Yahoo Finance Results: OneSpaWorld Holdings Limited Confounded Analyst Expectations With A Surprise Profit
Investors in OneSpaWorld Holdings Limited (NASDAQ:OSW) had a good week, as its shares rose 5.9% to close at US$10.46 following the release of its second-quarter results. Revenues beat expectations by 42%, and sales of US$9.2m were sufficient to generate a statutory profit of US$0.0033 - a pleasant surprise given that the analysts were forecasting a loss! This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on OneSpaWorld Holdings after the latest results.
View our latest analysis for OneSpaWorld Holdings
Taking into account the latest results, the current consensus from OneSpaWorld Holdings' three analysts is for revenues of US$110.7m in 2021, which would reflect a sizeable 444% increase on its sales over the past 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 51% to US$0.93. Before this latest report, the consensus had been expecting revenues of US$109.7m and US$0.49 per share in losses. So it's pretty clear the analysts have mixed opinions on OneSpaWorld Holdings even after this update; although they reconfirmed their revenue numbers, it came at the cost of a considerable increase to per-share losses.
The consensus price target held steady at US$12.00, seemingly implying that the higher forecast losses are not expected to have a long term impact on the company's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic OneSpaWorld Holdings analyst has a price target of US$14.00 per share, while the most pessimistic values it at US$10.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One thing stands out from these estimates, which is that OneSpaWorld Holdings is forecast to grow faster in the future than it has in the past, with revenues expected to display 25x annualised growth until the end of 2021. If achieved, this would be a much better result than the 47% annual decline over the past three years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 11% annually. Not only are OneSpaWorld Holdings' revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Fortunately, they also reconfirmed their revenue numbers, suggesting sales are tracking in line with expectations - and our data suggests that revenues are expected to grow faster than the wider industry. The consensus price target held steady at US$12.00, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for OneSpaWorld Holdings going out to 2023, and you can see them free on our platform here..
That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 4 warning signs with OneSpaWorld Holdings (at least 1 which is potentially serious) , and understanding them should be part of your investment process.
This article by Simply Wall St is general in nature. 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.
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