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OneSpaWorld Holdings Ltd (OSW)
NASDAQ:OSW
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OneSpaWorld Holdings
(NASDAQ:OSW)
74Outperform
Positive Factors
Demand and Growth
OSW continues to see strong demand without any notable changes in the level of discounting.
Financial Performance
Robust onboard services demand drove revenue above street expectations with management noting consumers continue to spend on services.
Management and Strategy
Management has beat and raised guidance each of the last seven quarters.
Negative Factors
Economic Environment
FY25 guide was noisy with plenty of conservatism given an uncertain global macro backdrop.
Revenue Pressure
The majority of FY25 new ships are scheduled to come online in the back half of the year, which will pressure the first half of the year's revenue.
OneSpaWorld Holdings (OSW) vs. S&P 500 (SPY)
Market Cap
$1.65B
Dividend Yield0.76%
Average Volume (3M)1.42M
Price to Earnings (P/E)22.7
Beta (1Y)1.06
Revenue Growth12.72%
EPS GrowthN/A
CountryUS
Employees5,191
SectorConsumer Cyclical
Sector Strength55
IndustryLeisure
Share Statistics
EPS (TTM)0.69
Shares Outstanding104,667,244
10 Day Avg. Volume1,583,521
30 Day Avg. Volume1,415,942
Financial Highlights & Ratios
PEG Ratio0.00611
Price to Book (P/B)N/A
Price to Sales (P/S)2.05
Price to Cash Flow (P/CF)27.70
P/FCF Ratio34.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$23.75Price Target Upside50.60% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
OneSpaWorld Holdings Business Overview & Revenue Model
Company DescriptionOneSpaWorld Holdings Limited operates health and wellness centers onboard cruise ships and at destination resorts worldwide. Its health and wellness centers offer services, such as traditional body, salon, and skin care services and products; self-service fitness facilities, specialized fitness classes, and personal fitness training; pain management, detoxifying programs, and body composition analyses; weight management programs and products; and medi-spa services. The company also provides its guests access to beauty and wellness brands, including ELEMIS, Kérastase, and Dysport, with various brands offered exclusively in the cruise market. As of December 31, 2021, it offered health, wellness, fitness, beauty services, treatments, and products onboard 170 cruise ships and at 52 destination resorts. The company is based in Nassau, Bahamas.
How the Company Makes MoneyOneSpaWorld Holdings makes money through its extensive network of health and wellness centers located primarily on cruise ships and at destination resorts. The company generates revenue by providing various spa and beauty services to passengers and guests. Key revenue streams include direct sales from spa treatments, fitness classes, and beauty services; retail sales of beauty and wellness products; and partnerships with cruise lines and resort operators. These partnerships are significant, as they often involve revenue-sharing agreements where OneSpaWorld benefits from exclusive operating rights in exchange for sharing a portion of their earnings with their partners. Additionally, the company leverages its brand and expertise to attract a steady flow of clients, capitalizing on the growing trend of wellness tourism.
OneSpaWorld Holdings Financial Statement Overview
Summary
OneSpaWorld Holdings has shown significant revenue growth and improved profitability. The balance sheet is strong with no debt, and cash flow is robust, indicating financial stability and operational efficiency. However, past losses are a concern for long-term performance.Income Statement
OneSpaWorld Holdings has shown significant revenue growth with an impressive revenue growth rate of 12.72% from 2023 to 2024. The gross profit margin improved to 14.80%, and the net profit margin turned positive at 8.14% in 2024, indicating improved profitability. EBIT and EBITDA margins also strengthened, demonstrating enhanced operational efficiency. However, prior years showed periods of losses, which should be considered when evaluating long-term performance.78
Positive
Balance Sheet
The company's balance sheet shows strong equity with an equity ratio of 74.28%. The absence of total debt in 2024 is a significant positive shift from previous years and reduces leverage risk. Return on Equity (ROE) increased to 13.14%, reflecting efficient use of equity to generate profits. However, the stability of equity growth and the ability to maintain low debt levels should be monitored.75
Positive
Cash Flow
OneSpaWorld Holdings has demonstrated strong cash flow improvements with a free cash flow growth rate of 24.31% from 2023 to 2024. The operating cash flow to net income ratio is strong at 1.08, indicating robust cash generation relative to net income. The positive free cash flow to net income ratio of 0.99 further supports the company's liquidity position. Continued positive cash flow trends would enhance financial flexibility.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 895.02M | 794.04M | 546.26M | 144.03M | 120.92M | Gross Profit |
| 132.89M | 90.23M | 83.57M | 8.45M | -18.31M | EBIT |
| 78.06M | 54.17M | 15.14M | -52.06M | -265.00M | EBITDA |
| 111.18M | 42.42M | 37.49M | -32.14M | -246.62M | Net Income Common Stockholders |
| 72.86M | -2.97M | 53.16M | -68.52M | -280.49M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 57.44M | 27.70M | 32.06M | 30.94M | 41.55M | Total Assets |
| 746.42M | 706.14M | 717.43M | 688.87M | 702.28M | Total Debt |
| 112.74M | 170.63M | 227.13M | 230.46M | 229.43M | Net Debt |
| 55.30M | 142.92M | 195.06M | 199.52M | 187.88M | Total Liabilities |
| 191.93M | 272.07M | 351.63M | 394.96M | 276.75M | Stockholders Equity |
| 554.50M | 434.07M | 365.81M | 293.90M | 425.53M |
| Cash Flow | Free Cash Flow | |||
| 72.06M | 57.96M | 19.94M | -37.97M | -38.68M | Operating Cash Flow |
| 78.80M | 63.38M | 24.76M | -35.10M | -36.55M | Investing Cash Flow |
| -6.74M | -5.42M | -4.83M | -2.87M | -2.13M | Financing Cash Flow |
| -42.21M | -62.66M | -18.72M | 27.47M | 68.55M |
OneSpaWorld Holdings Technical Analysis
Negative
15.77
Price Trends
19.28
Negative
19.35
Negative
17.70
Negative
Market Momentum
-0.61
Negative
37.72
Neutral
24.99
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OSW, the sentiment is Negative. The current price of 15.77 is below the 20-day moving average (MA) of 17.21, below the 50-day MA of 19.28, and below the 200-day MA of 17.70, indicating a bearish trend. The MACD of -0.61 indicates Negative momentum. The RSI at 37.72 is Neutral, neither overbought nor oversold. The STOCH value of 24.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for OSW.
OneSpaWorld Holdings Risk Analysis
OneSpaWorld Holdings disclosed 31 risk factors in its most recent earnings report. OneSpaWorld Holdings reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
OneSpaWorld Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $56.01B | 19.03 | 46.85% | 0.90% | 18.60% | 65.95% | |
74 Outperform | $1.65B | 22.71 | 14.74% | 0.76% | 12.72% | ― | |
71 Outperform | $674.68M | 9.77 | 17.85% | ― | -31.46% | -56.72% | |
66 Neutral | $25.15B | 13.33 | 25.87% | ― | 12.66% | 403.58% | |
63 Neutral | $3.47B | 81.11 | 2.43% | ― | 25.21% | -83.25% | |
59 Neutral | $2.18B | 11.18 | 9.04% | 5.47% | 5.08% | -10.62% | |
59 Neutral | $12.18B | 11.09 | -1.08% | 3.77% | 1.26% | -19.82% |
* Consumer Cyclical Sector Average
Performance Comparison
OSW
OneSpaWorld Holdings
15.77
3.07
24.17%
CCL
Carnival
17.28
2.22
14.74%
VAC
Marriott Vacations Worldwide Corporation
56.62
-39.56
-41.13%
RCL
Royal Caribbean
188.65
54.71
40.85%
HGV
Hilton Grand Vacations
34.48
-10.71
-23.70%
TH
Target Hospitality
6.72
-4.19
-38.41%
OneSpaWorld Holdings Earnings Call Summary
Earnings Call Date: Feb 19, 2025 | % Change Since: -30.80% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance and strategic growth through new partnerships and expansion. Despite some challenges in Q1 2025 due to external factors such as dry docks and a leap year, the company's outlook remains positive with expectations of another record year in 2025.Highlights
Record Revenue and Growth in Fiscal Year 2024
Total revenues increased 13% to a record $895 million compared to $794 million in fiscal year 2023. Income from operations increased 44% to $78.1 million compared to $54.2 million in fiscal year 2023. Adjusted EBITDA increased 26% to a record $112.1 million compared to $89.2 million in fiscal year 2023.
Expansion and New Partnerships
The company added seven new maritime health and wellness centers, including five new ship builds, and entered a new seven-year agreement with Royal Caribbean International and Celebrity Cruises.
Medi-Spa Revenue Growth
Same spa revenue for Medi-Spa services increased more than 30% year-over-year. The number of ships offering Medi-Spa services increased to 147, with plans to expand to 151 ships.
Strong Balance Sheet and Capital Structure
Debt reduced to $100 million, with $58.6 million in cash. A share repurchase program and quarterly dividend payments were initiated.
Lowlights
Impact of Dry Docks and Leap Year on Q1 2025 Revenue
Q1 2025 revenue expected to be negatively impacted by $4.3 million due to 1 less operating day from the leap year and a higher number of dry docks.
Company Guidance
In the OneSpaWorld Fourth Quarter 2024 earnings call, Leonard Fluxman, the Executive Chairman, CEO, and President, provided a robust outlook for fiscal year 2025, affirming the company's guidance for continued growth. The company reported a 13% increase in total revenues for fiscal year 2024, reaching a record $895 million, and a 26% rise in adjusted EBITDA to $112.1 million. For the fourth quarter alone, revenues increased by 11% to $217.2 million, and adjusted EBITDA grew by 14% to $26.7 million. Operating on 199 ships at year-end, the company saw advancements in its strategic priorities, including expanding its Medi-Spa services now available on 147 ships, with plans to increase this to 151 ships. The guidance for fiscal 2025 anticipates total revenue between $950 million to $970 million and adjusted EBITDA ranging from $115 million to $125 million, alongside the addition of nine new maritime health and wellness centers. The company emphasized its strong financial position, highlighted by a reduction in debt to $100 million and maintaining liquidity of $108.6 million.OneSpaWorld Holdings Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
OneSpaWorld Holdings Announces Leadership Changes in 2025
Neutral
Mar 17, 2025
On March 17, 2025, OneSpaWorld Holdings announced leadership changes with Stephen B. Lazarus appointed as President while retaining his roles as Chief Financial Officer and Chief Operating Officer until a new CFO is appointed. Leonard Fluxman will continue as CEO and Executive Chairman, and Susan Bonner will step down as Chief Commercial Officer. These transitions highlight the company’s focus on leadership development and its commitment to maintaining its strong market position and growth trajectory in the health and wellness industry.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.