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On Friday, BofA Securities analyst Ronald Leung increased the price target for Atour Lifestyle Holdings (NASDAQ: ATAT) to $36.80, up from the previous $35.30, while reiterating a Buy rating on the shares. The revision comes ahead of the company’s full-year 2024 earnings report, which is scheduled to be released before the US market opens on March 25. According to InvestingPro data, ATAT has demonstrated exceptional financial health with an overall score of "GREAT" and impressive revenue growth of 76% in the last twelve months.
Leung forecasts a significant 52% year-over-year increase in revenue for Atour Lifestyle, reaching 7.1 billion RMB, aligning with the higher end of the company’s own guidance range of 48-52%. The anticipated growth is expected to yield an adjusted net profit of 1.286 billion RMB, marking an increase of 42% compared to the previous year, and suggesting net margins of around 18%. With a remarkably low PEG ratio of 0.16, the company appears attractively valued relative to its growth prospects. Discover more valuable insights with InvestingPro, which offers 10+ additional investment tips for ATAT.
For the fourth quarter of 2024, the analyst estimates a 29% year-over-year growth in revenue to 1.935 billion RMB. The net profit for the same period is projected to rise by 41% year-over-year to 313 million RMB, despite a 5% decline in Revenue per Available Room (RevPAR).
The market’s attention is likely to focus on the management’s forecast for RevPAR, retail performance, new openings and signings, and the expected revenue growth for the fiscal year 2025. These factors are considered crucial indicators of Atour Lifestyle’s future performance and market position.
In other recent news, Citi analysts have updated their outlook on Atour Lifestyle Holdings, adjusting the stock’s price target to $35.80 from the previous $30.50 while maintaining a Buy rating. This change reflects a strategic shift in valuation, with expectations based on the company’s projected enterprise value to EBITDA in 2025. The analysts highlighted Atour Lifestyle’s strong brand portfolio and its strategic expansion in both hotel operations and its sleep-focused retail business as key drivers of anticipated growth. Despite some underperformance during the Chinese New Year period, particularly in occupancy rates, the average daily rate remained stable. Citi expects any revenue pressures to ease by the second quarter of 2025, allowing the company to continue its competitive edge. The firm’s unique approach in the hospitality sector has been recognized for providing rapid returns to franchisees, further solidifying its market position. Citi’s maintained Buy rating and increased price target suggest a positive outlook for Atour Lifestyle, with confidence in its ability to capitalize on future market opportunities.
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