Atour Lifestyle Holdings Limited Sponsored ADR (ATAT) Hits Fresh High: Is There Still Room to Run?

Core Viewpoint - Atour Lifestyle Holdings Limited Sponsored ADR (ATAT) has shown strong performance, with a 44.9% increase since the beginning of the year, significantly outperforming the Zacks Consumer Discretionary sector and the Zacks Leisure and Recreation Services industry [1][3]. Financial Performance - The company has consistently exceeded earnings expectations, reporting an EPS of $0.42 against a consensus estimate of $0.41 in its last earnings report [2]. - For the current fiscal year, ATAT is projected to achieve earnings of $1.59 per share on revenues of $1.34 billion, reflecting a 23.26% increase in EPS and a 33.57% increase in revenues [3]. - The next fiscal year forecasts earnings of $1.92 per share on revenues of $1.72 billion, indicating year-over-year changes of 21.07% in EPS and 28% in revenues [3]. Valuation Metrics - ATAT currently trades at a valuation of 24.5X current fiscal year EPS estimates, which is above the peer industry average of 20.8X [7]. - The stock's trailing cash flow basis is at 29.3X compared to the peer group's average of 7.9X, and it has a PEG ratio of 1.27 [7]. - The company has a Value Score of D, Growth Score of A, and Momentum Score of C, resulting in a VGM Score of B [6]. Zacks Rank - ATAT holds a Zacks Rank of 1 (Strong Buy), supported by a positive earnings estimate revision trend [8]. - The recommendation suggests that investors should consider stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B, indicating potential for ATAT shares in the near future [9]. Industry Comparison - In comparison, Carnival Corporation (CCL) also shows strong performance with a Zacks Rank of 1 and a Value Score of A, alongside a Growth Score of C and a Momentum Score of D [10]. - CCL is expected to post earnings of $2.40 per share on revenues of $26.64 billion for the current fiscal year, having beaten consensus estimates by 8.33% last quarter [11]. - The Leisure and Recreation Services industry is positioned in the top 25% of all industries, suggesting favorable conditions for both ATAT and CCL [12].