On Wednesday, Truist Securities increased its price target for OneSpaWorld Holdings Ltd. (NASDAQ: NASDAQ:OSW) to $17, up from the previous target of $16, while reiterating a Buy rating on the stock. This adjustment reflects the firm's revised financial forecasts for the company, which include a higher expected Adjusted EBITDA and earnings per share (EPS) for the year 2024.
The revised projections from Truist Securities now estimate OneSpaWorld's 2024 Adjusted EBITDA to reach $105.2 million, an increase from the former prediction of $97.8 million. The EPS forecast for the same year has also been adjusted upwards to $0.78 from $0.75. Looking ahead to 2025, the Adjusted EBITDA is anticipated to climb to $111.5 million from the previously forecasted $104.4 million, while the EPS is expected to remain steady at $0.84.
The new price target of $17 is based on an 18.0x multiple of the firm's 2025 EBITDA estimate, which remains unchanged. Truist's positive outlook for OneSpaWorld is supported by several key factors, including strong secular trends in the wellness industry, the introduction of new treatment offerings, shareholder value-enhancing stock buybacks, and the company's increased guidance for 2024.
Additionally, Truist Securities has made adjustments to its calculations regarding passenger capacity growth, which now suggest that 2026 will exhibit stronger annualized growth for OneSpaWorld than 2025. Nonetheless, the firm has chosen to maintain a somewhat conservative stance on the revenue projections for 2025 at this time.
In other recent news, OneSpaWorld Holdings Ltd. has seen a series of positive developments. The company reported a robust Q1 growth for fiscal year 2024, with total revenue increasing by 16% to $211.2 million and a significant rise in net income to $21.2 million. Following this, the company raised its annual outlook, projecting a 10% growth in total revenues and a 12% rise in adjusted EBITDA.
Financial services firm Stifel has subsequently increased its share price target for OneSpaWorld to $22.00, maintaining its Buy rating. This adjustment comes after a series of investor meetings revealing strong key performance indicators for the company. Stifel's analysis suggests that OneSpaWorld's EBITDA guidance for 2024 is likely conservative, leading the firm to raise its own EBITDA estimate for the same year.
Loop Capital also adjusted its outlook for OneSpaWorld, raising the share price target to $17 due to an anticipated revenue growth of 10% for 2025. This revision is based on the expected addition of six new ship launches next year, as disclosed by cruise line companies. InvestingPro Insights
In light of Truist Securities' updated price target for OneSpaWorld Holdings Ltd. (NASDAQ: OSW), let's delve into some InvestingPro Insights to further inform investors. With a market capitalization of $1.55 billion and a notably high P/E ratio of 43.16, OneSpaWorld trades at a premium, reflecting expectations for future growth. This is supported by a robust revenue growth of 28.35% in the last twelve months as of Q1 2024, showcasing the company's strong performance in the wellness sector.
InvestingPro Tips indicate that analysts are optimistic about OneSpaWorld's potential, with 4 analysts revising their earnings upwards for the upcoming period and predicting the company will be profitable this year. Additionally, OneSpaWorld has demonstrated a strong return over the last three months, with a 16.76% price total return, hinting at positive investor sentiment.
For investors seeking more comprehensive analysis, InvestingPro offers additional tips on OneSpaWorld, which can be found at Investing.com/pro/OSW. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and gain access to even more insights to guide investment decisions.
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