Marriott has been treading water for the past six months, recording a small loss of 4.8% while holding steady at $237.

Is now the time to buy Marriott, or should you be careful about including it in your portfolio? See what our analysts have to say in our full research report, it’s free .

We're cautious about Marriott. Here are three reasons why you should be careful with MAR and a stock we'd rather own.

Why Is Marriott Not Exciting?

Founded by J. Willard Marriott in 1927, Marriott International (NASDAQ:MAR) is a global hospitality company with a portfolio of over 7,000 properties and 30 brands, spanning 130+ countries and territories.

1. Weak RevPAR Growth Points to Soft Demand

We can better understand Travel and Vacation Providers companies by analyzing their RevPAR, or revenue per available room. This metric accounts for daily rates and occupancy levels, painting a holistic picture of Marriott’s demand characteristics.

Marriott’s RevPAR came in at $126.26 in the latest quarter, and over the last two years, its year-on-year growth averaged 8.1%. This performance was underwhelming and suggests it might have to invest in new amenities such as restaurants and bars to attract customers - this isn’t ideal because expansions can complicate operations and be quite expensive (i.e., renovations and increased overhead).

2. Projected Revenue Growth Is Slim

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect Marriott’s revenue to rise by 4.5%, a deceleration versus its 9.9% annualized growth for the past two years. This projection doesn't excite us and indicates its products and services will face some demand challenges.

3. EPS Barely Growing

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

Marriott’s EPS grew at an unimpressive 9.2% compounded annual growth rate over the last five years. On the bright side, this performance was better than its 3.7% annualized revenue growth and tells us the company became more profitable on a per-share basis as it expanded.

Final Judgment

Marriott isn’t a terrible business, but it doesn’t pass our quality test. That said, the stock currently trades at 22.3× forward price-to-earnings (or $237 per share). This valuation tells us it’s a bit of a market darling with a lot of good news priced in - we think there are better stocks to buy right now. We’d recommend looking at an all-weather company that owns household favorite Taco Bell .

Stocks We Like More Than Marriott

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