Please ensure Javascript is enabled for purposes of website accessibility

Why Wyndham Worldwide Corporation's Shares Popped 11% Today

By Travis Hoium - Updated Apr 26, 2017 at 4:39PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Better-than-expected earnings helped push Wyndham Worldwide Corporation's shares higher, but this still wasn't a blowout quarter.

What happened 

Shares of hotel brand Wyndham Worldwide Corporation (WYND 4.32%) jumped as much as 11.1% in trading Wednesday after reporting first-quarter 2017 earnings. At 3:45 p.m. EDT on Wall Street, shares were still up an impressive 9.6% on the day. 

So what

Revenue for the quarter rose just 1% to $1.32 billion, but net income rose 47% from a year ago to $141 million, or $1.33 per share. Adjusted for one-time items, earnings were $1.14 per share, beating Wall Street's estimate by three cents. 

Hotel guest gets a hotel keycard.

Image source: Getty Images.

Management also said it still expects full-year revenue of $5.80 billion to $5.95 billion and adjusted earnings of $5.98 to $6.18 per share, based on 105.5 million shares outstanding. 

Now what

First-quarter results don't show tremendous growth, but margins are improving slightly, and that's what had investors pushing shares higher. Keep in mind that growth is still in the low single-digits, and it isn't expected to pick up significantly soon. With shares trading at 18 times trailing earnings, shares are pretty expensive for a slow-growth stock. For that reason, I'll sit out today's pop, but look for opportunities if shares dip to get in at a better value for this hotel industry leader. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Wyndham Worldwide Corporation Stock Quote
Wyndham Worldwide Corporation
$49.70 (4.32%) $2.06

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/16/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.