Is it too late to consider buying Marriott International, Inc. (NASDAQ: MAR)?

Let’s talk about the popular Marriott International, Inc. (NASDAQ: MAR). The company’s shares have received a lot of attention due to significant price movement on the NASDAQGS over the past few months, rising as high as US$166 at one point, and falling as low as $133 US$. Certain stock price movements can give investors a better opportunity to enter the stock and potentially buy at a lower price. It is worth asking whether Marriott International’s current stock price of US$144 reflects the true value of the large-cap company? Or is it currently undervalued, giving us an opportunity to buy? Let’s take a look at Marriott International’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Marriott International

What is the opportunity at Marriott International?

Marriott International appears to be expensive according to my price multiple model, which compares the company’s price-to-earnings ratio to the industry average. I used the price-to-earnings ratio in this case because there is not enough visibility to forecast its cash flows. The stock’s ratio of 26.78x is currently well above the industry average of 17.08x, meaning it is trading at a higher price than its peers. But is there another opportunity to buy cheap in the future? Since Marriott International’s stock price is quite volatile, this could mean that it could fall (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator of how the stock is doing relative to the rest of the market.

What kind of growth will Marriott International generate?

Investors looking for growth in their portfolio may want to consider a company’s prospects before buying its shares. Buying a great company with a strong outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. With earnings expected to grow 68% over the next two years, the future looks bright for Marriott International. It looks like higher cash flow is on the cards for the stock, which should translate into a higher share valuation.

What this means for you

Are you a shareholder? MAR’s optimistic future growth appears to have been factored into the current share price, with shares trading above industry price multiples. However, this raises another question: is now the right time to sell? If you think MAR should trade below its current price, selling high and buying it back when its price falls toward the industry PE ratio can be profitable. But before making this decision, check if its fundamentals have changed.

Are you a potential investor? If you’ve been watching MAR for a while, now may not be the best time to get into the stock. The price has outperformed its industry peers, meaning there is likely no longer any upside from mispricing. However, the optimistic outlook is encouraging for MAR, which means it is worth delving deeper into other factors in order to take advantage of the next price drop.

So while earnings quality is important, it’s equally important to consider the risks Marriott International is facing right now. Concrete example: we spotted 2 Warning Signs for Marriott International you should be aware of this.

If Marriott International no longer interests you, you can use our free platform to consult our list of more than 50 other stocks with high growth potential.

Any feedback on this article? Worried about the content? Get in touch with us directly. You can also email the editorial team (at) Simplywallst.com.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to constitute financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your objectives or your financial situation. Our goal is to provide you with targeted, long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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