Hyatt Hotels (H)

Hospitality company Hyatt Hotels (NYSE:H) fell short of the markets revenue expectations in Q3 CY2025, but sales rose 9.6% year on year to $1.79 billion. Its non-GAAP loss of $0.30 per share was significantly below analysts’ consensus estimates.

Company Overview

Founded in 1957, Hyatt Hotels (NYSE:H) is a global hospitality company with a portfolio of 20 premier brands and over 950 properties across 65 countries.

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.

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

A company’s long-term sales performance can indicate its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Over the last five years, Hyatt Hotels grew its sales at a solid 18.8% compounded annual growth rate. Its growth beat the average consumer discretionary company and shows its offerings resonate with customers.

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. Hyatt Hotels’s recent performance shows its demand has slowed as its annualized revenue growth of 2.4% over the last two years was below its five-year trend.

Hyatt Hotels also reports revenue per available room, which clocked in at $146.24 this quarter and is a key metric accounting for daily rates and occupancy levels. Over the last two years, Hyatt Hotels’s revenue per room averaged 2.1% year-on-year growth. This number doesn’t surprise us as it’s in line with its revenue growth.

This quarter, Hyatt Hotels’s revenue grew by 9.6% year on year to $1.79 billion, missing Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 8.2% over the next 12 months. Although this projection implies its newer products and services will catalyze better top-line performance, it is still below the sector average.

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.

Hyatt Hotels’s operating margin might fluctuated slightly over the last 12 months but has generally stayed the same, averaging 4.8% over the last two years. This profitability was lousy for a consumer discretionary business and caused by its suboptimal cost structure.

This quarter, Hyatt Hotels generated an operating margin profit margin of 5.5%, 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.

Hyatt Hotels’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 Q3, Hyatt Hotels reported adjusted EPS of negative $0.30, down from $0.94 in the same quarter last year. This print 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 Hyatt Hotels’s full-year EPS of $1.26 to grow 179%.

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

Hyatt Hotels has shown weak cash profitability over the last two years, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 6.6%, subpar 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).

Hyatt Hotels’s five-year average ROIC was negative 1.6%, meaning management lost money while trying to expand the business. Its returns were among the worst in the consumer discretionary sector.

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. Over the last few years, Hyatt Hotels’s ROIC has increased. This is a good sign, but we recognize its lack of profitable growth during the COVID era was the primary reason for the change.

Hyatt Hotels reported $749 million of cash and $6.01 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 $1.12 billion of EBITDA over the last 12 months, we view Hyatt Hotels’s 4.7× net-debt-to-EBITDA ratio as safe. We also see its $171 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 Hyatt Hotels beat analysts’ EBITDA expectations this quarter. On the other hand, its EPS missed and its full-year EBITDA guidance fell short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded up 3.7% to $143 immediately after reporting.

Updated: December 4, 2025 at 10:02 PM EST

Are you wondering whether to buy Hyatt Hotels or pass? We urge investors to not only consider the latest earnings results but also longer-term business quality and valuation as well.

We cheer for all companies serving everyday consumers, but in the case of Hyatt Hotels, we’ll be cheering from the sidelines. To kick things off, 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 projected EPS for the next year implies the company’s fundamentals will improve, the downside is its revenue per room has disappointed. On top of that, its relatively low ROIC suggests management has struggled to find compelling investment opportunities.

Hyatt Hotels’s P/E ratio based on the next 12 months is 50.1x. This multiple tells us a lot of good news is priced in - we think there are better stocks to buy right now.

Wall Street analysts have a consensus one-year price target of $167.57 on the company (compared to the current share price of $154.33).