Choice Hotels International reports Q1 2026 results this morning with short sellers fully committed and virtually no room left in the lending pool.
The borrow market confirmed what was flagged yesterday: availability has collapsed to just 0.25%, meaning the lending pool is effectively exhausted. That is a 95% tightening in a single week — availability was near 13% just five sessions ago. Cost to borrow, at 1.25%, has actually eased over the past month, down more than 30%. The message from the lending market is that shorts rushed in before the door closed, not after paying up in a panic. Short interest holds at 14.6% of the free float, with the ORTEX short score locked at 81.5 — a high reading that has barely moved in two weeks, reflecting an entrenched rather than accelerating short base. Options, by contrast, lean slightly bullish: the put/call ratio is 0.72, just below its 20-day average of 0.77, suggesting options traders are not adding incremental downside protection into today's print. The stock itself bounced nearly 6% yesterday and is up 5% on the week, clawing back ground after a 6% slide over the prior month.
The analyst community is cautious but not panicked. Morgan Stanley and Barclays both carry Underweight ratings with targets well below the current $112 price — Morgan Stanley's is $86, Barclays' $100. JP Morgan and Susquehanna sit at Neutral, with JP Morgan recently trimming its target to $116. The lone Buy-side voice is Truist Securities, with a $129 target. The bear case centres on RevPAR pressure and a valuation that still looks stretched: the P/E has compressed roughly 14% over 30 days to 14.3x, but the price-to-book remains elevated at 14.7x. Bulls point to the asset-light franchise model, an F-Score of 6, and return on assets above 10% as evidence the business generates durable cash with minimal capital drag.
Ownership adds a wrinkle worth noting. The Bainum family — longtime controlling shareholders — trimmed materially in the most recent filing period, with Stewart Bainum reducing by nearly 1.6 million shares and Roberta Bainum cutting by 400,000. Those moves came at prices around $100-$104, below where the stock trades today. On the other side, Balyasny Asset Management added over 1.1 million shares in Q1, a significant new commitment from an active manager. That tension — family selling, institutional money building — runs beneath the headline short interest story.
The prior earnings event in late April produced a 14% single-day decline. Today's print is the test of whether that reaction reflected a structural re-rating or a one-time miss — and whether 14.6% short interest and a fully exhausted borrow pool can absorb whatever the numbers deliver.
See the live data behind this article on ORTEX.
Open CHH on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data. Content is informational only and does not constitute investment advice.
