What Happened?
Shares of hotel franchisor Choice Hotels (NYSE: CHH) fell 1.8% in the afternoon session after the stock continued its recent downward trend, reaching a new 52-week low and entering technically oversold territory.
The decline pushed the stock's Relative Strength Index (RSI), a technical indicator of momentum, to a reading of 29. An RSI below 30 often suggests a stock is oversold, meaning the recent selling may be overextended. This movement continues the negative sentiment from last week when the stock hit a 52-week low. Investor concerns may also be linked to the company's second-quarter financial results reported in August. While Choice Hotels surpassed earnings per share expectations, its revenue of $426 million fell short of the anticipated $430.18 million, highlighting challenges in the current economic climate.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Choice Hotels? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Choice Hotels’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
Choice Hotels is down 19% since the beginning of the year, and at $114.82 per share, it is trading 26.4% below its 52-week high of $155.97 from February 2025. Investors who bought $1,000 worth of Choice Hotels’s shares 5 years ago would now be looking at an investment worth $1,182.
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