Wyndham Hotels & Resorts, Inc. (WH) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Wyndham Hotels & Resorts, Inc. (WH)

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Intrinsic Value (DCF)

Current$80.46
Intrinsic$58.58
-27%
$30.52$58.58$111.86
Market implies 26% growth for 5 years
WH trades at a premium to our conservative estimate — investors expect above-average performance.
At $80, the market prices in continued strong cash flow growth (26%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $31 → Bull $112. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →16%18%20%22%
8%$78$87$96$107
10%$46$52$59$66
12%$28$33$38$43
14%$17$21$25$29

Bull Case

  • Bull case ($112) offers 39% upside at 24% growth, 9% discount

Bear Case

  • Bear case ($31) implies 62% downside at 16% growth, 12% discount
  • Price reflects 26% growth expectations vs 20% historical — high bar to clear
  • Trading 27% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection

Year 1$289.20M
Year 2$347.04M
Year 3$416.45M
Year 4$499.74M
Year 5$599.69M
Terminal$8.82B

📐 Model Inputs

Growth Rate20.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$241.00MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

Frequently Asked Questions

Is WH stock undervalued or overvalued?
🔴 OVERVALUED

WH trades at $80.46 vs. our DCF-derived intrinsic value of $58.58, implying -27% downside. Using a 10.0% WACC and 20.0% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($103.21) suggests limited upside.

What is WH's intrinsic value?

Using a 5-year DCF model: Base FCF of $241M, projected at 20.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $2.36B net debt and dividing by 0.08B shares: Bear $28.27 | Base $58.58 | Bull $103.21. Current price $80.46 implies -27% to base case.

How is WH's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 20.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($7.06B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.