H World Group Limited (HTHT)
Valuation Overview•Is H World Group Limited Overvalued or Undervalued?
Trading at a discount across both intrinsic cash flow and relative peer multiples, indicating a strong margin of safety.
Moderate quality score of 69/100, reflecting stable operating margins and manageable leverage.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
Verdict: Solid fundamental quality, though solvency presents a headwind.
Wall Street is highly bullish, projecting significant upside alongside robust expected earnings growth. This is paired with healthy capital returns, anchored by a strong, well-covered dividend yield.
HTHT demonstrates strong business quality with robust profitability and healthy margins. However, the balance sheet carries elevated leverage, requiring careful monitoring of debt servicing capabilities.
The company is driving exceptional top-line expansion (21.1% 3Y CAGR) paired with stable bottom-line earnings. This growth is supported by elite operational efficiency, sustaining an impressive 27.1% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $6.0B | +3.0% | +21.1% | +19.3% | +15.6% | |
| EBITDA | $1.8B | — | +85.5% | — | — | |
| Net Income | $812.1M | +62.1% | — | — | +27.5% | |
| EPS (Diluted) | $2.50 | +58.3% | — | — | +24.5% | |
| Free Cash Flow | $50.7M | +9.0% | +143.0% | — | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 40.5% | 38.4% | 27.7% | 27.0% |
| Operating Margin | 27.1% | 22.9% | 13.6% | 12.4% |
| Net Margin | 19.3% | 17.2% | 7.0% | 6.4% |
| FCF Margin | 27.8% | 29.6% | 18.0% | 15.6% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $0.46 | $0.49 | +6.5% | ||
| Q1'26 | $0.41 | $0.58 | +41.5% | ||
| Q4'25 | $0.64 | $0.67 | +4.7% | ||
| Q3'25 | $0.56 | $0.59 | +5.4% | ||
| Q2'25 | $0.42 | $0.34 | -19.0% | ||
| Q1'25 | $0.27 | $0.14 | -48.1% | ||
| Q4'24 | $0.69 | $0.61 | -11.6% | ||
| Q3'24 | $0.52 | $0.46 | -11.5% |
Total return is +37.8% (1Y), outperforming the benchmark by +12.8%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | -6.0% | -15.3% | — |
| 1Y | +37.8% | +12.8% | +10.2% |
| 3YCAGR | +6.0% | -12.7% | +14.6% |
| 5YCAGR | -2.3% | -13.9% | +11.3% |
| 10YCAGR | +19.4% | +6.3% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about H World Group Limited (HTHT) valuation, health, and returns.
H World Group Limited is estimated to be undervalued under our discounted cash flow framework. relative multiples indicate the stock is Cheap versus peers compared to industry peers. undervalued (implying +123.2% upside to DCF intrinsic value of $94.87)
H World Group Limited has multiple valuation anchors: DCF Intrinsic Value: $94.87 | Peer Relative Fair Value: $663.63 | Wall Street Analyst Target: $62.40 (implying +46.8% upside). A convergence of these signals offers higher conviction.
H World Group Limited displays good financial health with a composite quality score of 69/100, supported by a Altman Z-Score of 0.3 (distress zone), Piotroski F-Score of 6/9, Return on Invested Capital (ROIC) of 11.9%.
H World Group Limited pays a 4.1% dividend yield, covered by a 77% payout ratio with 1 years of growth, supplemented by a 0.9% buyback yield.
H World Group Limited's current growth trajectory is Decelerating. The company achieved +3.0% 1Y revenue growth and +58.3% 1Y EPS growth, compared to its 3Y revenue CAGR of +21.1%.
Wall Street consensus is Buy based on 19 analysts, beating EPS expectations in 58% of recent quarters with a 4-quarter streak. The consensus price target represents a +46.8% change from current levels.
Investment risks for H World Group Limited include: -24.2% 1-year max drawdown, elevated distress risk. Volatility risk is characterized by a beta of 0.40x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.