GreenTree Hospitality (USA Stocks:GHG) is to drop even more in December

As we approach the end of the year, investors are keenly watching GreenTree Hospitality Group, a leading player in the Consumer Cyclical sector, specifically in the Hotels, Resorts & Cruise Lines concentration. The company, listed on the NYSE, has had a volatile year, with its stock price oscillating between a 52-week low of $2.54 and a high of $6.78. However, with a recent uptick in its 50-day moving average to $4.382, slightly above its valuation market value of $4.39, there are signs that a reversal may be on the horizon. GreenTree's financials also hint at a potential turnaround. The company's EPS estimate for the current year stands at $0.46, with a slight increase projected for the next year at $0.49. The EPS estimate for the current quarter is $0.1, with an expected rise to $0.14 in the next quarter. These figures suggest a steady growth in earnings, which could translate into a stronger stock performance. Furthermore, the company's valuation real value is currently pegged at $4.19, slightly below its naive expected forecast value of $4.47. This discrepancy indicates a potential undervaluation of the stock, presenting an attractive entry point for investors. The stock's short ratio stands at 6.09, with a short percent of 0.0013, representing a relatively low level of short interest. This, coupled with an accumulation distribution of 229.08, suggests a positive sentiment among investors and could potentially fuel a rally in the stock price. As we head into December, the turning point for GreenTree Hospitality Group's stock may be near. Investors should keep a close eye on this stock as the fiscal year comes to a close. At present, it is anticipated that GreenTree Hospitality's Free Cash Flow may significantly decrease in the forthcoming years. The current Invested Capital of GreenTree Hospitality is projected to rise to approximately 5.8 billion, while Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) is expected to decrease to 119.2 million. The purpose of this outlook is to provide shareholders with our perspective on GreenTree's future value. We will explore the reasons why this could be a game-changer for GreenTree Hospitality's shareholders.
Published over six months ago
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Reviewed by Vlad Skutelnik

GreenTree Hospitality Group maintains a Market Volatility (i.e., Beta) of -0.2371, indicating relatively insignificant fluctuations compared to the market. As market returns increase, GreenTree Hospitality's returns are expected to decrease at a significantly lower rate. During a bear market, GreenTree Hospitality is likely to outperform the market. While it's crucial to consider GreenTree Hospitality's current price history, caution is advised when relying on equity's current price movements. Our approach to predicting a stock's future performance involves examining both its past performance charts and the overall business, including all available technical indicators. GreenTree Hospitality offers twenty-one different technical indicators to help evaluate its performance. GreenTree Hospitality is projected to return -0.39%. Be sure to review GreenTree Hospitality's variance, skewness, day typical price, as well as the relationship between the total risk alpha and daily balance of power. This will help determine if GreenTree Hospitality's past performance will be replicated at some point in the near future.

Important Highlights

GreenTree Hospitality Group's stock has been on a downward trend for the majority of the year, with a 52-week high of 6.78 and a current price of 4.39. However, recent market indicators suggest a potential reversal may be on the horizon. The stock's 200-day moving average, a key technical indicator, stands at 4.6771, slightly above the current price, indicating a potential upward trend. Furthermore, the Accumulation Distribution index, a measure of the cumulative flow of money into and out of a security, is at a healthy 229.08, suggesting that the stock is being accumulated more than it is being distributed. Lastly, the company's EPS estimate for the current quarter is 0.1, indicating that the company is expected to report a profit, which could further boost investor sentiment. As we approach December, these factors could make GreenTree Hospitality Group's stock an attractive investment opportunity.
There are currently many different techniques concerning forecasting the market as a whole as well as predicting future values of individual securities such as GreenTree Hospitality. Regardless of method or technology, to accurately forecast the stock market is more a matter of luck rather than a particular technique. Nevertheless, trying to predict the stock market accurately is still an essential part of the overall investment decision process. Using different forecasting techniques and comparing the results might improve your chances of accuracy even though unexpected events may often change the market sentiment and impact your forecasting results.

Predictive Modules for GreenTree Hospitality

Sophisticated investors, who have witnessed many market ups and downs, anticipate that the market will even out over time. This tendency of GreenTree Hospitality's price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as GreenTree Hospitality. Your research has to be compared to or analyzed against GreenTree Hospitality's peers to derive any actionable benefits. When done correctly, GreenTree Hospitality's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy toward taking a position in GreenTree Hospitality.

How important is GreenTree Hospitality's Liquidity

GreenTree Hospitality financial leverage refers to using borrowed capital as a funding source to finance GreenTree Hospitality Group ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. GreenTree Hospitality financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to GreenTree Hospitality's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of GreenTree Hospitality's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between GreenTree Hospitality's total debt and its cash.

GreenTree Hospitality Gross Profit

GreenTree Hospitality Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing GreenTree Hospitality previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show GreenTree Hospitality Gross Profit growth over the last 10 years. Please check GreenTree Hospitality's gross profit and other fundamental indicators for more details.

What is the case for GreenTree Hospitality Investors

The current drop in stock price may raise some interest from stockholders. The stock closed today at a share price of 4.39 on 11,352 in trading volume. The company executives have failed to build on market volatilities in October. However, diversifying your overall positions with GreenTree Hospitality may protect your principal portfolio during upcoming market swings. The stock standard deviation of daily returns for 90 days investing horizon is currently 2.35. The current volatility is consistent with the ongoing market swings in October 2023 as well as with GreenTree Hospitality Group unsystematic, company-specific events.

Returns Breakdown

Return on Assets(0.0749)
Return on Equity(0.23)
Return Capital(0.0965)
Return on Sales(0.44)
"Buy low, sell high" is a timeless investment adage that may be applicable to GreenTree Hospitality Group.
The company's stock, currently trading at a typical day price of $4.41, is significantly below its 52-week high of $6.78. This, coupled with a Wall Street target price of $4.7, suggests potential upside. However, investors should be cautious as the company's probability of bankruptcy stands at a concerning 47.99%. On the brighter side, GreenTree's operating margin of 0.24% and a positive EPS estimate for the current year of $0.46 indicate some level of operational efficiency. Furthermore, the company's current ratio of 1.47X suggests it is reasonably well-positioned to meet its short-term obligations. As we approach December, it will be interesting to see if this marks a turning point for GreenTree Hospitality Group, a key player in the lodging industry with a market capitalization of $446.52M. .

Will GreenTree pull back in December 2023?

The current standard deviation of GreenTree Hospitality Group, standing at over 2.44, signifies a high level of volatility in the stock's returns. This indicates that the stock's price can experience significant fluctuations, potentially leading to substantial losses or gains. Given this increased level of risk, investors should proceed with caution when considering this stock. While it's challenging to forecast with absolute certainty, the high standard deviation could suggest a potential pullback in December 2023. Nonetheless, investors should keep a close eye on market conditions and the company's financial performance before making a decision. As of November 20th, GreenTree Hospitality has a Risk Adjusted Performance of -0.12, a market risk adjusted performance of 2.05, and a Standard Deviation of 2.44. The technical analysis of GreenTree Hospitality allows investors to use historical prices and volume momentum to identify a pattern that could predict the direction of the company's future prices. In other words, this information can be used to determine if the company will continue to follow its historical price patterns, or if the prices will revert. We have analyzed and collected data for thirteen technical drivers for GreenTree Hospitality, which can be compared to its competitors.
We recommend reviewing GreenTree Hospitality's variance, as well as the relationship between the maximum drawdown and skewness to determine if GreenTree Hospitality is priced fairly, considering its latest price of $4.39 per share. Given that GreenTree Hospitality Group has an information ratio of -0.20, we strongly advise you to verify GreenTree Hospitality's regular market performance to ensure the company can sustain itself in the future. In conclusion, GreenTree Hospitality Group's stock presents a potential investment opportunity for the month of December. With an analyst target price estimated value of 4.5 and a naive expected forecast value of 4.47, the stock appears to be slightly undervalued. The valuation real value stands at 4.19, which is lower than the valuation market value of 4.39, indicating a possible upside. However, investors should be cautious as the analyst overall consensus is a 'Hold' with one strong buy and one sell. The possible upside price is 6.82, while the possible downside price is 2.13. Hence, while the stock has potential, it also carries a certain level of risk. As the fiscal year end approaches, investors should closely monitor the stock's performance. .

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Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of GreenTree Hospitality Group. Please refer to our Terms of Use for any information regarding our disclosure principles.

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