Intrinsic value of Hilton Worldwide Holdings - HLT

Previous Close

$72.99

  Intrinsic Value

$78.83

stock screener

  Rating & Target

hold

+8%

Previous close

$72.99

 
Intrinsic value

$78.83

 
Up/down potential

+8%

 
Rating

hold

We calculate the intrinsic value of HLT stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 21.8

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  10.40
  9.86
  9.37
  8.94
  8.54
  8.19
  7.87
  7.58
  7.32
  7.09
  6.88
  6.69
  6.53
  6.37
  6.24
  6.11
  6.00
  5.90
  5.81
  5.73
  5.66
  5.59
  5.53
  5.48
  5.43
  5.39
  5.35
  5.31
  5.28
  5.25
Revenue, $m
  10,091
  11,085
  12,125
  13,208
  14,337
  15,511
  16,731
  18,000
  19,318
  20,688
  22,112
  23,593
  25,132
  26,734
  28,401
  30,136
  31,945
  33,830
  35,795
  37,846
  39,987
  42,223
  44,558
  46,999
  49,552
  52,221
  55,015
  57,938
  60,999
  64,204
Variable operating expenses, $m
  7,560
  8,192
  8,852
  9,541
  10,258
  11,004
  11,780
  12,586
  13,424
  14,295
  14,053
  14,994
  15,973
  16,991
  18,050
  19,153
  20,302
  21,500
  22,750
  24,053
  25,414
  26,835
  28,319
  29,870
  31,493
  33,189
  34,965
  36,823
  38,768
  40,805
Fixed operating expenses, $m
  848
  867
  886
  905
  925
  946
  967
  988
  1,010
  1,032
  1,054
  1,078
  1,101
  1,126
  1,150
  1,176
  1,202
  1,228
  1,255
  1,283
  1,311
  1,340
  1,369
  1,399
  1,430
  1,462
  1,494
  1,527
  1,560
  1,594
Total operating expenses, $m
  8,408
  9,059
  9,738
  10,446
  11,183
  11,950
  12,747
  13,574
  14,434
  15,327
  15,107
  16,072
  17,074
  18,117
  19,200
  20,329
  21,504
  22,728
  24,005
  25,336
  26,725
  28,175
  29,688
  31,269
  32,923
  34,651
  36,459
  38,350
  40,328
  42,399
Operating income, $m
  1,683
  2,027
  2,386
  2,762
  3,153
  3,560
  3,984
  4,426
  4,884
  5,361
  7,004
  7,521
  8,058
  8,617
  9,200
  9,807
  10,441
  11,101
  11,791
  12,510
  13,262
  14,048
  14,870
  15,730
  16,629
  17,571
  18,556
  19,589
  20,671
  21,805
EBITDA, $m
  3,053
  3,419
  3,802
  4,201
  4,617
  5,051
  5,502
  5,971
  6,459
  6,967
  7,494
  8,044
  8,615
  9,210
  9,830
  10,475
  11,149
  11,851
  12,584
  13,349
  14,149
  14,984
  15,858
  16,771
  17,727
  18,728
  19,776
  20,873
  22,023
  23,228
Interest expense (income), $m
  478
  409
  490
  575
  663
  756
  852
  951
  1,055
  1,163
  1,275
  1,392
  1,513
  1,639
  1,770
  1,906
  2,048
  2,196
  2,350
  2,510
  2,677
  2,852
  3,034
  3,224
  3,423
  3,631
  3,848
  4,075
  4,313
  4,561
  4,822
Earnings before tax, $m
  1,273
  1,536
  1,811
  2,098
  2,397
  2,709
  3,033
  3,370
  3,721
  4,086
  5,612
  6,007
  6,419
  6,847
  7,294
  7,759
  8,245
  8,751
  9,280
  9,833
  10,411
  11,014
  11,646
  12,307
  12,998
  13,723
  14,481
  15,276
  16,110
  16,983
Tax expense, $m
  344
  415
  489
  567
  647
  731
  819
  910
  1,005
  1,103
  1,515
  1,622
  1,733
  1,849
  1,969
  2,095
  2,226
  2,363
  2,506
  2,655
  2,811
  2,974
  3,144
  3,323
  3,510
  3,705
  3,910
  4,125
  4,350
  4,585
Net income, $m
  930
  1,121
  1,322
  1,532
  1,750
  1,977
  2,214
  2,460
  2,716
  2,983
  4,097
  4,385
  4,686
  4,999
  5,324
  5,664
  6,019
  6,389
  6,775
  7,178
  7,600
  8,040
  8,501
  8,984
  9,489
  10,018
  10,571
  11,152
  11,760
  12,398

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  15,717
  17,267
  18,886
  20,573
  22,331
  24,160
  26,061
  28,037
  30,091
  32,225
  34,443
  36,749
  39,146
  41,641
  44,238
  46,941
  49,758
  52,694
  55,756
  58,950
  62,285
  65,767
  69,405
  73,208
  77,183
  81,342
  85,693
  90,246
  95,014
  100,006
Adjusted assets (=assets-cash), $m
  15,717
  17,267
  18,886
  20,573
  22,331
  24,160
  26,061
  28,037
  30,091
  32,225
  34,443
  36,749
  39,146
  41,641
  44,238
  46,941
  49,758
  52,694
  55,756
  58,950
  62,285
  65,767
  69,405
  73,208
  77,183
  81,342
  85,693
  90,246
  95,014
  100,006
Revenue / Adjusted assets
  0.642
  0.642
  0.642
  0.642
  0.642
  0.642
  0.642
  0.642
  0.642
  0.642
  0.642
  0.642
  0.642
  0.642
  0.642
  0.642
  0.642
  0.642
  0.642
  0.642
  0.642
  0.642
  0.642
  0.642
  0.642
  0.642
  0.642
  0.642
  0.642
  0.642
Average production assets, $m
  6,710
  7,372
  8,063
  8,783
  9,534
  10,314
  11,126
  11,970
  12,847
  13,758
  14,705
  15,689
  16,713
  17,778
  18,886
  20,041
  21,243
  22,497
  23,804
  25,168
  26,591
  28,078
  29,631
  31,255
  32,952
  34,727
  36,585
  38,529
  40,564
  42,696
Working capital, $m
  -1,191
  -1,308
  -1,431
  -1,559
  -1,692
  -1,830
  -1,974
  -2,124
  -2,280
  -2,441
  -2,609
  -2,784
  -2,966
  -3,155
  -3,351
  -3,556
  -3,769
  -3,992
  -4,224
  -4,466
  -4,718
  -4,982
  -5,258
  -5,546
  -5,847
  -6,162
  -6,492
  -6,837
  -7,198
  -7,576
Total debt, $m
  7,909
  9,274
  10,700
  12,187
  13,736
  15,347
  17,022
  18,763
  20,572
  22,452
  24,406
  26,437
  28,550
  30,748
  33,035
  35,417
  37,899
  40,485
  43,183
  45,997
  48,935
  52,003
  55,208
  58,558
  62,061
  65,724
  69,557
  73,569
  77,769
  82,167
Total liabilities, $m
  13,847
  15,212
  16,638
  18,125
  19,674
  21,285
  22,960
  24,701
  26,510
  28,390
  30,344
  32,375
  34,488
  36,686
  38,973
  41,355
  43,837
  46,423
  49,121
  51,935
  54,873
  57,941
  61,146
  64,496
  67,999
  71,662
  75,495
  79,507
  83,707
  88,105
Total equity, $m
  1,870
  2,055
  2,247
  2,448
  2,657
  2,875
  3,101
  3,336
  3,581
  3,835
  4,099
  4,373
  4,658
  4,955
  5,264
  5,586
  5,921
  6,271
  6,635
  7,015
  7,412
  7,826
  8,259
  8,712
  9,185
  9,680
  10,197
  10,739
  11,307
  11,901
Total liabilities and equity, $m
  15,717
  17,267
  18,885
  20,573
  22,331
  24,160
  26,061
  28,037
  30,091
  32,225
  34,443
  36,748
  39,146
  41,641
  44,237
  46,941
  49,758
  52,694
  55,756
  58,950
  62,285
  65,767
  69,405
  73,208
  77,184
  81,342
  85,692
  90,246
  95,014
  100,006
Debt-to-equity ratio
  4.230
  4.510
  4.760
  4.980
  5.170
  5.340
  5.490
  5.620
  5.750
  5.850
  5.950
  6.050
  6.130
  6.210
  6.280
  6.340
  6.400
  6.460
  6.510
  6.560
  6.600
  6.640
  6.680
  6.720
  6.760
  6.790
  6.820
  6.850
  6.880
  6.900
Adjusted equity ratio
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119
  0.119

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  930
  1,121
  1,322
  1,532
  1,750
  1,977
  2,214
  2,460
  2,716
  2,983
  4,097
  4,385
  4,686
  4,999
  5,324
  5,664
  6,019
  6,389
  6,775
  7,178
  7,600
  8,040
  8,501
  8,984
  9,489
  10,018
  10,571
  11,152
  11,760
  12,398
Depreciation, amort., depletion, $m
  1,370
  1,392
  1,415
  1,439
  1,464
  1,490
  1,517
  1,546
  1,575
  1,605
  490
  523
  557
  593
  630
  668
  708
  750
  793
  839
  886
  936
  988
  1,042
  1,098
  1,158
  1,219
  1,284
  1,352
  1,423
Funds from operations, $m
  2,300
  2,514
  2,738
  2,971
  3,214
  3,468
  3,732
  4,006
  4,291
  4,588
  4,587
  4,908
  5,243
  5,591
  5,954
  6,332
  6,727
  7,138
  7,568
  8,017
  8,486
  8,976
  9,489
  10,026
  10,587
  11,175
  11,791
  12,436
  13,112
  13,821
Change in working capital, $m
  -112
  -117
  -123
  -128
  -133
  -139
  -144
  -150
  -156
  -162
  -168
  -175
  -182
  -189
  -197
  -205
  -213
  -222
  -232
  -242
  -253
  -264
  -276
  -288
  -301
  -315
  -330
  -345
  -361
  -378
Cash from operations, $m
  2,412
  2,631
  2,860
  3,099
  3,348
  3,606
  3,876
  4,156
  4,447
  4,750
  4,755
  5,083
  5,424
  5,780
  6,151
  6,537
  6,940
  7,361
  7,800
  8,259
  8,739
  9,240
  9,765
  10,314
  10,888
  11,490
  12,121
  12,781
  13,473
  14,199
Maintenance CAPEX, $m
  -203
  -224
  -246
  -269
  -293
  -318
  -344
  -371
  -399
  -428
  -459
  -490
  -523
  -557
  -593
  -630
  -668
  -708
  -750
  -793
  -839
  -886
  -936
  -988
  -1,042
  -1,098
  -1,158
  -1,219
  -1,284
  -1,352
New CAPEX, $m
  -628
  -662
  -691
  -721
  -750
  -781
  -812
  -844
  -877
  -911
  -947
  -984
  -1,024
  -1,065
  -1,109
  -1,154
  -1,203
  -1,253
  -1,307
  -1,364
  -1,424
  -1,487
  -1,553
  -1,623
  -1,697
  -1,775
  -1,858
  -1,944
  -2,035
  -2,131
Cash from investing activities, $m
  -831
  -886
  -937
  -990
  -1,043
  -1,099
  -1,156
  -1,215
  -1,276
  -1,339
  -1,406
  -1,474
  -1,547
  -1,622
  -1,702
  -1,784
  -1,871
  -1,961
  -2,057
  -2,157
  -2,263
  -2,373
  -2,489
  -2,611
  -2,739
  -2,873
  -3,016
  -3,163
  -3,319
  -3,483
Free cash flow, $m
  1,581
  1,746
  1,923
  2,110
  2,304
  2,508
  2,720
  2,941
  3,171
  3,410
  3,350
  3,608
  3,878
  4,158
  4,450
  4,753
  5,070
  5,399
  5,743
  6,102
  6,476
  6,867
  7,276
  7,703
  8,149
  8,616
  9,105
  9,617
  10,154
  10,715
Issuance/(repayment) of debt, $m
  1,307
  1,365
  1,426
  1,487
  1,548
  1,611
  1,675
  1,741
  1,809
  1,880
  1,954
  2,031
  2,113
  2,198
  2,287
  2,382
  2,482
  2,587
  2,697
  2,814
  2,938
  3,068
  3,205
  3,350
  3,503
  3,664
  3,833
  4,012
  4,200
  4,398
Issuance/(repurchase) of shares, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  1,307
  1,365
  1,426
  1,487
  1,548
  1,611
  1,675
  1,741
  1,809
  1,880
  1,954
  2,031
  2,113
  2,198
  2,287
  2,382
  2,482
  2,587
  2,697
  2,814
  2,938
  3,068
  3,205
  3,350
  3,503
  3,664
  3,833
  4,012
  4,200
  4,398
Total cash flow (excl. dividends), $m
  2,888
  3,111
  3,349
  3,597
  3,853
  4,119
  4,395
  4,682
  4,980
  5,290
  5,304
  5,640
  5,990
  6,356
  6,737
  7,135
  7,551
  7,986
  8,441
  8,916
  9,414
  9,935
  10,481
  11,053
  11,652
  12,280
  12,939
  13,629
  14,354
  15,114
Retained Cash Flow (-), $m
  -182
  -184
  -193
  -201
  -209
  -218
  -226
  -235
  -244
  -254
  -264
  -274
  -285
  -297
  -309
  -322
  -335
  -349
  -364
  -380
  -397
  -414
  -433
  -452
  -473
  -495
  -518
  -542
  -567
  -594
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  2,706
  2,927
  3,157
  3,396
  3,644
  3,901
  4,169
  4,447
  4,736
  5,036
  5,040
  5,366
  5,705
  6,059
  6,428
  6,813
  7,216
  7,637
  8,076
  8,536
  9,017
  9,521
  10,048
  10,600
  11,179
  11,785
  12,421
  13,087
  13,786
  14,520
Discount rate, %
  10.10
  10.61
  11.14
  11.69
  12.28
  12.89
  13.53
  14.21
  14.92
  15.67
  16.45
  17.27
  18.14
  19.05
  20.00
  21.00
  22.05
  23.15
  24.31
  25.52
  26.80
  28.14
  29.55
  31.02
  32.57
  34.20
  35.91
  37.71
  39.59
  41.57
PV of cash for distribution, $m
  2,458
  2,392
  2,300
  2,182
  2,042
  1,885
  1,714
  1,536
  1,354
  1,175
  944
  793
  653
  528
  417
  323
  244
  180
  129
  91
  62
  41
  26
  16
  10
  6
  3
  2
  1
  0
Current shareholders' claim on cash, %
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Hilton Worldwide Holdings Inc. is a hospitality company. The Company is engaged in owning, leasing, managing and franchising hotels and resorts. The Company's segments include ownership, and management and franchise. Its global portfolio of owned and leased properties includes a range of hotels in gateway cities, such as New York City, London, San Francisco, Chicago, Sao Paolo and Tokyo. The Company's management and franchise segment manages hotels and licenses its brands to franchisees. Its brand portfolio includes Hilton Hotels & Resorts, Waldorf Astoria Hotels & Resorts, Conrad Hotels & Resorts, Canopy by Hilton, Curio-A Collection by Hilton, DoubleTree by Hilton, Embassy Suites by Hilton, Hilton Garden Inn, Hampton by Hilton, Tru by Hilton, Homewood Suites by Hilton and Home2 Suites by Hilton. As of December 31, 2016, the Company owned, leased, managed or franchised 4,875 hotel and resort properties, totaling 796,440 rooms in 104 countries and territories.

FINANCIAL RATIOS  of  Hilton Worldwide Holdings (HLT)

Valuation Ratios
P/E Ratio 69.1
Price to Sales 2.1
Price to Book 4.1
Price to Tangible Book
Price to Cash Flow 17.8
Price to Free Cash Flow 26.8
Growth Rates
Sales Growth Rate 3.5%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 10.8%
Cap. Spend. - 3 Yr. Gr. Rate 3.8%
Financial Strength
Quick Ratio 32
Current Ratio 0.6
LT Debt to Equity 111.6%
Total Debt to Equity 112.2%
Interest Coverage 4
Management Effectiveness
Return On Assets 1.9%
Ret/ On Assets - 3 Yr. Avg. 4.3%
Return On Total Capital 2.4%
Ret/ On T. Cap. - 3 Yr. Avg. 5%
Return On Equity 5.9%
Return On Equity - 3 Yr. Avg. 15.6%
Asset Turnover 0.5
Profitability Ratios
Gross Margin 61.9%
Gross Margin - 3 Yr. Avg. 63.4%
EBITDA Margin 20.7%
EBITDA Margin - 3 Yr. Avg. 22.1%
Operating Margin 15.7%
Oper. Margin - 3 Yr. Avg. 16.8%
Pre-Tax Margin 10.8%
Pre-Tax Margin - 3 Yr. Avg. 11.7%
Net Profit Margin 3%
Net Profit Margin - 3 Yr. Avg. 7.3%
Effective Tax Rate 71%
Eff/ Tax Rate - 3 Yr. Avg. 39%
Payout Ratio 79.6%

HLT stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the HLT stock intrinsic value calculation we used $9140 million for the last fiscal year's total revenue generated by Hilton Worldwide Holdings. The default revenue input number comes from 0001 income statement of Hilton Worldwide Holdings. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our HLT stock valuation model: a) initial revenue growth rate of 10.4% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 10.1%, whose default value for HLT is calculated based on our internal credit rating of Hilton Worldwide Holdings, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Hilton Worldwide Holdings.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of HLT stock the variable cost ratio is equal to 76.1%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $830 million in the base year in the intrinsic value calculation for HLT stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 6.2% for Hilton Worldwide Holdings.

Corporate tax rate of 27% is the nominal tax rate for Hilton Worldwide Holdings. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the HLT stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for HLT are equal to 66.5%.

Life of production assets of 34.1 years is the average useful life of capital assets used in Hilton Worldwide Holdings operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for HLT is equal to -11.8%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1688 million for Hilton Worldwide Holdings - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 298.186 million for Hilton Worldwide Holdings is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Hilton Worldwide Holdings at the current share price and the inputted number of shares is $21.8 billion.

RELATED COMPANIES Price Int.Val. Rating
MAR Marriott Inter 115.51 89.80  sell
H Hyatt Hotels 71.62 36.00  str.sell
CHH Choice Hotels 75.00 27.39  str.sell
IHG InterContinent 55.50 165.95  str.buy

COMPANY NEWS

▶ Hilton Earns #2 Spot as Worlds Best Workplace   [Oct-15-18 11:54AM  Business Wire]
▶ Randy Paragary selects brand for $29 million hotel project in midtown   [10:56AM  American City Business Journals]
▶ This week in Bezos: The return to Amazon HQ2 again   [03:09PM  American City Business Journals]
▶ 'Under the radar' hotel group consolidates, buys Triad office condo   [07:42AM  American City Business Journals]
▶ Hilton just recruited this Hollywood star for new marketing campaign   [Oct-04-18 05:51PM  American City Business Journals]
▶ Hyatt Hotels settles with striking Chicago workers   [04:57PM  American City Business Journals]
▶ Anna Kendrick pitches for Hilton   [07:59AM  American City Business Journals]
▶ The Drake Hotel names a new hotel manager   [03:56PM  American City Business Journals]
▶ Hilton Hotels settles with striking Chicago hotel workers   [Oct-01-18 01:53PM  American City Business Journals]
▶ New owner of Triad hotels explains motives for $25.5 million purchases   [Sep-26-18 07:15AM  American City Business Journals]
▶ Marriott inks new contract with Chicago hotel workers   [Sep-21-18 01:43PM  American City Business Journals]
▶ Dole sells headquarters to Hilton Foundation for $50M   [Sep-14-18 03:57PM  American City Business Journals]
▶ Chicago hotel workers still on strike as conventioneers pour into city   [Sep-10-18 01:09PM  American City Business Journals]
▶ Three Cocktails to Take you From Summer to Fall   [Sep-09-18 04:40PM  TheStreet.com]
▶ Potential hotel strike looms over S.F.'s 'October Crush'   [Sep-07-18 04:08PM  American City Business Journals]
▶ Hilton names new chief of the Americas   [Aug-23-18 11:03AM  American City Business Journals]
▶ Bill Nygren's Top 3 Buys in 2nd Quarter   [Aug-22-18 06:17PM  GuruFocus.com]
▶ The Triangle Welcomes First Tru by Hilton   [Aug-21-18 04:16PM  PR Newswire]
▶ Exclusive: Developer kickstarts nearly $500M project in Midtown, on a familiar site   [Aug-20-18 02:27PM  American City Business Journals]
▶ Sale price for brewer's Gulch home definitely not pint-sized   [02:56PM  American City Business Journals]
▶ New South San Francisco hotel cements Hilton's push into modular construction   [Aug-15-18 07:07PM  American City Business Journals]
▶ [$$] What Millennials Want in Hotel Rooms   [Aug-12-18 10:00PM  The Wall Street Journal]
▶ Hilton Hotels opens a new concept at McCormick Place   [Aug-08-18 12:48PM  American City Business Journals]
▶ Exclusive: Gulch hotel developer doesn't want Yazoo to leave   [08:34AM  American City Business Journals]
▶ These D.C.-area hoteliers ranked highest for loyalty rewards programs   [12:01AM  American City Business Journals]
▶ First Canopy hotel for Charlotte pegged for SouthPark site   [Jul-30-18 03:05PM  American City Business Journals]
▶ Site work begins on under-the-radar Triad downtown hotel   [Jul-20-18 02:55PM  American City Business Journals]
▶ New Survey Explores Link Between Travel and Curiosity   [Jul-19-18 08:08AM  Business Wire]
▶ Exclusive: Hilton-brand hotel on tap for Yazoo's Gulch home   [03:10PM  American City Business Journals]
▶ Chicago-based travel software Journera raises $9 million   [Jul-12-18 09:54AM  American City Business Journals]
▶ Presidio Cos. planning Hilton hotel in West Sacramento   [10:08AM  American City Business Journals]

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