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Soho House & Co (SHCO)
NYSE:SHCO
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Soho House & Co
(NYSE:SHCO)
50Neutral
Positive Factors
Cost Management
Management's initiatives around cost savings and member engagement are benefiting in-house spending per member.
Membership Growth
Recent openings in locations like Sao Paulo, Mexico City, and Portland show positive trends in membership growth.
Negative Factors
Leverage Risk
SHCO's lease-adjusted debt is 5.8x 2024 EBITDAR, significantly higher than the average of 3.5x.
Soho House & Co (SHCO) vs. S&P 500 (SPY)
Market Cap
$1.03B
Dividend YieldN/A
Average Volume (3M)454.64K
Price to Earnings (P/E)―
Beta (1Y)1.08
Revenue Growth6.28%
EPS Growth-45.76%
CountryUS
Employees7,852
SectorConsumer Cyclical
Sector Strength60
IndustryTravel Lodging
Share Statistics
EPS (TTM)-0.88
Shares Outstanding52,996,502
10 Day Avg. Volume368,962
30 Day Avg. Volume454,641
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.15
Price to Cash Flow (P/CF)19.30
P/FCF Ratio19.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$9.00Price Target Upside81.45% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Soho House & Co Business Overview & Revenue Model
Company DescriptionSoho House & Co (SHCO) is a global private members' club organization that caters to individuals in the creative industries. Founded in 1995 in London, the company operates a portfolio of clubs, hotels, and restaurants around the world, providing spaces for members to connect, socialize, and collaborate. Known for its exclusive membership and stylish interiors, Soho House offers a variety of services including accommodation, dining, wellness, and event spaces.
How the Company Makes MoneySoho House & Co generates revenue primarily through membership fees paid by its exclusive community of members. These fees provide access to the clubs and their amenities. Additionally, the company earns money from its hospitality services, which include dining and accommodation at its properties. Soho House also leverages its brand by offering a range of retail products, such as home and lifestyle items. Significant partnerships with brands and events also contribute to its revenue streams, enhancing its offerings and attracting a diverse membership base.
Soho House & Co Financial Statement Overview
Summary
Soho House & Co demonstrates mixed financial performance. Revenue growth is promising but overshadowed by profitability issues. High debt levels and negative equity highlight financial risks. Operating cash flow is improving, but negative free cash flow suggests ongoing cash management challenges.Income Statement
Soho House & Co has shown positive revenue growth over the years, with TTM (Trailing-Twelve-Months) revenue increasing by approximately 5% compared to the previous year. However, the company continues to face challenges with profitability, evidenced by negative net profit and EBIT margins. The gross profit margin stands at around 41.3% TTM, indicating a substantial cost structure. Despite revenue growth, the company struggles with operational efficiency, reflected in negative EBITDA and EBIT margins.45
Neutral
Balance Sheet
The balance sheet shows a concerning financial structure with a high debt level leading to a negative stockholders' equity, resulting in an undefined debt-to-equity ratio. The company's liabilities exceed its assets, marking significant financial risk. Return on Equity (ROE) is not calculable due to negative equity, highlighting a critical area of concern. The equity ratio is negative, reflecting the potential risk of insolvency.30
Negative
Cash Flow
Soho House & Co has improved its operating cash flow in the TTM compared to previous years, with a significant increase from the annual report. However, free cash flow remains negative due to high capital expenditures. The operating cash flow to net income ratio is positive, indicating better cash generation relative to earnings, though free cash flow to net income remains negative, signaling cash flow challenges.50
Neutral
| Breakdown | |||||
| TTM | Dec 2023 | Mar 2023 | Mar 2022 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.19B | 1.14B | 972.21M | 560.55M | 384.38M | 642.03M | Gross Profit |
| 492.88M | 546.52M | 447.29M | 251.71M | 164.34M | 60.46M | EBIT |
| -10.49M | -23.00M | -147.48M | -188.03M | -154.73M | -38.49M | EBITDA |
| 92.03M | 85.98M | -43.22M | -98.87M | -88.46M | 18.65M | Net Income Common Stockholders |
| -136.73M | -117.95M | -220.58M | -326.40M | -232.71M | -127.74M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 235.10M | 162.98M | 183.61M | 213.71M | 55.24M | 56.31M | Total Assets |
| 2.37B | 2.54B | 2.47B | 2.38B | 2.10B | 1.96B | Total Debt |
| 2.02B | 2.31B | 2.12B | 1.90B | 2.03B | 1.75B | Net Debt |
| 1.78B | 2.15B | 1.94B | 1.69B | 1.98B | 1.70B | Total Liabilities |
| 2.35B | 2.69B | 2.48B | 2.20B | 2.48B | 2.00B | Stockholders Equity |
| 14.86M | -158.37M | -22.44M | 176.13M | -432.42M | 14.70M |
| Cash Flow | Free Cash Flow | ||||
| -7.24M | -35.92M | -80.72M | -230.50M | -177.67M | -163.98M | Operating Cash Flow |
| 82.13M | 49.81M | 14.68M | -127.42M | -38.23M | -2.28M | Investing Cash Flow |
| -78.67M | -84.21M | -94.14M | -119.14M | -139.87M | -210.78M | Financing Cash Flow |
| -22.13M | 4.91M | 52.84M | 408.16M | 179.70M | 196.96M |
Soho House & Co Technical Analysis
Negative
4.96
Price Trends
6.92
Negative
6.57
Negative
5.99
Negative
Market Momentum
-0.15
Negative
44.91
Neutral
20.59
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SHCO, the sentiment is Negative. The current price of 4.96 is below the 20-day moving average (MA) of 6.22, below the 50-day MA of 6.92, and below the 200-day MA of 5.99, indicating a bearish trend. The MACD of -0.15 indicates Negative momentum. The RSI at 44.91 is Neutral, neither overbought nor oversold. The STOCH value of 20.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SHCO.
Soho House & Co Risk Analysis
Soho House & Co disclosed 69 risk factors in its most recent earnings report. Soho House & Co 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
Soho House & Co Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $5.13B | 20.14 | 38.12% | 6.46% | 3.57% | 13.75% | |
63 Neutral | $3.12B | 68.12 | 2.43% | ― | 25.21% | -83.25% | |
61 Neutral | $7.79B | 45.15 | -79.88% | ― | 10.30% | 23.45% | |
59 Neutral | $1.89B | 9.69 | 9.04% | 5.83% | 5.08% | -10.62% | |
59 Neutral | $10.97B | 9.83 | -1.56% | 4.06% | 1.31% | -16.49% | |
50 Neutral | $1.03B | ― | 49.70% | ― | 6.28% | -45.76% | |
44 Neutral | $2.19B | ― | -10.27% | ― | 3.38% | 38.18% |
* Consumer Cyclical Sector Average
Performance Comparison
SHCO
Soho House & Co
4.96
-0.68
-12.06%
VAC
Marriott Vacations Worldwide Corporation
50.86
-45.64
-47.30%
PENN
Penn National Gaming
13.75
-3.18
-18.78%
MTN
Vail Resorts
131.42
-89.09
-40.40%
PLNT
Planet Fitness
90.58
26.96
42.38%
HGV
Hilton Grand Vacations
31.80
-13.18
-29.30%
Soho House & Co Earnings Call Summary
Earnings Call Date: Mar 31, 2025 | % Change Since: -19.74% | Next Earnings Date: May 9, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong membership growth and operational improvements. However, financial misstatements, reduced guidance, and external challenges such as natural disasters impacted the company's financial outlook. The sentiment is balanced between positive membership and operational highlights and significant financial and environmental lowlights.Highlights
Strong Membership Growth
Membership revenues increased 17% year-on-year and 5% quarter-on-quarter, with 4,000 new Soho House members, reaching approximately 208,000 members globally.
Total Revenue Growth
Total revenues grew 14% year-on-year to $333 million, driven by membership growth and improved spend per visit.
Adjusted EBITDA Improvement
Q3 adjusted EBITDA was $48 million, showing a 38% increase year-on-year, with margins improving approximately 250 basis points year-over-year.
Successful Opening of New Locations
Scorpios, Mykonos had a record-breaking season, and a new location opened in Bodrum. Soho Mews House opened in London with positive reception.
Operational Improvements
Focus on operational excellence with improvements in food and beverage margins and RevPAR up 5% year-over-year.
Lowlights
Lowered Revenue and EBITDA Guidance
Total revenue guidance lowered to around $1.2 billion and adjusted EBITDA guidance reduced to approximately $140 million due to weaker demand in food and beverage and accommodations.
Choppy Revenue Environment
In October, in-house revenue saw the weakest month for like-for-like year-over-year growth, with a mid-single-digit decline.
Financial Misstatements
Revisions made to financial statements from 2022 through the first half of 2024 due to misstatements found in prior period financial statements.
Impact of Natural Disasters
Operations affected by significant flooding at Soho-FarmHouse and recent Malibu fires, leading to temporary closures.
Increased Costs and Investments
Ongoing costs associated with ERP implementation and consulting fees, impacting current financial performance.
Company Guidance
During the Soho House & Co Q3 2024 earnings call, guidance was provided with several key metrics highlighted. Membership revenues increased by 17% year-on-year to $107 million, contributing to total revenues of $333 million, a 14% increase from the previous year. The company achieved an adjusted EBITDA of $48 million, marking a 38% growth year-on-year, although slightly below expectations, with margins improving by approximately 250 basis points. House level contribution rose by 17%, with margins up 150 basis points. Despite these gains, the company adjusted its total revenue guidance to around $1.2 billion, down from the previous range of $1.2 billion to $1.25 billion, due to weaker-than-expected demand in food, beverage, and accommodation segments. Adjusted EBITDA guidance was also revised to approximately $140 million, citing unique factors impacting results. Net debt was reported at $686 million, with a reduction in net debt to adjusted EBITDA ratio to 5x.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.