Investors in H World Group Ltd (HTHT, Financial) have witnessed a notable fluctuation in the company's stock price recently. With a current market capitalization of $12.32 billion, the stock is trading at $38.65. Over the past week, the stock has experienced a 4.88% loss, yet when looking at the broader picture, H World Group Ltd has seen a significant 16.87% gain over the past three months. Despite this growth, the GF Value stands at $60.49, which is higher than the past GF Value of $48.97. However, both the current and past GF Valuations suggest caution, labeling the stock as a Possible Value Trap, indicating that investors should think twice before making an investment decision.
Introduction to H World Group Ltd
H World Group Ltd, operating within the Travel & Leisure industry, is a prominent multi-brand hotel group based in China with a global presence. The company's business model encompasses leased, manachised, and franchised operations. H World Group Ltd is segmented into legacy Huazhu and legacy DH, offering a diverse range of brands across various market segments, from economy to luxury. These include well-known names such as HanTing Hotel, JI Hotel, and Steigenberger Hotels & Resorts, among others. The company's expansive portfolio caters to a wide spectrum of customer preferences, positioning it as a versatile player in the hospitality sector.
Assessing Profitability
When it comes to profitability, H World Group Ltd holds a strong Profitability Rank of 7 out of 10. The company's Operating Margin is an impressive 19.11%, outperforming 78.14% of 819 companies in the industry. Its Return on Equity (ROE) stands at a robust 28.26%, surpassing 85.88% of its peers. Additionally, H World Group Ltd's Return on Assets (ROA) and Return on Invested Capital (ROIC) are 5.08% and 4.60%, respectively, indicating a strong ability to generate profits relative to its assets and invested capital. The company has maintained profitability for 7 out of the past 10 years, which is better than 61.37% of 774 companies in the same space.
Growth Trajectory of H World Group Ltd
H World Group Ltd's Growth Rank is an impressive 8 out of 10. The company has demonstrated a steady increase in revenue, with a 3-Year Revenue Growth Rate per Share of 6.80%, which is higher than 49.1% of 776 companies in the industry. Over a 5-year period, the Revenue Growth Rate per Share has been even more remarkable at 8.70%, outpacing 81.84% of its competitors. Looking ahead, the Total Revenue Growth Rate (Future 3Y To 5Y Est) is projected at an optimistic 19.18%, which is better than 86.77% of 189 companies. This suggests that H World Group Ltd is not only growing but is expected to continue this trajectory in the near future.
Notable Shareholders in H World Group Ltd
Several prominent investors have taken significant positions in H World Group Ltd, demonstrating their confidence in the company's prospects. Al Gore (Trades, Portfolio) is the top holder with 1,222,257 shares, representing 0.38% of the company's shares. Following closely is Howard Marks (Trades, Portfolio), holding 1,090,795 shares, which accounts for 0.34% of the shares. Jim Simons (Trades, Portfolio) also has a notable stake with 833,856 shares, equating to 0.26% of the company's shares. The involvement of these respected investors further solidifies the company's standing in the market.
Competitive Landscape
When compared to its competitors, H World Group Ltd holds its own in the Travel & Leisure industry. Hyatt Hotels Corp (H, Financial) has a larger market cap of $15.65 billion, while Wyndham Hotels & Resorts Inc (WH, Financial) and Choice Hotels International Inc (CHH, Financial) have market caps of $5.81 billion and $6.05 billion, respectively. This places H World Group Ltd in a competitive position, with a market cap that reflects its substantial presence in the industry.
Conclusion
In summary, H World Group Ltd has demonstrated a strong stock performance with a significant 16.87% gain over the past three months, despite a recent weekly loss. The company's profitability metrics are robust, with high rankings in Operating Margin, ROE, ROA, and ROIC. Growth prospects remain promising, as evidenced by the company's Growth Rank and future revenue growth estimates. The confidence of significant holders like Al Gore (Trades, Portfolio), Howard Marks (Trades, Portfolio), and Jim Simons (Trades, Portfolio) further underscores the potential of H World Group Ltd's stock. While the current GF Valuation advises caution, the company's solid fundamentals and growth trajectory make it a noteworthy contender in the competitive landscape of the Travel & Leisure industry.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
