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On Thursday, Loop Capital Markets adjusted their financial outlook on OneSpaWorld Holdings Ltd. (NASDAQ:OSW), increasing the price target to $24 from the previous $20 while maintaining a Buy rating on the company’s shares. The revision comes after Loop Capital’s analysts updated their discounted net operating profit after tax (NOPAT) model for the upcoming year. The stock, currently trading near its 52-week high of $23.01, has delivered an impressive 65% return over the past year. According to InvestingPro, the company shows strong momentum with multiple positive indicators, including expected net income growth for the current year.
The firm’s decision to raise the price target reflects a strategic reassessment of OneSpaWorld’s revenue growth projections. Analysts at Loop Capital have modified their 2025 revenue growth estimate from 10% to 6%, citing the company’s guidance that ship growth is expected to be more significant towards the end of the year. Despite this adjustment, the analysts have kept their ship growth estimate steady, now anticipating that most new ships will enter service in the fourth quarter of the year. The company has maintained a solid 5-year revenue CAGR of 10%, with InvestingPro data showing a robust financial health score of 3.58 out of 5, rated as "GREAT."
OneSpaWorld’s financial performance in the fourth quarter showed promising signs, with a 7% increase in weekly revenue per ship, which Loop Capital highlighted as an excellent outcome. This performance indicator is particularly noteworthy for the company, which operates health and wellness centers on cruise ships and at destination resorts.
In addition to the operational achievements, OneSpaWorld’s financial health appears to be on the upswing. The company has made strides in strengthening its balance sheet, with total debt falling below $100 million, representing a conservative debt-to-capital ratio of just 5%. Moreover, OneSpaWorld demonstrated its financial flexibility and commitment to shareholder returns by paying out a $4 million dividend in the fourth quarter. For a deeper understanding of OneSpaWorld’s financial position and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro, which provides detailed analysis of the company’s performance metrics and future outlook.
Loop Capital’s updated price target and sustained Buy rating signal confidence in OneSpaWorld’s business model and financial management, even as the company navigates the timing of its ship growth and adjusts its revenue expectations accordingly. The firm’s analysis suggests that despite the recalibrated growth forecast, OneSpaWorld is on a solid path to deliver value to its investors.
In other recent news, OneSpaWorld Holdings Ltd. reported its fourth-quarter earnings for 2024, revealing a slight miss on earnings per share (EPS) expectations but a notable revenue beat. The company reported an EPS of $0.20, slightly below the forecasted $0.21, while revenues reached $217.2 million, surpassing the anticipated $212.66 million. Despite the revenue growth, the company’s stock experienced a decline following the announcement. The full-year revenue marked a record at $895 million, up 13% from the previous year. OneSpaWorld also announced plans to expand its health and wellness services, including the opening of centers on nine new ship builds. Analyst firms like William Blair and Stifel participated in the earnings call, discussing the company’s performance and future strategies. Additionally, OneSpaWorld’s CFO, Stephen Lazarus, highlighted expectations for total revenue in 2025 to range between $950 million and $970 million, with projected adjusted EBITDA of $115 million to $125 million. The company continues to focus on strategic growth, including pre-booking and service innovation.
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