Hilton currently trades at $251.52 per share and has shown little upside over the past six months, posting a middling return of 1%.
Is there a buying opportunity in Hilton, or does it present a risk to your portfolio? Dive into our full research report to see our analyst team’s opinion, it’s free.
Why Is Hilton Not Exciting?
We're cautious about Hilton. Here are three reasons why there are better opportunities than HLT and a stock we'd rather own.
1. Long-Term Revenue Growth Disappoints
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Unfortunately, Hilton’s 4.3% annualized revenue growth over the last five years was sluggish. This fell short of our benchmark 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 $103.59 in the latest quarter, and over the last two years, its year-on-year growth averaged 3.4%. 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%, a slight deceleration versus its 9.9% annualized growth for the past two years. This projection is underwhelming and implies its products and services will face some demand challenges.
Final Judgment
Hilton isn’t a terrible business, but it isn’t one of our picks. That said, the stock currently trades at 30.9× forward P/E (or $251.52 per share). At this valuation, there’s a lot of good news priced in - we think there are better stocks to buy right now. We’d suggest looking at one of Charlie Munger’s all-time favorite businesses.
Stocks We Like More Than Hilton
Donald Trump’s victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs.
While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years.
Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
