Marriott International Inc (MAR)

Conclusion

Marriott International operates, franchises and licenses hotels, residences and timeshares worldwide under brands such as Marriott Hotels, The Ritz-Carlton and Courtyard. At 417.16 USD on 2026-11-09, the market capitalisation is 107.4 billion USD and the enterprise value is 124.6 billion USD.

The verdict is overvalued. The price-to-earnings ratio of 40.5x compares with a ten-year median of 31.7x, a premium of 27.8%. The DCF gives 293.32 USD per share at a discount rate of 10.6%, and the fair value from historical multiples is 339.19 USD. The fair value band runs from 253.00 to 379.50 USD with a midpoint of 316.25 USD, giving a margin of safety of -24.2%. The reverse DCF implies growth of 14.2% a year, against revenue growth of 19.9% a year over five years and free cash flow per share growth of 16.0%.

What holds the case up is the return on capital: ROIC of 27.9% against a WACC of 9.6%, and free cash flow conversion of 146.9% on a trailing basis. The Piotroski score of 7 out of 9 supports earnings quality. What would break it is the price itself, since the margin of safety is -24.2%. Net debt to EBITDA of 3.35x and an interest coverage of 5.07x leave less room for error, and the insolvency estimate is 3.9%.

Financial health

Financial health is green, held up by a current ratio of 9.06x and an Altman Z-score of 7.86, while net debt to EBITDA of 3.35x and interest coverage of 5.07x are only neutral. The Altman Z-score falls in the safe zone, although that model was designed for manufacturers and Marriott is an asset-light hotel company, so the reading is indicative only. Insolvency risk: medium, about 3.9% by the estimate of the Ohlson model over one to two years. The quick ratio is also 9.06x. The debt-to-equity ratio is not available because the company reports negative shareholder equity, which also means that a conventional equity-based leverage measure cannot be read.

Earnings quality

Earnings quality is green, supported by a Piotroski score of 7 out of 9 and a Beneish M-score of -2.57, which is read as unlikely to signal manipulation. Free cash flow conversion is 146.9% on a trailing basis and 89.9% over five years, and the accrual ratio is -2.3%, which points to cash earnings. Stock-based compensation is 0.9% of revenue, and free cash flow after it is 3.64 billion USD. The share count fell at a five-year compound rate of 3.7%, which reflects buybacks. The company beat earnings expectations in seven of the last eight quarters, with an average surprise of 3.2%. Analysts raised current-year estimates by 3.2% over 90 days and next-year estimates by 2.2%, with 11.6% expected growth next year.

Profitability

Profitability is green. The operating margin of 15.8% sits above its ten-year median of 12.4%, the gross margin of 20.2% is above 19.4%, and the net margin of 9.7% is above 8.6%. ROIC of 27.9% against a WACC of 9.6% gives a ROIC-minus-WACC value of 18.3%, which the model labels as creating value. The five-year median ROIC is 24.8%. The DuPont split shows a net margin of 9.9% and an asset turnover of 0.95x, so the return comes from margin and operating efficiency rather than leverage. Return on equity is not available, because negative shareholder equity makes the measure unusable.

Growth

Growth is green. Revenue compounded at 8.0% over three years, 19.9% over five years and 6.1% over ten years. Earnings per share grew 10.1% a year over three years and 11.9% over ten years. Free cash flow per share grew 15.8% over three years, 16.0% over five years and 8.1% over ten years. Revenue grew in nine of the ten comparable years. The five-year revenue figure is well above the ten-year rate, so the recent pace is stronger than the long-run trend.

Valuation

Valuation is red. The price-to-earnings ratio of 40.5x stands against a ten-year median of 31.7x, a premium of 27.8%. EV/EBITDA of 24.2x compares with a median of 21.0x, a premium of 15.6%. Price to sales of 3.9x compares with a median of 2.9x, a premium of 34.1%, while price to free cash flow of 27.6x sits at a discount of 4.4% to its median of 28.8x. The DCF is 293.32 USD per share at a discount rate of 10.6%, with 2.5% long-term growth. The fair value from historical multiples is 339.19 USD. The fair value band runs from 253.00 to 379.50 USD, midpoint 316.25 USD, and the margin of safety is -24.2% at a price of 417.16 USD. The reverse DCF implies 14.2% growth, with a gap of -5.7% against five-year revenue growth. The dividend yield is 0.7% and the payout on free cash flow is 18.9%. These values are an order of magnitude built on fixed assumptions, not a price target.

Risks

The main risk is valuation: if growth slows toward the 5.7% gap implied by the reverse DCF, the premium multiples could compress further. Net debt to EBITDA of 3.35x means that a fall in earnings would raise leverage quickly, and interest coverage of 5.07x would narrow with higher borrowing costs. The insolvency estimate of 3.9% is medium and would rise if earnings weakened. Debt-to-equity and return on equity are not available because of negative shareholder equity. This analysis has no debt maturity schedule and no revenue by segment, so refinancing risk and the source of growth cannot be assessed. The DCF rests on a 10.6% discount rate and fixed growth assumptions, so small changes in those inputs would move the value materially.