Value
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.7 |
| P/S | 7.7 |
| EV/EBITDA | 3.2 |
| Fwd P/E | 8.4 |
| PEG | 9.9 |
| Analyst target | 7.5 |
- ▸Forward P/E: 13.9x
- ▸PEG: 0.51
- ▸Attractively valued
WH · Why this verdict
Why Wyndham Hotels & Resorts (WH) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score5.6/10
ConfidenceHIGH
MacroRISK_OFF
TrendMatrix Research · core thesis
Engine thesis — one sentence
Wyndham Hotels & Resorts is a high-quality hotel franchise operator with 38% return on equity, 176% free cash flow conversion, and 23% analyst-projected upside, but 3 consecutive earnings misses, heavy financial leverage, and an asymmetry ratio below the minimum entry threshold make this a hold-not-buy situation.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Wyndham converts 176% of net income into free cash flow and generates a 38% return on equity with a Piotroski score of 7 out of 9 — characteristics of a high-quality, asset-light franchise business that compunds capital efficiently. Quality breakdown | Free cash flow as a percentage of net income remains above 100% for the next 2 reported annual periods, and return on equity stays above 25%. | →Stable |
| CounterThe franchise model produces high apparent returns partly due to significant financial leverage at a debt-to-equity of 5.9; the high returns on equity reflect a highly leveraged balance sheet rather than purely operational quality. | ||
Wyndham has missed earnings in 3 of the last 4 quarters, including a deeply negative -198% surprise in February 2026 driven by a reported EPS of -$0.80 against expectations of +$0.81 — raising concerns about whether the reported business fundamentals match the franchise quality narrative. Earnings | Earnings beat rate returns to at least 3 of the next 4 quarters with positive surprises averaging above 5% to re-establish confidence in earnings predictability. | ↑Improving |
| CounterThe February miss was an outlier of extraordinary magnitude that likely reflects a non-recurring charge; the most recent quarter's miss was minor at -1.65%, suggesting the underlying run-rate may be stabilizing. | ||
A debt-to-equity ratio of 5.9 earns the maximum leverage penalty in the risk model, meaning the equity cushion is thin relative to total debt — any revenue weakness from a hotel industry downturn could disproportionately affect equity value. Bear case | Debt-to-equity ratio declines below 4.0 within 24 months through free cash flow paydown or equity issuance, reducing the leverage penalty from maximum to moderate. | ↓Deteriorating |
| CounterAsset-light franchise businesses like Wyndham can sustain higher leverage ratios than asset-heavy businesses because revenue streams are more contractual and less capital-intensive; the leverage level may be appropriate for the business model. | ||
With analyst consensus projecting 23% upside to $90.16 and an asymmetry ratio of 1.22, the market has not yet priced in what analysts expect to be a meaningful recovery — assuming the earnings miss streak reverses. Targets | Price rises above $88, more than 8% above the current $81.35, within 12 months as the earnings miss streak ends and investors re-rate to analyst consensus targets. | ↑Improving |
| CounterThe asymmetry ratio of 1.22 falls below the 1.5 minimum required for new entry; until the reward-to-risk ratio improves and the earnings track record stabilizes, the analyst upside projection may represent wishful thinking. | ||
Wyndham converts 176% of net income into free cash flow and generates a 38% return on equity with a Piotroski score of 7 out of 9 — characteristics of a high-quality, asset-light franchise business that compunds capital efficiently.
→StableQuality breakdown
- Expectation
- Free cash flow as a percentage of net income remains above 100% for the next 2 reported annual periods, and return on equity stays above 25%.
CounterThe franchise model produces high apparent returns partly due to significant financial leverage at a debt-to-equity of 5.9; the high returns on equity reflect a highly leveraged balance sheet rather than purely operational quality.
Wyndham has missed earnings in 3 of the last 4 quarters, including a deeply negative -198% surprise in February 2026 driven by a reported EPS of -$0.80 against expectations of +$0.81 — raising concerns about whether the reported business fundamentals match the franchise quality narrative.
↑ImprovingEarnings
- Expectation
- Earnings beat rate returns to at least 3 of the next 4 quarters with positive surprises averaging above 5% to re-establish confidence in earnings predictability.
CounterThe February miss was an outlier of extraordinary magnitude that likely reflects a non-recurring charge; the most recent quarter's miss was minor at -1.65%, suggesting the underlying run-rate may be stabilizing.
A debt-to-equity ratio of 5.9 earns the maximum leverage penalty in the risk model, meaning the equity cushion is thin relative to total debt — any revenue weakness from a hotel industry downturn could disproportionately affect equity value.
↓DeterioratingBear case
- Expectation
- Debt-to-equity ratio declines below 4.0 within 24 months through free cash flow paydown or equity issuance, reducing the leverage penalty from maximum to moderate.
CounterAsset-light franchise businesses like Wyndham can sustain higher leverage ratios than asset-heavy businesses because revenue streams are more contractual and less capital-intensive; the leverage level may be appropriate for the business model.
With analyst consensus projecting 23% upside to $90.16 and an asymmetry ratio of 1.22, the market has not yet priced in what analysts expect to be a meaningful recovery — assuming the earnings miss streak reverses.
↑ImprovingTargets
- Expectation
- Price rises above $88, more than 8% above the current $81.35, within 12 months as the earnings miss streak ends and investors re-rate to analyst consensus targets.
CounterThe asymmetry ratio of 1.22 falls below the 1.5 minimum required for new entry; until the reward-to-risk ratio improves and the earnings track record stabilizes, the analyst upside projection may represent wishful thinking.
Per-dimension breakdown
Quality
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 5.0 |
| Gross margin | 8.4 |
| Op margin | 10.0 |
| Net margin | 7.0 |
| Current ratio | 4.0 |
| FCF quality | 10.0 |
| Moat | 6.9 |
| Piotroski F | 6.7 |
- ▸Excellent ROE: 38%
- ▸Excellent cash conversion: 188% FCF/NI
- ▸High-quality business
Growth
3.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.3 |
| EPS growth | 1.6 |
Momentum
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 0.2 |
| OBV | 10.0 |
| MA position | 6.5 |
| Volume | 2.1 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope flat
Sentiment
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.1 |
| Analyst rating | 7.4 |
| Price target | 8.5 |
- ▸Analyst upside: 29%
Insider
4.8/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| holder change | 5.0 |
| notable moves | 5.0 |
- ▸Modest insider selling — $1,411,576 (0.026% of mkt cap)
Peer rank
4.2/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.5 |
| quality rank | 4.2 |
| growth rank | 5.0 |
Technical
5.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.3 |
| support resistance | 5.8 |
| 52w position | 6.7 |
Risk (lower is worse)
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 3.6 |
| days to cover | 3.4 |
| volatility | 4.6 |
| put call | 0.0 |
| implied vol | 6.4 |
| max pain risk | 7.0 |
| beta | 8.9 |
| debt equity | 0.0 |
| news risk | 5.5 |
- ▸Elevated put/call: 3.43
Catalyst
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 6.2 |
| dividend safety | 7.0 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (7)
- MOMENTUM:4.7>=4.5
- ASYMMETRY:2.5>=1.5
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:111d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- DEATH_CROSS:HARD_BLOCK
Warning (1)
- MOMENTUM:4.7<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
2.49
Upside
+15.7%
Downside
6.3%
Sizing output
AVOID
SetupRange Bound — RSI 53 mid-range, Bollinger mid-band
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 2.8 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Quality at 7.6) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( DEATH_CROSS:HARD_BLOCK) reinforce the read. Current asymmetry R:R is 2.49 — supplementary context, not the trigger for this path.
The strongest dimensions are Quality at 7.6, Value at 7.2, and Sentiment at 7.0; the weakest are Growth at 3.0, Peer rank at 4.2, and Risk (lower is worse) at 4.4. The V9 engine flagged 1 failed gate with 1 warning, producing an asymmetric reward-to-risk of 2.49 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1High Quality Franchise Cash Machine
Trip ifFree cash flow as a percentage of net income falls below 50% for at least 2 consecutive reported annual periods.
- P2Three Consecutive Earnings Misses
Trip ifEarnings miss rate remains at 3 or more of the next 4 quarters, with any single miss exceeding -50% surprise.
- P3Heavy Leverage Risk
Trip ifDebt-to-equity ratio rises above 7.0 or interest coverage falls below 2x in any reported quarter.
- P4Analyst Upside Not Yet Realized
Trip ifAnalyst consensus price target falls below $75, more than 8% below the current $81.35.