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H World Group (NasdaqGS:HTHT) Valuation in Focus After Q2 Earnings Jump and Dividend Hike

Simply Wall St · 4d ago

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If you are weighing your next move with H World Group (NasdaqGS:HTHT), this week’s events should not go unnoticed. The company’s stock jumped 5% after releasing second-quarter results that showed not only solid revenue and net income growth, but also operational momentum in its manachised and franchised hotel segments. Management’s optimism was backed up with a dividend hike and guidance for further top-line improvements in the third quarter. This suggests the business is keen to reward shareholders while building on its network expansion. Zooming out, H World Group’s shares have gained over 28% in the past year, outpacing many global hospitality peers. While the short-term moves have been mostly positive, the stock has seen flat performance over the past three months after rallying earlier in the year. Besides its latest results, the company has been active with executive appointments and ongoing asset-light expansion. It now plans to host its inaugural Capital Markets Day in October, signaling ambition beyond the day-to-day numbers. The big question for investors now is whether the recent market enthusiasm accurately reflects H World Group’s future prospects or if there is more value waiting to be unlocked. Is this a buying opportunity, or is the growth already in the price?

Most Popular Narrative: 16.4% Undervalued

According to community narrative, H World Group is currently seen as notably undervalued relative to its projected growth and operational improvements. The valuation estimate applies a discount rate specific to prevailing company and market conditions.

The ongoing expansion into lower-tier cities and network growth, despite short-term RevPAR pressure and a challenging macro backdrop, positions H World Group to capitalize on rising domestic travel fueled by urbanization and an expanding middle class. This supports robust top-line revenue growth as the economic environment normalizes.

Curious about what is fueling this bullish outlook? The underlying narrative hints at ambitious expansion plans and margin advances that could redefine expectations for future earnings, revenue, and market positioning. Want to uncover the crucial financial forecasts and industry trends justifying the projected fair value? Explore further to see what assumptions are shaping analyst consensus for H World Group’s worth.

Result: Fair Value of $43.37 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent RevPAR weakness and the risk of overexpansion into lower-tier markets could dampen earnings growth and present challenges to the bullish outlook.

Find out about the key risks to this H World Group narrative.

Another View: DCF Model Offers a Different Take

While the earlier view highlights the company's value based on future growth, the SWS DCF model presents a more cautious perspective. It suggests the shares might be priced above their calculated fair value. Which approach reflects reality?

Look into how the SWS DCF model arrives at its fair value.

HTHT Discounted Cash Flow as at Aug 2025

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out H World Group for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own H World Group Narrative

If you feel differently or want to interpret the evidence for yourself, you have the tools to shape your own view of H World Group in just a few minutes. do it your way.

A great starting point for your H World Group research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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Disclaimer:This article represents the opinion of the author only. It does not represent the opinion of Webull, nor should it be viewed as an indication that Webull either agrees with or confirms the truthfulness or accuracy of the information. It should not be considered as investment advice from Webull or anyone else, nor should it be used as the basis of any investment decision.

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