US$4.61: That's What Analysts Think The ONE Group Hospitality, Inc. (NASDAQ:STKS) Is Worth After Its Latest Results
Investors in The ONE Group Hospitality, Inc. (NASDAQ:STKS) had a good week, as its shares rose 2.3% to close at US$1.79 following the release of its second-quarter results. Revenues were US$200m, with ONE Group Hospitality reporting some 2.1% below analyst expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.
Following last week's earnings report, ONE Group Hospitality's five analysts are forecasting 2026 revenues to be US$810.5m, approximately in line with the last 12 months. Losses are predicted to fall substantially, shrinking 67% to US$1.23. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$840.0m and losses of US$0.95 per share in 2026. So it's pretty clear the analysts have mixed opinions on ONE Group Hospitality after this update; revenues were downgraded and per-share losses expected to increase.
See our latest analysis for ONE Group Hospitality
The consensus price target fell 8.9% to US$4.61, with the analysts clearly concerned about the company following the weaker revenue and earnings outlook. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values ONE Group Hospitality at US$5.25 per share, while the most bearish prices it at US$4.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that ONE Group Hospitality's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 2.5% growth on an annualised basis. This is compared to a historical growth rate of 29% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.5% annually. Factoring in the forecast slowdown in growth, it seems obvious that ONE Group Hospitality is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of ONE Group Hospitality's future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for ONE Group Hospitality going out to 2028, and you can see them free on our platform here.
Don't forget that there may still be risks. For instance, we've identified 2 warning signs for ONE Group Hospitality that you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.