Soho House short report selloff a buying opportunity, says Citi

Citi views the weakness in shares of Soho House following the short report as a buying opportunity. The firm says a conversation with management reinforced its view that the report’s points and view about a “broken business model” could have been made when the company came public in July 2021. The report does not mention that strategic changes have been underway since the fall of 2022, including changing leadership at the CEO and CFO level, narrowing focus on membership growth and experience, heightening focus on improving house level profitability, and moderating unit growth to a more manageable level for profitability, the analyst tells investors in a research note. Citi says 2023 was a year to stabilize the foundation of the business and 2024 should be a year of driving more steady, consistent growth. It keeps a Buy rating on Soho House with an $11 price target.