M

Current ratio0.95×all current assets ÷ what's due · Graham looked for 2×

Quick ratio0.95×stricter: inventory excluded

Cash ratio0.10×strictest: cash alone against what's due

Working capital($23M)the cushion left after near-term bills

Its current ratio is below 1, which usually reads as strain; here it is likely structural strength. What it owes in the near term is money to suppliers and customers (payables and deferred revenue), not to lenders, so the balance sheet is funded by operating float, the way Costco's and Amazon's are. The low ratio can be the edge, not the risk; the cash-conversion cycle and the debt due above say which.

Revenue, latest quarter vs. a year ago+2.3%the freshest read on whether the business is still growing

Current ratio, recent quarters1.0× → 0.9×

Deeper floors

Tangible book value($1.3B)equity stripped of goodwill & intangibles

Net current asset value($2.4B)Graham's net-net: current assets less all liabilities

Debt incl. operating leases$2.1B$115M of it operating leases

Deferred revenue$243Mcustomer cash collected before delivery; operating float

From the company's latest filing.

How the cash was used, 2016–2025

Over the record, the business generated $2.7B of operating cash; how management split it reads as a cash returner, paying most of what it earns straight back to owners.

Reinvested$610M · 23%
Dividends$460M · 17%
Buybacks$1.6B · 61%

Returned to owners$2.1B
88% of the owner earnings the business produced over the span, $460M as dividends and $1.6B as buybacks.
Source of fundingOperating cash
Operating cash covered reinvestment and returns; over the span debt rose $1.2B and cash and short-term investments fell $159M.
Average price paid for buybacks$107.85
Across the years where the filing reports a share count, 10M shares were bought for $1.0B, about $107.85 each. Year to year the price paid ranged from $59.88 (2016) to $133.65 (2021); its heaviest year, 2022, paid $117.50 ($435M).
Net change in share count−18.0%
The diluted count fell from 56M to 46M, so the buybacks outran the stock issued to staff.
Dividend record$1.15/sh
Paid in 10 of the years on record, the per-share dividend growing about 4% a year. It was cut at least once along the way.
Return on what it retained—
Not read here: owner earnings are negative over the span, or the company returned nearly all its earnings rather than retaining them, so there is too little retained to measure a return on.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Acquisitions & goodwill

from the balance sheet & the 10-year cash-flow record

Goodwill grows only when a company acquires and falls only when it concedes it overpaid. The size of that bet, the cash put into buying rather than building, and how much has already been written off.

Goodwill & intangibles$1.4B48% of all assets; the premium carried on the balance sheet for businesses acquired

Against book equityexceeds itgoodwill alone is larger than the company’s entire book equity; stripped of the acquisition premium, there is no net book worth

Cash spent acquiring$856Mover 10 years buying other businesses, against $610M of capital spent building

$7M written down across 2 years (2018, 2019): goodwill the company has already conceded it overpaid for, charged against earnings. A write-down costs no cash (the cash went out when the deal was signed), but it is management marking its own past judgment to market.

Goodwill, acquired intangibles and equity from the latest balance sheet; acquisition spend and write-downs summed across the 10-year record, from the company's own filings.

Management, ownership & pay

read the proxy →

From the proxy: how much of the business the people running it own, and how they are paid, beside what the business earned for its owners in the same years.

Fiscal year	Chief executive	Pay, as filed	“Actually paid”	Owner earnings
2021	Patrick Pacious	$11.2M	$24.1M	$359M
2022	Patrick Pacious	$38.0M	$27.1M	$337M
2023	Patrick Pacious	$6.4M	$6.2M	$252M
2024	Patrick Pacious	$7.8M	$16.9M	$267M
2025	Patrick Pacious	$8.1M	−$5.2M	$211M

Both pay figures are the company’s own, from the pay-versus-performance table its proxy statement files. “As filed” is the Summary Compensation Table total: salary, bonus, and equity awards at their value on the day of grant. “Actually paid” is the SEC’s prescribed recalculation, which re-marks those equity awards to what they became as they vested; it can swing far above or below the filed figure in either direction, and negative years occur. Owner earnings are the whole business's, from the record above, for the same fiscal years.

Insider ownership23.9%
The stake all directors and executive officers hold together, per the 2026 proxy: skin in the game, the first thing Munger reads.

Inverting the record

Invert: instead of why Choice Hotels International is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

3 of the 6 tests turned up something to look into; the other 3 came back clean.

Look hereIs it less profitable than it was?15.5% vs 22.2%
The owner-earnings margin averaged 22.2% early in the record and 15.5% across the last three years, and the latest year has not recovered. Ask the filing whether that is a structural drift or a cyclical trough — price, mix, cost, or a competitor — and whether it is permanent.
Look hereDid debt outgrow the business?$841M → $2.0B
Debt rose from $841M to $2.0B while owner earnings went from about $208M to $243M — about 4.0 years of owner earnings in debt then, about 8.2 now: measured against what the business earns, the balance sheet carries more debt than it did. Debt raised for buybacks or deals rather than growth is the kind that bites in a downturn.
Look hereAre "one-time" charges a yearly habit?5 of 10 years
Management took an impairment or write-down in 5 of the last 10 years, $33M in all. Taken across the majority of the record, the "one-time" label is wearing thin — ask whether these are past deals coming due rather than genuinely isolated events. Read it beside the goodwill the company still carries.

And these came back clean

Did the share count rise anyway?
Did reported profit become cash?
Did receivables and inventory outpace sales?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

What an owner would ask, FY2025

read the 10-K →

Which reported numbers are a judgment call?
Management names Revenue recognition as critical estimates
each rests partly on management's judgment; the filing's note sets out the assumptionsverify →

The questions the record and the charts do not answer on their own; each carries the figure and the place to look.

Peers, Hotels & Resorts

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
MARMarriott International	$26.2B	—	12.4%	17%	10%
HLTHilton Worldwide Holdings Inc.	$12.0B	—	17.5%	20%	15%
HHyatt Hotels Corporation	$7.1B	—	8.6%	7%	6%
HGVHilton Grand Vacations Inc. Common Stock	$4.5B	—	12.8%	5%	7%
BALYBally's Corporation	$2.5B	—	5.7%	5%	2%
CHHChoice Hotels International	$1.6B	—	28.9%	30%	20%
WHWyndham Hotels & Resorts	$1.4B	—	25.7%	12%	18%
Group median	—	—	12.8%	12%	10%

The price

What a price has to assume.

What the price implies

reverse-DCF

Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Choice Hotels International has delivered.

Today’s price $

Through the cycle, Choice Hotels International earns about $319M on its 20.0% median owner-earnings margin. This year’s 13.2% margin runs below that; the reported figure may understate a lean year. Normalize, below, values the price on that through-cycle figure rather than the latest year.

Base Normalize · through-cycle ($319M) Net of stock comp Steady-state · maintenance capex ($167M)

—

The assumptions Required return 9% Years of high growth 10 Terminal growth 2.5%

9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.

Enter a price above to run it.

Implied by the price—

Owner-earnings growth · ’21→’25−9%/yr

Owner-earnings growth · ’16→’25+0%/yr

Owner-earnings yield—

P/E (3-yr earnings ’23–’25)—

P/B—

Graham’s price gate—

Graham capped the multiple at 15×; Buffett and Munger let that rule go: a wonderful business can deserve 50× if the thesis holds. The gate marks the bargain-hunter's floor.

Against a high-grade bond: Graham’s yardstick bond yield%

Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.

Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.

Free cash flow $139M on 45M shares outstanding, per the 10-Q cover, as of 2026-04-23; net debt $2.0B. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. Capex ($88M) runs well above depreciation ($63M), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $167M, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.

Weigh CHH against another business →

Cite: Owner Scorecard, "Choice Hotels International (CHH), the owner's record," https://ownerscorecard.com/c/CHH, data as of 2026-07-09.

Manual order: ← CHEF its page in the Manual CHMG →

Industry order: ← BWLP the Hotels & Resorts chapter CVEO →