Hospitality company Hyatt Hotels (NYSE: H) met Wall Street’s revenue expectations in Q4 CY2025, with sales up 11.7% year on year to $1.79 billion. Its non-GAAP profit of $1.33 per share was significantly above analysts’ consensus estimates.

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Company Overview

Founded in 1957, Hyatt Hotels (NYSE: H) is a global hospitality company with a portfolio of 20 premier brands and over 950 properties across 65 countries.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Hyatt Hotels grew its sales at a 28% annual rate. Though this growth is acceptable on an absolute basis, we need to see more than just topline growth for the consumer discretionary sector, which can display significant earnings volatility. This means our bar for the sector is particularly high, reflecting the non-essential and hit-driven nature of the products and services offered. Additionally, five-year CAGR starts around Covid, when revenue was depressed then rebounded.

We at StockStory place the most emphasis on long-term growth, but within consumer discretionary, a stretched historical view may miss a company riding a successful new property or trend. Hyatt Hotels’s recent performance shows its demand has slowed as its annualized revenue growth of 3.2% over the last two years was below its five-year trend. We’re wary when companies in the sector see decelerations in revenue growth, as it could signal changing consumer tastes aided by low switching costs.

We can dig further into the company’s revenue dynamics by analyzing its revenue per available room, which clocked in at $146.01 this quarter and is a key metric accounting for daily rates and occupancy levels. Over the last two years, Hyatt Hotels’s revenue per room averaged 12.3% year-on-year declines. Because this number is lower than its revenue growth, we can see its sales from other areas like restaurants, bars, and amenities outperformed its room bookings. It is sometimes the strategy of hotels to grow ancillary revenues because they are price takers in room revenues.

This quarter, Hyatt Hotels’s year-on-year revenue growth was 11.7%, and its $1.79 billion of revenue was in line with Wall Street’s estimates.

Looking ahead, sell-side analysts expect revenue to grow 2.6% over the next 12 months, similar to its two-year rate. This projection is underwhelming and implies its newer products and services will not lead to better top-line performance yet.

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Operating Margin

Hyatt Hotels’s operating margin might fluctuated slightly over the last 12 months but has remained more or less the same, averaging 5.3% over the last two years. This profitability was inadequate for a consumer discretionary business and caused by its suboptimal cost structure.

In Q4, Hyatt Hotels generated an operating margin profit margin of 5%, in line with the same quarter last year. This indicates the company’s overall cost structure has been relatively stable.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Hyatt Hotels’s full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it’s at a critical moment in its life.

In Q4, Hyatt Hotels reported adjusted EPS of $1.33, up from $0.42 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Hyatt Hotels’s full-year EPS of $2.17 to grow 50.5%.

Key Takeaways from Hyatt Hotels’s Q4 Results

It was good to see Hyatt Hotels beat analysts’ EPS expectations this quarter. On the other hand, its full-year EBITDA guidance missed and its revenue was in line with Wall Street’s estimates. Overall, this was a softer quarter. The stock remained flat at $167.26 immediately after reporting.

So should you invest in Hyatt Hotels right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).