Investment Thesis
Wyndham faces severe financial headwinds despite maintaining strong operating margins of 34.9%. The combination of flat revenue growth, net income down 33.2% YoY, extreme leverage (5.93x debt/equity), and deteriorating liquidity (current ratio 0.98x) create significant distress risk. With only 3.4x interest coverage and $2.6B in debt against $447M equity, the capital structure is unsustainable if conditions worsen.
Strengths
- Strong operating margin of 34.9% demonstrates operational efficiency
- Positive free cash flow of $35M provides liquidity buffer
- Decent net profit margin of 18.7% remains respectable in hotel sector
Risks
- Extreme leverage at 5.93x debt-to-equity ratio creates financial distress risk
- Net income collapsed 33.2% YoY despite flat revenue—severe profit margin compression
- Liquidity crisis emerging: current ratio of 0.98x indicates inability to cover short-term obligations
- Weak interest coverage of 3.4x vulnerable to rate increases or operational deterioration
- Revenue stagnation at 0% growth indicates no organic expansion
- Very low ROA of 1.4% suggests asset base is underperforming
Key Metrics to Watch
- Net income trajectory and margin sustainability amid leverage constraints
- Operating cash flow relative to net income—divergence signals earnings quality issues
- Debt refinancing schedule and interest rate exposure
- Current and quick ratios—any further deterioration triggers liquidity stress
Financial Metrics
Revenue
327.0M
Net Income
61.0M
EPS (Diluted)
$0.80
Free Cash Flow
35.0M
Total Assets
4.2B
Cash
79.0M
Profitability Ratios
Gross Margin
N/A
Operating Margin
34.9%
Net Margin
18.7%
ROE
13.6%
ROA
1.4%
FCF Margin
10.7%
Balance Sheet & Liquidity
Current Ratio
0.98x
Quick Ratio
0.98x
Debt/Equity
5.93x
Debt/Assets
89.5%
Interest Coverage
3.35x
Long-term Debt
2.7B
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-05-06T16:43:36.001104 |
Data as of: 2026-03-31 |
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