Hyatt Hotels Corp (H) Stock Analysis
Hyatt Hotels Corp (H) Stock Analysis
Overall Grade: F (Concerning)
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Hyatt Hotels Corp faces challenges in financial performance that warrant careful analysis.
Key Metrics:
| Metric | Value | Context |
|---|---|---|
| ROIC | -48.1% | Below expectations |
| FCF Margin | 2.2% | Cash flow pressure |
| Debt/Equity | 1.3x | Moderate leverage |
Investment Thesis: Financial metrics indicate concerning business quality with areas requiring attention.
What is Hyatt Hotels Corp's Profitability and ROIC?
Hyatt Hotels Corp's return on invested capital of -48.1% is below the typical cost of capital.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Return on Invested Capital (ROIC) | -48.1% | Red flag | Below cost of capital |
| Return on Equity (ROE) | -1.5% | Red flag | Moderate equity returns |
| Operating Margin | 92.2% | Excellent | Efficient operations |
How Strong is Hyatt Hotels Corp's Cash Flow Quality?
Hyatt Hotels Corp generated $159.0M in free cash flow over the trailing twelve months, representing a 2.2% margin. FCF was positive in N/A of the last 8 quarters, indicating variable cash generation.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Free Cash Flow Margin | 2.2% | Warning | Thin cash margins |
| Free Cash Flow (TTM) | $159.0M | Good | Positive cash generation |
| OCF/Net Income | -7.3x | Warning | Potential accrual concerns |
| FCF Consistency (8Q) | N/A | Warning | Variable cash flow |
What is Hyatt Hotels Corp's Financial Health?
Hyatt Hotels Corp's debt-to-equity ratio of 1.3x indicates moderate leverage.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| Debt to Equity | 1.3x | Adequate | Moderate leverage |
| Net Cash Position | $-3.5B | Warning | Net debt position |
Is Hyatt Hotels Corp Stock Overvalued or Undervalued?
Hyatt Hotels Corp trades at a P/E of -291.5x, representing a premium to the sector median of N/A. Free cash flow yield of 1.0% reflects market expectations for growth.
Key Metrics
| Metric | Value | Rating | Interpretation |
|---|---|---|---|
| P/E Ratio | -291.5x | Red flag | Reasonable valuation |
| EV/Sales | 2.7x | Good | Attractive revenue multiple |
| FCF Yield | 1.0% | Warning | Lower cash yield |
| Dividend Yield | 0.4% | Adequate | Growth focus over income |
Sector Rankings
| Metric | Value | Percentile | vs Median |
|---|---|---|---|
| Return on Invested Capital (ROIC) | -48.1% | Top 5% | -7.4x below |
| Free Cash Flow Margin | 2.2% | Bottom 50% | 0.2x below |
| Operating Margin | 92.2% | Top 5% | 14.6x above |
| Return on Equity (ROE) | -1.5% | Bottom 50% | -0.2x below |
Rating Thresholds
Return on Invested Capital (ROIC)
Measures how efficiently a company uses its debt and equity capital to generate profits. ROIC above 15% typically indicates a competitive moat.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 20% | Exceptional capital efficiency, strong competitive moat |
| Good | 12% - 20% | Above-average returns, sustainable competitive position |
| Adequate | 8% - 12% | Around cost of capital, moderate competitive position |
| Warning | 4% - 8% | Below cost of capital, value may be eroding |
| Red flag | < 4% | Significant capital destruction, fundamental issues |
Current: -48.1% (Red flag - Top 5% of sector (median: 6.5%))
Free Cash Flow Margin
The percentage of revenue converted to free cash flow. Higher margins indicate stronger cash generation and business quality.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 20% | Strong cash generation, high-quality business |
| Good | 10% - 20% | Healthy cash conversion |
| Adequate | 5% - 10% | Moderate cash generation |
| Warning | 0% - 5% | Thin cash margins, capital intensive |
| Red flag | < 0% | Cash burn, potential liquidity concerns |
Current: 2.2% (Warning - Bottom 50% of sector (median: 10.0%))
Debt to Equity Ratio
Total debt divided by shareholders' equity. Lower ratios indicate more conservative financing and reduced financial risk.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | < 0.3x | Conservative leverage, strong balance sheet |
| Good | 0.3x - 0.7x | Moderate leverage, healthy financial position |
| Adequate | 0.7x - 1.5x | Elevated leverage, monitor closely |
| Warning | 1.5x - 3.0x | High leverage, increased financial risk |
| Red flag | > 3.0x | Excessive leverage, potential distress risk |
Current: 128.1% (Adequate)
Free Cash Flow Yield
Free cash flow per share divided by stock price. Higher FCF yield indicates better cash return relative to valuation.
| Rating | Range | Interpretation |
|---|---|---|
| Excellent | > 8% | High cash return, potential value opportunity |
| Good | 5% - 8% | Solid cash yield |
| Adequate | 3% - 5% | Moderate cash return |
| Warning | 1% - 3% | Low cash yield, growth expectations |
| Red flag | < 1% | Minimal cash return to shareholders |
Current: 1.0% (Warning)
Frequently Asked Questions
Q: What is Hyatt Hotels Corp's Return on Invested Capital (ROIC)?
Hyatt Hotels Corp (H) has a trailing twelve-month Return on Invested Capital (ROIC) of -48.1%. This compares below the sector median of 6.5%. An ROIC below 8% suggests the company may be destroying shareholder value.
Q: What is Hyatt Hotels Corp's Free Cash Flow Margin?
Hyatt Hotels Corp (H) has a free cash flow margin of 2.2%, generating $159.0 million in free cash flow over the trailing twelve months. A thin FCF margin may indicate heavy reinvestment or operational challenges.
Q: Is Hyatt Hotels Corp stock overvalued or undervalued?
Hyatt Hotels Corp (H) trades at a P/E ratio of -291.5x, which is above the sector median of N/A. The EV/Sales multiple is 2.7x. Free cash flow yield is 1.0%, reflecting growth expectations priced into the stock.
Q: Does Hyatt Hotels Corp pay a dividend?
Hyatt Hotels Corp (H) currently pays a dividend yield of 0.4%. Including share buybacks, the total shareholder yield is 2.3%. The relatively low yield suggests the company prioritizes growth reinvestment over income distribution.
Q: How much debt does Hyatt Hotels Corp have?
Hyatt Hotels Corp (H) has a debt-to-equity ratio of 1.3x with total debt of $4.3 billion. Net debt position is $3.5 billion.
Q: What is Hyatt Hotels Corp's revenue and earnings growth?
Hyatt Hotels Corp (H) grew revenue by 6.8% year-over-year. Modest growth indicates a mature business with stable demand.
Q: Is Hyatt Hotels Corp buying back stock?
Hyatt Hotels Corp (H) repurchased $293.0 million of stock over the trailing twelve months. This represents a buyback yield of 1.9%.
Q: How does Hyatt Hotels Corp compare to competitors in Technology?
Compared to other companies in Technology, Hyatt Hotels Corp (H) shows: ROIC of -48.1% is below the sector median of 6.5% (Top -220%). FCF margin of 2.2% trails the sector median of 10.0% (Bottom 30% of sector). These rankings are based on MetricDuck's analysis of all Technology companies with available SEC filings.
Q: What warning signs should I watch for with Hyatt Hotels Corp?
Investors in Hyatt Hotels Corp (H) should monitor these potential warning signs: 1) FCF margin is thin at 2.2%, leaving limited buffer for economic downturns. 2) ROIC has been declining, potentially signaling deteriorating competitive position. Regular monitoring of SEC filings and quarterly trends is recommended.
Data Source: Data sourced from 10-Q filed 2025-11-06. TTM metrics as of Q4 2025.
Methodology: Financial metrics calculated from SEC 10-K and 10-Q filings using standardized formulas. Sector comparisons use peer group based on SIC code.
This analysis is for informational purposes only and does not constitute investment advice.