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On Thursday, Macquarie analysts increased their price target on Atour Lifestyle Holdings (NASDAQ: ATAT) stock to $39.00, up from $38.00, while maintaining an Outperform rating. Currently trading at $33.13 and near its 52-week high of $33.31, the stock has delivered an impressive 75.52% return over the past year. According to InvestingPro analysis, the company appears slightly undervalued based on its Fair Value estimates. The revision comes as the company shows signs of narrowing declines in Revenue per Available Room (RevPar) for the second quarter of 2025.
In the first quarter of 2025, Atour reported a 7.2% year-over-year drop in RevPar, with the occupancy rate (OCC) experiencing a more significant decrease and the average daily rate (ADR) falling by 2.8% compared to the previous year. Despite slow recovery in business travel due to macroeconomic uncertainties and tariff challenges, leisure travel demand remains robust, particularly during the May labor holiday period. The company maintains an excellent financial health score of 3.82 according to InvestingPro, which offers 12 additional key insights about Atour’s performance and prospects.
The company’s retail segment has once again drawn attention with its impressive performance, posting a 70.9% year-over-year increase in Gross Merchandise Volume (GMV), with online sales representing 90% of the total. This strong performance contributes to Atour’s overall revenue growth of 55.34% over the last twelve months, with a healthy gross profit margin of 42.16%. Atour’s expansion into new product lines like comforters has bolstered its market presence. The launch of the deep sleep thermo-regulating comforter pro 2.0 is expected to drive sales during the 618 shopping event. Consequently, management has updated its full-year retail sales guidance, projecting a 50% increase year-over-year, a notable rise from the previously forecasted 35%.
Atour’s growth strategy includes a robust network expansion. The company opened 121 hotels during the second quarter and is on course to meet its annual goal of 500 new hotel openings. With a market capitalization of $4.15 billion, Atour has established itself as a significant player in the hospitality sector. New franchisee interest remains high, and the introduction of upgrades to both Atour and Atour Light in March is seen as essential for the brand to stay relevant and align with current consumer preferences. For a comprehensive analysis of Atour’s growth potential and financial metrics, access the full Pro Research Report available on InvestingPro.
In other recent news, Atour Lifestyle Holdings reported strong financial results for the first quarter of 2025, highlighting significant revenue growth. The company achieved net revenues of RMB1.91 billion ($263 million), marking a 29.8% year-over-year increase. Adjusted earnings per share were reported at RMB0.82 ($0.11). Atour’s hotel network expanded with 1,727 hotels and 194,559 rooms in operation, reflecting growth rates of 32.6% and 31.3% year-over-year, respectively. However, revenue per available room (RevPAR) decreased to RMB304 from RMB328 due to lower occupancy rates of 70.2% compared to 73.3% the previous year. The retail segment also showed impressive growth, with gross merchandise value rising by 70.9% year-over-year to RMB845 million. Despite market volatility, Atour remains optimistic, projecting a 25% to 30% increase in total net revenues for the full year 2025.
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