OneSpaWorld Holdings Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions

It's been a pretty great week for OneSpaWorld Holdings Limited (NASDAQ:OSW) shareholders, with its shares surging 16% to US$14.84 in the week since its latest first-quarter results. It looks like a credible result overall - although revenues of US$211m were what the analysts expected, OneSpaWorld Holdings surprised by delivering a (statutory) profit of US$0.21 per share, an impressive 91% above what was forecast. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for OneSpaWorld Holdings

Taking into account the latest results, the most recent consensus for OneSpaWorld Holdings from five analysts is for revenues of US$869.8m in 2024. If met, it would imply a reasonable 5.7% increase on its revenue over the past 12 months. Per-share earnings are expected to surge 84% to US$0.60. Before this earnings report, the analysts had been forecasting revenues of US$861.0m and earnings per share (EPS) of US$0.52 in 2024. Although the revenue estimates have not really changed, we can see there's been a decent improvement in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

The consensus price target was unchanged at US$17.25, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. 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. Currently, the most bullish analyst values OneSpaWorld Holdings at US$21.00 per share, while the most bearish prices it at US$16.00. This is a very narrow spread of estimates, implying either that OneSpaWorld Holdings is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that OneSpaWorld Holdings' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 7.7% growth on an annualised basis. This is compared to a historical growth rate of 13% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than OneSpaWorld Holdings.

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 OneSpaWorld Holdings following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that OneSpaWorld Holdings' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$17.25, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for OneSpaWorld Holdings going out to 2026, and you can see them free on our platform here..

It is also worth noting that we have found 3 warning signs for OneSpaWorld Holdings that you need to take into consideration.

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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.