It has been about a month since the last earnings report for Wyndham Worldwide Corp. . Shares have added about 3.3% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Wyndham Beats on Q1 Earnings, Lags Sales Marginally
Wyndham posted mixed results for the first quarter of 2017, wherein earnings beat the Zacks Consensus Estimate while revenues marginally missed the same.
Earnings and Revenue Discussion
Adjusted earnings of $1.14 per share beat the Zacks Consensus Estimate of $1.11 by 2.7%. Also, earnings were up 1.8% year over year on the back of its share repurchase program.
Additionally, net revenues of $1.32 billion improved 1% year over year on the back of increased contribution from all of its segments. However, revenues slightly missed the Zacks Consensus Estimate of $1.33 billion by nearly 1%.
Inside the Headline Numbers
Adjusted EBITDA (excluding share-based compensation expenses) decreased 4.5% year over year to $278 million.
Wyndham has been operating through its three operating segments: Hotel Group, Destination Network (formerly known as Vacation Exchange and Rentals) and Vacation Ownership.
Hotel Group revenues were $298 million, up 1% from the year-ago figure, which reflected higher franchise fees as well as growth in the company's Wyndham Rewards credit card program. The rise was partially offset by lower occupancy in Puerto Rico due to consumer concerns about the Zika virus.
Domestic same store RevPAR inched up 1.7%. At constant currency, total system-wide same store RevPAR increased 2.2% year over year.
Adjusted EBITDA increased 1% to $85 million. On a currency-neutral basis adjusted EBITDA grew 2%.
Revenues at Destination Network were $391 million, an increase of 1.6% from the year-ago figure. Meanwhile, at constant currency and excluding acquisitions, revenues recorded an improvement of 1%.
Exchange revenues inched up 0.6% to $183 million. The figure grew 0.8% at constant currency, as the exchange revenue per member rose 0.8% and average number of members declined 0.6%.
Vacation rental revenues were $184 million, reflecting 0.6% year-over-year growth. Likewise, at constant currency and excluding acquisitions, vacation rental revenues increased 1% driven by a 2.8% increase in transaction volumes, partially offset by a 2.0% decline in the average net price per rental.
Adjusted EBITDA decreased 2.9% to $102 million, reflecting the absence of a benefit of $3 million from business disruption claims received in the first quarter of 2016, as well as the unfavorable impact of the timing of the Easter holiday.
Revenues at Vacation Ownership increased 1.1% year over year to $648 million.
Gross VOI sales in the first quarter remained increased 3% year over year. Meanwhile, volume per guest (VPG) was up 4.9%,but tour flow declined 1.7% in the quarter. These results reflect closure of sales offices as part of a restructuring in the second half of last year.
Adjusted EBITDA decreased 8.8% to $124 million.
2017 Guidance
For 2017, the company projects adjusted net income in a range of $631 million to $652 million, lower than its previous expectation of a range of $637 to $658 million. Additionally, adjusted earnings per share are anticipated in a band of $5.98 to $6.18, higher than the previously expected range of $5.90 to $6.10 per share. The upside in expectation reflects a lower share count due share due to possible share repurchases. The Zacks Consensus Estimate for 2017 earnings is currently pegged at $6.21 per share.
Wyndham continues to expect full-year revenues to roughly come in the range of $5.80–$5.95 billion. Adjusted EBITDA is still projected to be approximately in a band of $1.41 billion to $1.44 billion.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one downward revision for the current quarter.
VGM Scores
At this time, Wyndham's stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of these revisions indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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Wyndham (WYN) Up 3.3% Since Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Wyndham Worldwide Corp. . Shares have added about 3.3% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock’s next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Wyndham Beats on Q1 Earnings, Lags Sales Marginally
Wyndham posted mixed results for the first quarter of 2017, wherein earnings beat the Zacks Consensus Estimate while revenues marginally missed the same.
Earnings and Revenue Discussion
Adjusted earnings of $1.14 per share beat the Zacks Consensus Estimate of $1.11 by 2.7%. Also, earnings were up 1.8% year over year on the back of its share repurchase program.
Additionally, net revenues of $1.32 billion improved 1% year over year on the back of increased contribution from all of its segments. However, revenues slightly missed the Zacks Consensus Estimate of $1.33 billion by nearly 1%.
Inside the Headline Numbers
Adjusted EBITDA (excluding share-based compensation expenses) decreased 4.5% year over year to $278 million.
Wyndham has been operating through its three operating segments: Hotel Group, Destination Network (formerly known as Vacation Exchange and Rentals) and Vacation Ownership.
Hotel Group revenues were $298 million, up 1% from the year-ago figure, which reflected higher franchise fees as well as growth in the company's Wyndham Rewards credit card program. The rise was partially offset by lower occupancy in Puerto Rico due to consumer concerns about the Zika virus.
Domestic same store RevPAR inched up 1.7%. At constant currency, total system-wide same store RevPAR increased 2.2% year over year.
Adjusted EBITDA increased 1% to $85 million. On a currency-neutral basis adjusted EBITDA grew 2%.
Revenues at Destination Network were $391 million, an increase of 1.6% from the year-ago figure. Meanwhile, at constant currency and excluding acquisitions, revenues recorded an improvement of 1%.
Exchange revenues inched up 0.6% to $183 million. The figure grew 0.8% at constant currency, as the exchange revenue per member rose 0.8% and average number of members declined 0.6%.
Vacation rental revenues were $184 million, reflecting 0.6% year-over-year growth. Likewise, at constant currency and excluding acquisitions, vacation rental revenues increased 1% driven by a 2.8% increase in transaction volumes, partially offset by a 2.0% decline in the average net price per rental.
Adjusted EBITDA decreased 2.9% to $102 million, reflecting the absence of a benefit of $3 million from business disruption claims received in the first quarter of 2016, as well as the unfavorable impact of the timing of the Easter holiday.
Revenues at Vacation Ownership increased 1.1% year over year to $648 million.
Gross VOI sales in the first quarter remained increased 3% year over year. Meanwhile, volume per guest (VPG) was up 4.9%,but tour flow declined 1.7% in the quarter. These results reflect closure of sales offices as part of a restructuring in the second half of last year.
Adjusted EBITDA decreased 8.8% to $124 million.
2017 Guidance
For 2017, the company projects adjusted net income in a range of $631 million to $652 million, lower than its previous expectation of a range of $637 to $658 million. Additionally, adjusted earnings per share are anticipated in a band of $5.98 to $6.18, higher than the previously expected range of $5.90 to $6.10 per share. The upside in expectation reflects a lower share count due share due to possible share repurchases. The Zacks Consensus Estimate for 2017 earnings is currently pegged at $6.21 per share.
Wyndham continues to expect full-year revenues to roughly come in the range of $5.80–$5.95 billion. Adjusted EBITDA is still projected to be approximately in a band of $1.41 billion to $1.44 billion.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one downward revision for the current quarter.
Wyndham Worldwide Corp Price and Consensus
Wyndham Worldwide Corp Price and Consensus | Wyndham Worldwide Corp Quote
VGM Scores
At this time, Wyndham's stock has an average Growth Score of 'C', though it is lagging a lot on the momentum front with an 'F'. However, the stock was allocated a grade of 'B' on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate that the stock is more suitable for value investors than growth investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of these revisions indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.