3 Reasons HLT is Risky and 1 Stock to Buy Instead

September 02, 2025 at 00:02 AM EDT

HLT Cover Image

Since March 2025, Hilton has been in a holding pattern, posting a small return of 4.7% while floating around $276.06. The stock also fell short of the S&P 500’s 10.5% gain during that period.

Is there a buying opportunity in Hilton, or does it present a risk to your portfolio? Get the full stock story straight from our expert analysts, it’s free.

Why Is Hilton Not Exciting?

We're swiping left on Hilton for now. Here are three reasons why HLT doesn't excite us and a stock we'd rather own.

1. Long-Term Revenue Growth Disappoints

Examining a company’s long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Hilton grew its sales at a tepid 9.6% compounded annual growth rate. This was below our standard 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 $121.79 in the latest quarter, and over the last two years, its year-on-year growth averaged 1.8%. 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). Hilton Revenue Per Available Room

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 7.2%, close to its 9.6% annualized growth for the past five years. This projection doesn't excite us and implies its newer products and services will not lead to better top-line performance yet.

Final Judgment

Hilton’s business quality ultimately falls short of our standards. With its shares underperforming the market lately, the stock trades at 33.1× forward P/E (or $276.06 per share). Beauty is in the eye of the beholder, but we don’t really see a big opportunity at the moment. We're pretty confident there are superior stocks to buy right now. Let us point you toward the most dominant software business in the world.

Stocks We Would Buy Instead of Hilton

Donald Trump’s April 2025 "Liberation Day" tariffs sent markets into a tailspin, but stocks have since rebounded strongly, proving that knee-jerk reactions often create the best buying opportunities.

The smart money is already positioning for the next leg up. Don’t miss out on the recovery - check out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

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 Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.

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