Investors in Atour Lifestyle Holdings Limited (NASDAQ:ATAT) had a good week, as its shares rose 8.1% to close at US$37.28 following the release of its quarterly results. Results overall were not great, with earnings of CN¥1.01 per share falling drastically short of analyst expectations. Meanwhile revenues hit CN¥2.5b and were slightly better than forecasts. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
After the latest results, the 17 analysts covering Atour Lifestyle Holdings are now predicting revenues of CN¥9.47b in 2025. If met, this would reflect a notable 13% improvement in revenue compared to the last 12 months. Per-share earnings are expected to ascend 11% to CN¥11.13. Before this earnings report, the analysts had been forecasting revenues of CN¥9.36b and earnings per share (EPS) of CN¥11.41 in 2025. So it looks like there’s been a small decline in overall sentiment after the recent results – there’s been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
View our latest analysis for Atour Lifestyle Holdings
The consensus price target held steady at US$41.06, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. There’s another way to think about price targets though, and that’s to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Atour Lifestyle Holdings, with the most bullish analyst valuing it at US$45.00 and the most bearish at US$33.62 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Atour Lifestyle Holdings’ past performance and to peers in the same industry. It’s pretty clear that there is an expectation that Atour Lifestyle Holdings’ revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 29% growth on an annualised basis. This is compared to a historical growth rate of 48% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 10% annually. Even after the forecast slowdown in growth, it seems obvious that Atour Lifestyle Holdings is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. The consensus price target held steady at US$41.06, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn’t be too quick to come to a conclusion on Atour Lifestyle Holdings. Long-term earnings power is much more important than next year’s profits. We have estimates – from multiple Atour Lifestyle Holdings analysts – going out to 2027, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.