Since March 2025, Hilton has been in a holding pattern, posting a small return of 4.7% while floating around $276.06. The stock also fell short of the S&P 500’s 10.5% gain during that period.
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Why Is Hilton Not Exciting?
We're swiping left on Hilton for now. Here are three reasons why HLT doesn't excite us and a stock we'd rather own.
1. Long-Term Revenue Growth Disappoints
Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Hilton grew its sales at a tepid 9.6% compounded annual growth rate. This was below our standard for the consumer discretionary sector.
2. Weak RevPAR Growth Points to Soft Demand
In addition to reported revenue, RevPAR (revenue per available room) is a useful data point for analyzing Travel and Vacation Providers companies. This metric accounts for daily rates and occupancy levels, painting a holistic picture of Hilton’s demand characteristics.
Hilton’s RevPAR came in at $121.79 in the latest quarter, and over the last two years, its year-on-year growth averaged 1.8%. This performance was underwhelming and suggests it might have to invest in new amenities such as restaurants and bars to attract customers - this isn’t ideal because expansions can complicate operations and be quite expensive (i.e., renovations and increased overhead). 
3. Projected Revenue Growth Is Slim
Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.
Over the next 12 months, sell-side analysts expect Hilton’s revenue to rise by 7.2%, close to its 9.6% annualized growth for the past five years. This projection doesn't excite us and implies its newer products and services will not lead to better top-line performance yet.
Final Judgment
Hilton’s business quality ultimately falls short of our standards. With its shares underperforming the market lately, the stock trades at 33.1× forward P/E (or $276.06 per share). Beauty is in the eye of the beholder, but we don’t really see a big opportunity at the moment. We're pretty confident there are superior stocks to buy right now. Let us point you toward the most dominant software business in the world.
Stocks We Would Buy Instead of Hilton
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