ONE LEVEL DEEPER
MAR
Warren Buffett frameworkThe Owner-OperatorBenjamin Graham frameworkThe Value ArchitectMichael Mauboussin frameworkThe Expectations EngineerHoward Marks frameworkThe Cycle WhispererPeter Lynch frameworkThe Everyday Edge

4.3% revenue growth commanding 46.8x earnings — Lynch's framework spots a stalwart wearing a fast-grower's price tag.

cautiousLeaning Bearishconviction

Marriott trades at 46.8x earnings despite growing just 4.3% annually — this framework suggests avoiding mature companies priced like fast growers.

THE LENSES
THE CLASSIFICATIONstalwart

What kind of company is this and what should I expect?

TTM revenue growth of 4.3% with Q4'25 revenue at $6.69B
Operating margins steady at 11.6% in Q4'25, down from 18.3% peak
Asset-light model with 77.8% revenue from franchise/management fees
Recovered from COVID collapse but growth decelerating from double-digit rates

This framework classifies Marriott as a classic stalwart — large, mature, growing slower than 10% annually. The asset-light franchise model provides stability, but at 4.3% growth, this isn't where Lynch found his 10-baggers.

Revenue
THE PEG RATIOextreme

Am I paying a fair price for the growth I'm getting?

P/E ratio at 46.8x in Q4'25 — 83rd percentile over 10 years
Earnings growth implied at 4.91% perpetually versus 4.3% trailing
PEG ratio approximately 10.9 (46.8 P/E / 4.3% growth)
EV/EBITDA at 103.4x — 80th percentile historically

With a PEG around 11, this framework sees extreme overvaluation. Lynch's rule is simple: PEG above 2 means you're paying too much for growth. At nearly 11 times fair value by this metric, the price assumes growth will accelerate dramatically from current levels.

P/E Ratio
THE GROWTH STORYmature

Can I explain in one sentence why this company grows?

Revenue concentration: 60.8% reimbursements, 17.0% fee service
Geographic mix: 82.4% domestic, 17.6% international
9,800+ properties across 145 countries through franchise model
Revenue recovered to $6.69B but growth rate declining to 4.3%

The story is clear: Marriott collects fees from franchisees operating hotels globally. But this framework notes the story is fully mature — revenue at 95th percentile historically with decelerating growth suggests the easy expansion is behind us.

Revenue by Segment
WHERE IN THE STORYlate

Are we in the beginning, middle, or end of this growth story?

Revenue at 95th percentile historically ($6.69B in Q4'25)
Growth decelerating from pandemic recovery to 4.3% annually
Operating margins compressed from 18.3% peak to 11.6%
Market saturation with 9,800+ properties globally

This framework sees late innings. Peak revenue, decelerating growth, and margin compression all signal a mature story. The easy growth from expanding the franchise network appears exhausted.

Operating Margin
KEY NUMBERS
VERDICT

Applying this framework, Marriott exemplifies what Lynch avoided: a mature stalwart trading at fast-grower prices. With a PEG around 11, 4.3% growth, and insiders selling, the framework finds no edge. The clear business model and stable franchise fees provide downside protection, but at 46.8x earnings, even stalwart virtues can't justify the premium. Would you rather own a mature hotel franchisor at 47x earnings or wait for the next undiscovered fast grower at 15x?

This analysis applies Peter Lynch's published investment framework to publicly available financial data. It is not authored by, endorsed by, or affiliated with Peter Lynch. Educational purposes only. Not financial advice.

OTHER PERSPECTIVES
Warren Buffett framework
The Owner-Operator
Leaning Bullish
Benjamin Graham framework
The Value Architect
Leaning Bearish
Michael Mauboussin framework
The Expectations Engineer
Leaning Bearish
Howard Marks framework
The Cycle Whisperer
Bearish
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