Hilton Worldwide Holdings (HLT) reported third-quarter earnings per share of $2.45 on Oct. 27, 2026, above the analyst estimate of $2.37. Revenue of $3.33B came in below the estimate of $3.37B. Profit grew faster than sales versus a year earlier, which is the main takeaway: Hilton is earning more from each dollar of revenue, but the stock already prices in a lot of that.
Key facts
- Earnings per share (EPS), Q3 ended Sept. 30, 2026: $2.45 versus the analyst estimate of $2.37, a difference of +$0.08 (3.4%).
- Revenue, same quarter: $3.33B versus the estimate of $3.37B, a difference of -$47.8M (-1.4%). Revenue was 6.6% higher than the $3.12B in the third quarter of 2025.
- Net income: $536.0M, up 27.6% from $420.0M in the year-ago quarter.
- Operating income: $909.0M, versus $777.0M a year earlier.
- Share price: $351.89 as of Oct. 26, 2026, up 0.65% on the latest quote. The 52-week range is $253.54 to $364.50. Market cap is $79.20B.
One data note: the financial-statement feed we use lists diluted EPS for the quarter at $2.37, against $1.77 a year earlier. The $2.45 figure is the one compared with analyst estimates. The gap likely reflects different accounting bases (analyst estimates often exclude one-time items), but the company's release is the place to confirm the exact reconciliation.
What happened
Hilton makes most of its money by licensing its brands and managing hotels owned by others, not by owning the buildings. Its profit comes from fees, a share of each hotel's revenue, plus incentive fees when managed hotels perform well. That is why the company can grow profit faster than sales.
That pattern showed up here. Revenue rose 6.6% from a year earlier, while net income rose 27.6%. Operating income, which is profit from running the business before interest and taxes, was higher than a year earlier, and operating margin reached 27.3% from 24.9%.
The revenue miss needs context. Part of Hilton's reported revenue is "reimbursement revenue," money the company collects from hotel owners to cover costs such as hotel staff and marketing programs, and then passes through. It adds to sales but not much to profit. The latest segment breakdown we have is for the second quarter ended June 30, 2026. In that quarter reimbursement revenue was $1.98B, versus $1.81B a year earlier, while management and franchise revenue, the core fee business, was $808.0M versus $745.0M. Base management fees were $99.0M versus $97.0M, and incentive management fees were $69.0M versus $75.0M, lower than a year earlier. We do not have the third-quarter segment split, and the company's release details were not available to us beyond its headline, so we cannot say which line drove the small revenue shortfall.
Five-quarter trend
| Quarter (ended) | Revenue | Operating margin | Net income | |---|---|---|---| | Q3 FY2025 (Sept. 30, 2025) | $3.12B | 24.9% | $420.0M | | Q4 FY2025 (Dec. 31, 2025) | $3.09B | 19.5% | $297.0M | | Q1 FY2026 (March 31, 2026) | $2.94B | 23.1% | $385.0M | | Q2 FY2026 (June 30, 2026) | $3.34B | 25.7% | $482.0M | | Q3 FY2026 (Sept. 30, 2026) | $3.33B | 27.3% | $536.0M |
The trend is clear. After a seasonally weaker fourth quarter and first quarter, operating margin has risen for two straight quarters and is the highest in the five-quarter span. Net income is also the highest of the five. Revenue was flat between the second and third quarters, so the improvement came from profitability, not from more sales. (The feed's gross margin figures swing between about 30% and 76% from quarter to quarter, which looks like a classification quirk rather than a real business change, so we rely on operating margin.)
Cash flow and buybacks
Cash flow figures are available through the second quarter of 2026. Free cash flow, the cash left after capital spending, was $481.0M in that quarter, $609.0M in the first quarter, $151.0M in the fourth quarter of 2025, $766.0M in the third quarter of 2025 and $635.0M in the second quarter of 2025. It is uneven, but Hilton consistently returned more cash through share buybacks than it generated in some quarters: buybacks were $966.0M in the second quarter of 2026, against dividends of $34.0M. The dividend yield is small, 0.2%.
The balance sheet data from our feed shows odd entries for the quarter (total debt of $0.00, shareholders' equity of $0.00, negative cash). These look like data gaps, not facts about Hilton, so we are not drawing conclusions from them. The Piotroski score, a 0-to-9 financial health checklist, is 7, and the Altman Z score, a bankruptcy-risk gauge, is 3.17.
Why it matters for investors
Valuation is the debate. On a trailing-12-month basis Hilton trades at a price-to-earnings ratio (share price divided by yearly profit per share) of 51.15, price-to-sales of 6.34, enterprise value to EBITDA of 29.81 and price to free cash flow of 39.46. Its net margin is 12.7%.
Peers, on the same trailing basis:
- Accor S.A. (ACCYY): P/E 39.30, net margin 5.8%, market cap $11.69B.
- Hyatt Hotels (H): P/E 199.95, net margin 1.3%, market cap $16.23B.
- Choice Hotels International (CHH): P/E 15.28, net margin 20.3%, market cap $4.96B.
- Atour Lifestyle Holdings (ATAT): P/E 15.22, net margin 16.8%, market cap $4.51B.
Analysts are positive but not stretched. Of 49 ratings, 28 are buy and 21 are hold, with none at sell; the consensus is "Buy." Price targets average $352.50, with a median of $358.00, a high of $384.00 and a low of $316.00. The stock closed near the average target on Oct. 26, so analysts as a group see limited room from here. In the last 30 days, Morgan Stanley, JP Morgan, Evercore ISI, Wells Fargo and Barclays each reiterated positive ratings. FMP's own discounted cash flow model puts value at $112.59 per share, far below the market price. Such models depend heavily on assumptions and are a rough cross-check, not a forecast.
Our MoonshotScore. Stock Expert AI's MoonshotScore V2 for Hilton is 69.7, rated Strong. Compared with its sector, the pillars read: momentum 87, growth 80, quality 72, safety 61 and valuation 18. In plain terms, the business is growing and the stock has been rising, but the valuation pillar is weak, matching the multiples above.
What could go wrong.
- Valuation leaves less room for error. A high P/E means disappointments can hit the share price hard.
- Revenue missed the estimate, and incentive fees were lower than a year earlier in the second quarter, so fee growth is not uniform.
- Hotel demand is tied to travel spending and the economy, and fees fall when travelers cut back.
- Insider filings in the last 90 days show 0 open-market purchases and 3 sales (older filings may be missing). That is not unusual for executives with stock-based pay, but it is not a vote of confidence either.
What to watch next
- Fee growth versus pass-through revenue. Look for the third-quarter segment detail in the company's filing to see whether the fee business drove the profit gain.
- Margin durability. Operating margin of 27.3% is the five-quarter high; the next test is whether it holds in the seasonally softer winter quarters.
- Buybacks and cash flow. Repurchases have run well above dividends; watch whether free cash flow keeps funding them.
- Analyst expectations. For the quarter ending March 30, 2028, analysts estimate revenue of $3.40B and EPS of $2.51; for the quarter ending June 30, 2028, revenue of $3.90B and EPS of $3.11 (14 analysts each).
Frequently asked questions
Q: Did Hilton beat earnings estimates in the third quarter of 2026?
On profit, yes. Hilton reported EPS of $2.45 for the quarter ended Sept. 30, 2026, against the analyst estimate of $2.37. On revenue, no: $3.33B was below the $3.37B estimate.Q: How did Hilton's results compare with a year ago?
Revenue was 6.6% higher than the $3.12B in the third quarter of 2025, and net income was 27.6% higher at $536.0M versus $420.0M. Operating income was also higher, at $909.0M versus $777.0M.Q: Is Hilton stock expensive?
By several measures it is priced richly. The trailing P/E is 51.15 and EV/EBITDA is 29.81. Accor's P/E is 39.30, Choice's is 15.28 and Atour's is 15.22, though Hilton's profit margin and growth differ from theirs. Our MoonshotScore valuation pillar is 18, which is weak relative to its sector. This is a description of how the stock is priced, not a recommendation.This is educational content, not investment advice. Past performance does not guarantee future results.