InterContinental Hotels Group PLC Fundamental Analysis (NYSE: IHG)
InterContinental Hotels Group PLC Fundamental Analysis (NYSE: IHG)
InterContinental Hotels Group PLC (NYSE: IHG) shows weak financial fundamentals with a PE ratio of 34.94, profit margin of 13.40%, and ROE of -24.97%. The company generates $5.2B in annual revenue with moderate year-over-year growth of 5.40%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 38.1/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze IHG's fundamental strength across five key dimensions:
Efficiency Score
ExcellentIHG demonstrates superior asset utilization.
Valuation Score
ModerateIHG shows balanced valuation metrics.
Growth Score
ExcellentIHG delivers strong and consistent growth momentum.
Financial Health Score
ModerateIHG shows balanced financial health with some risks.
Profitability Score
WeakIHG struggles to sustain strong margins.
Key Financial Metrics
Is IHG Expensive or Cheap?
P/E Ratio
IHG trades at 34.94 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, IHG's PEG of -18.63 indicates potential undervaluation.
Price to Book
The market values InterContinental Hotels Group PLC at -8.35 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 16.50 times EBITDA. This signals the market has high growth expectations.
How Well Does IHG Make Money?
Net Profit Margin
For every $100 in sales, InterContinental Hotels Group PLC keeps $13.40 as profit after all expenses.
Operating Margin
Core operations generate 23.38 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-24.97 in profit for every $100 of shareholder equity.
ROA
InterContinental Hotels Group PLC generates $13.66 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
InterContinental Hotels Group PLC produces operating cash flow of $914.26M, showing steady but balanced cash generation.
Free Cash Flow
InterContinental Hotels Group PLC generates strong free cash flow of $888.05M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $6.01 in free cash annually.
FCF Yield
IHG converts 3.74% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
34.94
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
-18.63
vs 25 benchmark
P/B Ratio
Price to book value ratio
-8.35
vs 25 benchmark
P/S Ratio
Price to sales ratio
4.56
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
-1.53
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.66
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.25
vs 25 benchmark
ROA
Return on assets percentage
0.14
vs 25 benchmark
ROCE
Return on capital employed
0.52
vs 25 benchmark
How IHG Stacks Against Its Sector Peers
| Metric | IHG Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 34.94 | 25.90 | Worse (Expensive) |
| ROE | -24.97% | 961.00% | Weak |
| Net Margin | 13.40% | -4888.00% (disorted) | Strong |
| Debt/Equity | -1.53 | 0.60 | Strong (Low Leverage) |
| Current Ratio | 0.66 | 2.34 | Weak Liquidity |
| ROA | 13.66% | 322.00% | Weak |
IHG outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews InterContinental Hotels Group PLC's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
249.25%
Industry Style: Cyclical, Growth, Discretionary
High GrowthEPS CAGR
571.00%
Industry Style: Cyclical, Growth, Discretionary
High GrowthFCF CAGR
926.20%
Industry Style: Cyclical, Growth, Discretionary
High Growth