Marriott (MAR)

Global hospitality company Marriott (NASDAQ:MAR) met Wall Street’s revenue expectations in Q4 CY2025, with sales up 4.1% year on year to $6.69 billion. Its non-GAAP profit of $2.58 per share was 1.5% below analysts’ consensus estimates.

Company Overview

Founded by J. Willard Marriott in 1927, Marriott International (NASDAQ:MAR) is a global hospitality company with a portfolio of over 7,000 properties and 30 brands, spanning 130+ countries and territories.

Airlines, hotels, resorts, and cruise line companies often sell experiences rather than tangible products, and in the last decade-plus, consumers have slowly shifted from buying "things" (wasteful) to buying "experiences" (memorable). In addition, the internet has introduced new ways of approaching leisure and lodging such as booking homes and longer-term accommodations. Traditional airlines, hotel, resorts, and cruise line companies must innovate to stay relevant in a market rife with innovation.

Marriott International's primary competitors include Hilton Worldwide (NYSE:HLT), InterContinental Hotels Group (NYSE:IHG), Hyatt Hotels (NYSE:H), Wyndham Hotels & Resorts (NYSE:WH), and Accor (EPA:AC).

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Marriott grew its sales at a 19.9% compounded annual growth rate. Although this growth is acceptable on an absolute basis, it fell slightly short of our standards for the consumer discretionary sector, which enjoys a number of secular tailwinds.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new property or trend. Marriott’s recent performance shows its demand has slowed as its annualized revenue growth of 5.1% over the last two years was below its five-year trend.

Marriott also reports revenue per available room, which clocked in at $182.43 this quarter and is a key metric accounting for daily rates and occupancy levels. Over the last two years, Marriott’s revenue per room averaged 6.2% year-on-year growth. This number doesn’t surprise us as it’s in line with its revenue growth.

This quarter, Marriott grew its revenue by 4.1% year on year, and its $6.69 billion of revenue was in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 5.5% over the next 12 months, similar to its two-year rate. This projection is underwhelming and implies its newer products and services will not catalyze better top-line performance yet.

Operating margin is a key measure of profitability. Think of it as net income - the bottom line - excluding the impact of taxes and interest on debt, which are less connected to business fundamentals.

Marriott’s operating margin might fluctuated slightly over the last 12 months but has generally stayed the same, averaging 15.4% over the last two years. This profitability was inadequate for a consumer discretionary business and caused by its suboptimal cost structure.

This quarter, Marriott generated an operating margin profit margin of 11.6%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Marriott’s full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it’s at a critical moment in its life.

In Q4, Marriott reported adjusted EPS of $2.58, up from $2.45 in the same quarter last year. Despite growing year on year, this print slightly missed analysts’ estimates, but we care more about long-term adjusted EPS growth than short-term movements. Over the next 12 months, Wall Street expects Marriott’s full-year EPS of $10.02 to grow 13.6%.

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

Marriott has shown poor cash profitability over the last two years, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 8.9%, lousy for a consumer discretionary business.

EPS and free cash flow tell us whether a company was profitable while growing its revenue. But was it capital-efficient? Enter ROIC, a metric showing how much operating profit a company generates relative to the money it has raised (debt and equity).

Marriott historically did a mediocre job investing in profitable growth initiatives. Its five-year average ROIC was 29.1%, somewhat low compared to the best consumer discretionary companies that consistently pump out 25%+.

We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Marriott’s ROIC has increased over the last few years. This is a good sign, and we hope the company can continue improving.

Marriott reported $400 million of cash and $16.2 billion of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $5.38 billion of EBITDA over the last 12 months, we view Marriott’s 2.9× net-debt-to-EBITDA ratio as safe. We also see its $767 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

It was encouraging to see Marriott’s full-year EBITDA guidance beat analysts’ expectations. We were also glad its EBITDA guidance for next quarter slightly exceeded Wall Street’s estimates. On the other hand, its EPS missed. Zooming out, we think this was a mixed quarter. The stock traded up 3.4% to $342.47 immediately after reporting.

Updated: February 10, 2026 at 7:48 AM EST

We think that the latest earnings result is only one piece of the bigger puzzle. If you’re deciding whether to own Marriott, you should also grasp the company’s longer-term business quality and valuation.

We see the value of companies helping consumers, but in the case of Marriott, we’re out. For starters, its revenue growth was weak over the last five years, and analysts expect its demand to deteriorate over the next 12 months. And while its astounding EPS growth over the last five years shows its profits are trickling down to shareholders, the downside is its revenue per room has disappointed. On top of that, its low free cash flow margins give it little breathing room.

Marriott’s P/E ratio based on the next 12 months is 29.1x. At this valuation, there’s a lot of good news priced in - you can find more timely opportunities elsewhere.

Wall Street analysts have a consensus one-year price target of $321.48 on the company (compared to the current share price of $342.47), implying they don’t see much short-term potential in Marriott.