Atour Lifestyle Holdings recently reported its fourth quarter and full-year 2024 earnings, showing a strong increase in net income and revenue despite a decline in sales. The firm anticipates a 25% rise in total net revenues for 2025 and plans to open 500 new hotels during the year. Despite these positive developments, the company’s stock declined by 11% over the last quarter. This decline occurred amidst a broader market downturn, with the Nasdaq sliding by 6%, largely driven by concerns in the tech sector. The broader market environment likely added weight to Atour’s share price movement.
The recent earnings report from Atour Lifestyle Holdings, which indicated robust growth in net income and revenue, aligns with the company’s expansion plans, including opening 500 new hotels in 2025 and a 25% projected rise in total net revenues for the year. However, the stock’s decline of 11% over the last quarter amidst a broader market downturn must be viewed with caution. The broader market factors, such as the Nasdaq’s 6% slide due to tech sector concerns, likely influenced this decline, notwithstanding the company’s positive long-term growth outlook.
Over the past year, Atour’s total shareholder returns, which include share price gains and dividends, reached 29.70%. This strong performance outpaced the likes of the US Hospitality industry, which returned only 1.6% over the same period. Additionally, Atour’s earnings grew 73% over the past year, far exceeding the industry average. This indicates the company’s ability to capitalize on growth opportunities effectively.
The news regarding the company’s earnings, alongside its aggressive growth initiatives, suggests potential upward revisions in revenue and earnings forecasts. Analysts forecast annual revenue growth of 19.4% and an earnings growth rate of 21.5%, driven by expansion in both hotel and retail operations. Despite the stock trading lower recently, the consensus analyst price target stands at US$36.36, reflecting a 33.9% premium over the current share price of US$24.02. This implies a potential upside, highlighting a possible market misalignment with the company’s anticipated growth trajectory.