Holmes Place (HLMS) AI Stock Analysis

• Market Cap: ₪721.97M
• Dividend Yield: 5.3%
• Average Volume (3M): 389.59K
• Price to Earnings (P/E): 21.1
• Beta (1Y): 0.39
• Revenue Growth: 7.70%
• EPS Growth: -34.56%
• Country: IL
• Employees: 221
• Sector: Services
• Sector Strength: N/A
• Industry: Leisure
• EPS (TTM): 6.00
• Shares Outstanding: 101,586,320
• 10 Day Avg. Volume: 655,029
• 30 Day Avg. Volume: 389,591
• PEG Ratio: 0.80
• Price to Book (P/B): 4.06
• Price to Sales (P/S): 0.91
• P/FCF Ratio: 4.94
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 67 Neutral
• Price Target: 817.00 ▲(18.39% Upside)

The score is mainly driven by solid operating performance but offset by balance-sheet risk from very high leverage and mixed cash flow trends. Technicals are supportive with the stock in an uptrend, though elevated RSI suggests limited near-term upside. Valuation is balanced: a strong dividend yield helps, while the P/E remains moderate.

Positive Factors

Strong EBIT and EBITDA margins

Sustained high EBIT and EBITDA margins demonstrate structural operational efficiency in Holmes Place’s premium club model. Durable margins support reinvestment in facilities and services, fund customer experience, and provide a buffer against revenue volatility in the leisure sector.

Consistent revenue growth

Steady revenue expansion reflects recurring membership-driven sales and resilient demand for premium wellness services. This predictable revenue base supports long-term planning, cross-selling of add-on services, and gradual geographic or service expansion without relying on volatile one-off transactions.

Healthy cash conversion ratios

Strong cash conversion from earnings indicates the business generates real cash from operations, supporting dividends, maintenance capex, and working capital needs. Reliable conversion reduces refinancing frequency and underpins operational resilience despite cyclical leisure demand.

Negative Factors

Very high leverage

Extremely high debt-to-equity creates persistent financial risk: elevated interest costs, constrained strategic flexibility, and vulnerability to rate increases or refinancing stress. Over the medium term this limits investment optionality and raises default/credit-event exposure.

Sharply negative free cash flow growth

A steep decline in free cash flow growth materially weakens the firm’s ability to pay down debt, fund capex, or sustain distributions. If persistent, this trend forces reliance on external financing or asset sales, undermining long-term financial stability and strategic execution.

Declining net profit margin

A falling net margin signals pressure on ultimate profitability despite healthy gross and operating margins. Sustained margin compression reduces retained earnings for growth, weakens return on capital, and heightens sensitivity to cost inflation or competitive pricing moves.

Holmes Place Business Overview & Revenue Model

Company Description

Holmes Place International Ltd manages and operates health and fitness clubs under the Holmes Place and Go Active brands. The company was founded in 1979 and is based in Caesarea, Israel. Holmes Place International Ltd is a subsidiary of Holmes Place Group.

How the Company Makes Money

Holmes Place generates revenue primarily through membership fees, which provide access to their fitness facilities and services. Additional income is derived from personal training sessions, specialized fitness programs, and group classes that require separate charges. The company also earns from spa and wellness services, including massage and beauty treatments. Merchandise sales, such as fitness apparel and nutritional products, further contribute to revenue. Strategic partnerships with health and wellness brands can also enhance earnings through promotional activities and co-branded offerings.

Holmes Place Financial Statement Overview

Summary

Income statement strength (score 78) is supported by solid EBIT/EBITDA margins, but the balance sheet is a key risk (score 55) due to very high leverage (debt-to-equity 11.90). Cash flow is mixed (score 62) with sharply negative free cash flow growth despite reasonable cash conversion.

Income Statement

Holmes Place has shown consistent revenue growth over the years, with a TTM revenue growth rate of 1.004%. The gross profit margin has remained stable, though slightly declining from 25.95% to 25.29% in TTM. The net profit margin has decreased to 6.08% in TTM, indicating some pressure on profitability. However, the EBIT and EBITDA margins remain strong at 16.69% and 38.64% respectively, showcasing operational efficiency.

Balance Sheet

The company exhibits high leverage with a debt-to-equity ratio of 11.90 in TTM, which poses a risk. Despite this, the return on equity is robust at 31.49%, indicating effective use of equity to generate profits. The equity ratio is relatively low, reflecting the high reliance on debt financing.

Cash Flow

Holmes Place's cash flow performance is mixed. The free cash flow growth rate is negative at -111.7% in TTM, indicating a decline in free cash flow generation. However, the operating cash flow to net income ratio is healthy at 0.64, suggesting good cash conversion from earnings. The free cash flow to net income ratio is also reasonable at 0.52.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	578.77M	552.22M	508.51M	461.19M	311.06M	196.34M
Gross Profit	145.80M	143.32M	133.49M	106.44M	24.78M	-42.59M
EBITDA	226.27M	213.94M	192.81M	165.71M	103.24M	48.79M
Net Income	30.73M	46.50M	40.06M	31.71M	-21.81M	-78.88M
Balance Sheet
Total Assets	1.55B	1.38B	1.27B	1.24B	994.37M	1.05B
Cash, Cash Equivalents and Short-Term Investments	45.28M	27.31M	16.79M	53.34M	18.39M	50.41M
Total Debt	1.24B	1.12B	1.02B	990.89M	817.86M	842.11M
Total Liabilities	1.37B	1.26B	1.14B	1.12B	914.37M	949.66M
Stockholders Equity	177.26M	124.38M	121.47M	123.49M	81.66M	102.14M
Cash Flow
Free Cash Flow	89.97M	102.00M	92.24M	99.65M	23.16M	18.55M
Operating Cash Flow	175.01M	167.55M	142.81M	124.60M	43.56M	35.71M
Investing Cash Flow	-89.83M	-71.84M	-54.05M	-34.56M	-17.93M	-24.95M
Financing Cash Flow	-53.04M	-84.90M	-125.16M	-55.12M	-57.65M	17.77M

Holmes Place Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 690.10
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IL:HLMS, the sentiment is Negative. The current price of 690.1 is below the 20-day moving average (MA) of 703.12, below the 50-day MA of 691.16, and below the 200-day MA of 704.10, indicating a neutral trend. The MACD of 5.69 indicates Positive momentum. The RSI at 45.52 is Neutral, neither overbought nor oversold. The STOCH value of 20.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IL:HLMS.

Holmes Place Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NTO	72 Outperform	₪960.62M	12.70	―	―	8.20%	-12.69%
HLMS	67 Neutral	₪721.97M	21.15	―	5.30%	7.70%	-34.56%
GLRS	56 Neutral	₪563.47M	8.96	―	6.97%	―	―
Sector *	55 Neutral	$13.29B	17.42	10.03%	0.93%	7.13%	-12.93%
MTRN	49 Neutral	₪397.92M	-3.54	―	9.81%	-14.49%	-398.74%