Wyndham Reports Mixed Q4 Earnings, Sales Miss Estimates

Company Overview

Wyndham (NYSE:WH), established in 1981, is a leading global hotel franchisor with over 9,000 hotels in nearly 95 countries across six continents. The company operates under various brands, including Wyndham Hotels & Resorts, Ramada Worldwide, Super 8 and Travelodge.

Q4 2024 Financial Performance

In its Q4 2024 earnings report, Wyndham reported mixed financial results:

* Revenue: $341 million, slightly below analyst estimates of $348 million (2% miss) but up 6.2% year-over-year growth.
* Adjusted EPS: $1.04, exceeding analyst estimates of $0.99 (5% beat).
* Adjusted EBITDA: $168 million, marginally above analyst estimates of $167 million (0.6% beat).

Key Business Metrics

* Revenue per available room (RevPAR): $40.01, up 2.9% year-over-year.
* Operating Margin: 38.1%, an increase from 32.4% in Q4 2023.
* Free Cash Flow Margin: 32%, down from 35.5% in Q4 2023.
* Market Capitalization: $8.36 billion

Growth Prospects

While Wyndham has shown positive signs of growth in some areas, such as RevPAR and operating margin, its overall sales growth has been weak in recent years. Over the past five years, revenue declined by 7.3% per year. Sell-side analysts project revenue growth of 6.5% over the next 12 months, below the sector average.

Cash Flow

Wyndham has maintained robust cash flow profitability. Its free cash flow margin averaged 20.7% over the last two years. In Q4, free cash flow totaled $109 million, equivalent to a 32% margin.

Investment Implications

Wyndham's mixed Q4 results and weak sales growth may temper investor enthusiasm in the short term. However, the company's beat on adjusted EPS and higher EBITDA guidance could provide some support. Investors considering Wyndham should carefully evaluate its valuation, business qualities, and growth prospects before making an investment decision.