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Choice Hotels International, Inc. (CHH)
Intrinsic Value (DCF)
Current$109.10
→
Intrinsic$31.23
-71%
$8.98$31.23$73.51
Market implies 29% growth for 5 years
Current price reflects execution expectations above 9% growth — not unreasonable for quality businesses.
At $109, the market prices in continued strong cash flow growth (29%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $9 → Bull $74. Current price implies expectations above the base case, closer to bull expectations.
| Discount ↓Growth → | 5% | 7% | 9% | 11% |
|---|---|---|---|---|
| 8% | $45 | $52 | $60 | $69 |
| 10% | $20 | $26 | $31 | $37 |
| 12% | $7 | $11 | $15 | $20 |
| 14% | $0 | $2 | $5 | $8 |
Bull Case
- Bull case ($74) with 11% growth, 9% discount rate
- Conservative 9% growth assumption is achievable based on track record
Bear Case
- Bear case ($9) implies 92% downside at 7% growth, 12% discount
- Price reflects 29% growth expectations vs 9% historical — high bar to clear
- Trading 71% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection
Year 1$189.64M
Year 2$207.22M
Year 3$226.43M
Year 4$247.42M
Year 5$270.36M
Terminal$3.98B
📐 Model Inputs
Growth Rate9.3%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$173.55MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.