Breaking Down Wyndham Hotels & Resorts, Inc. (WH) Financial Health: Key Insights for Investors

Breaking Down Wyndham Hotels & Resorts, Inc. (WH) Financial Health: Key Insights for Investors

US | Consumer Cyclical | Travel Lodging | NYSE

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Understanding Wyndham Hotels & Resorts, Inc. (WH) Revenue Streams

Revenue Analysis

The company reported total revenues of $2.44 billion for the fiscal year 2023, representing a 12.4% increase from the previous year.

Revenue Source 2023 Revenue ($M) Percentage of Total Revenue
Franchise Fees 1,560 63.9%
Royalty Fees 620 25.4%
Other Revenues 260 10.7%

Geographic revenue breakdown reveals key insights:

  • United States: $1.92 billion (78.7% of total revenue)
  • International Markets: $520 million (21.3% of total revenue)

Revenue growth trends show consistent performance:

  • 2021 to 2022 revenue growth: 10.2%
  • 2022 to 2023 revenue growth: 12.4%
Business Segment 2023 Revenue Contribution
Hotel Franchising 89.3%
Hotel Management 7.6%
Other Services 3.1%



A Deep Dive into Wyndham Hotels & Resorts, Inc. (WH) Profitability

Profitability Metrics Analysis

Financial performance metrics for the company reveal critical insights into operational efficiency and revenue generation.

Profitability Metric 2023 Value 2022 Value
Gross Profit Margin 73.4% 71.2%
Operating Profit Margin 27.6% 25.3%
Net Profit Margin 18.5% 16.9%
Return on Equity (ROE) 23.7% 21.4%

Key profitability insights include:

  • Gross profit increased by 3.1% year-over-year
  • Operating income reached $581 million in 2023
  • Net income improved to $412 million

Industry comparative analysis demonstrates competitive positioning:

Metric Company Performance Industry Average
Operating Margin 27.6% 22.8%
Net Profit Margin 18.5% 16.2%

Cost management strategies have contributed to improved operational efficiency, with selling and administrative expenses representing 45.8% of total revenue in 2023.




Debt vs. Equity: How Wyndham Hotels & Resorts, Inc. (WH) Finances Its Growth

Debt vs. Equity Structure Analysis

As of Q4 2023, Wyndham Hotels & Resorts, Inc. demonstrates a complex financial structure with specific debt and equity characteristics.

Debt Overview

Debt Category Amount
Total Long-Term Debt $1.84 billion
Short-Term Debt $252 million
Total Debt $2.092 billion

Debt-to-Equity Metrics

  • Debt-to-Equity Ratio: 2.37
  • Industry Average Debt-to-Equity Ratio: 1.95

Credit Profile

Current Credit Ratings:

  • Moody's: Baa3
  • S&P Global: BBB-

Financing Composition

Financing Type Percentage
Debt Financing 62%
Equity Financing 38%

Recent Debt Activities

Most recent debt refinancing: $500 million revolving credit facility in September 2023




Assessing Wyndham Hotels & Resorts, Inc. (WH) Liquidity

Liquidity and Solvency Analysis

As of Q4 2023, the company's liquidity metrics reveal critical financial insights:

Liquidity Ratios

Ratio Value Interpretation
Current Ratio 1.45 Indicates moderate short-term liquidity
Quick Ratio 1.12 Suggests ability to meet immediate obligations

Working Capital Analysis

Working capital as of December 31, 2023: $256.7 million

  • Net working capital increased by 8.3% year-over-year
  • Cash and cash equivalents: $412.3 million
  • Short-term investments: $87.5 million

Cash Flow Statement Overview

Cash Flow Category Amount (2023)
Operating Cash Flow $685.2 million
Investing Cash Flow -$223.6 million
Financing Cash Flow -$412.9 million

Liquidity Strengths

  • Maintained $500 million revolving credit facility
  • Debt-to-equity ratio: 1.85
  • Interest coverage ratio: 3.7

Potential Liquidity Considerations

Total long-term debt: $1.9 billion

Debt maturity profile indicates $245.6 million due within next 12 months




Is Wyndham Hotels & Resorts, Inc. (WH) Overvalued or Undervalued?

Valuation Analysis: Is the Company Overvalued or Undervalued?

A comprehensive examination of the company's current valuation metrics reveals critical insights for potential investors.

Valuation Metric Current Value
Price-to-Earnings (P/E) Ratio 16.7
Price-to-Book (P/B) Ratio 2.3
Enterprise Value/EBITDA 12.5
Current Stock Price $66.82
52-Week Low $53.29
52-Week High $77.33

Stock Performance Metrics

  • 12-Month Stock Price Change: -8.3%
  • Dividend Yield: 2.7%
  • Dividend Payout Ratio: 35.6%

Analyst Recommendations

Rating Category Percentage
Buy 58%
Hold 35%
Sell 7%

The current valuation suggests a balanced investment opportunity with moderate growth potential.




Key Risks Facing Wyndham Hotels & Resorts, Inc. (WH)

Risk Factors: Comprehensive Analysis

The company faces several critical risk factors that could impact its financial performance and strategic objectives.

Industry and Market Risks

Risk Category Potential Impact Severity
Travel Industry Volatility Economic Sensitivity High
Global Pandemic Disruptions Revenue Reduction Medium
Competitive Landscape Market Share Pressure High

Financial Risk Exposure

  • Total Debt: $2.87 billion as of Q4 2023
  • Interest Expense: $94 million annually
  • Debt-to-Equity Ratio: 1.45

Operational Risks

Key operational challenges include:

  • Supply Chain Disruptions
  • Labor Market Constraints
  • Technology Infrastructure Vulnerabilities

Regulatory and Compliance Risks

Regulatory Area Potential Risk Estimated Financial Impact
Environmental Regulations Compliance Costs $15-20 million annually
Data Privacy Laws Potential Penalties Up to $5 million per violation

Strategic Risk Mitigation

Mitigation strategies include:

  • Diversification of Revenue Streams
  • Digital Transformation Investments
  • Cost Management Initiatives



Future Growth Prospects for Wyndham Hotels & Resorts, Inc. (WH)

Growth Opportunities

The company's growth strategy focuses on several key areas with concrete financial and market expansion metrics:

Growth Metric Current Value Projected Growth
Total Hotel Rooms 9,453 10-12% annual expansion
Franchise Portfolio 9,091 properties 5-7% annual increase
International Presence 95 countries 15 new markets targeted

Strategic growth initiatives include:

  • Targeted expansion in emerging markets
  • Development of mid-scale and economy hotel segments
  • Digital platform enhancement for booking efficiency

Key growth drivers demonstrate robust potential:

  • Revenue per available room (RevPAR): $65.23
  • Projected revenue growth: 8-10% annually
  • New franchise agreements: $1.2 billion pipeline
Market Segment Current Market Share Growth Potential
Economy Hotels 42% 6-8% expansion potential
Extended Stay 22% 12-15% growth projection

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