Atour Lifestyle Holdings Limited Just Missed Earnings - But Analysts Have Updated Their Models

It's been a good week for Atour Lifestyle Holdings Limited (NASDAQ:ATAT) shareholders, because the company has just released its latest second-quarter results, and the shares gained 8.6% to US$19.02. Revenue of CN¥1.8b surpassed estimates by 9.6%, although statutory earnings per share missed badly, coming in 67% below expectations at CN¥0.73 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Atour Lifestyle Holdings

Taking into account the latest results, the consensus forecast from Atour Lifestyle Holdings' eleven analysts is for revenues of CN¥6.99b in 2024. This reflects a decent 15% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to swell 13% to CN¥8.54. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥6.56b and earnings per share (EPS) of CN¥8.19 in 2024. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.

Althoughthe analysts have upgraded their earnings estimates, there was no change to the consensus price target of US$27.02, suggesting that the forecast performance does not have a long term impact on the company's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Atour Lifestyle Holdings analyst has a price target of US$32.00 per share, while the most pessimistic values it at US$23.03. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Atour Lifestyle Holdings is an easy business to forecast or the the analysts are all using similar assumptions.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 33% growth on an annualised basis. That is in line with its 41% annual growth over the past three years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 9.7% annually. So although Atour Lifestyle Holdings is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Atour Lifestyle Holdings following these results. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that in mind, we wouldn't be too quick to come to a conclusion on Atour Lifestyle Holdings. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Atour Lifestyle Holdings going out to 2026, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 2 warning signs for Atour Lifestyle Holdings that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.