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OneSpaWorld Holdings Ltd (OSW)
NASDAQ:OSW
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OneSpaWorld Holdings
(NASDAQ:OSW)
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Rating:72Outperform
Price Target:
$24.00
▲(7.77% Upside)
Action:ReiteratedDate:02/24/26
The score is driven primarily by improved fundamentals (revenue scale recovery, profitability, and positive cash generation) and a constructive earnings outlook with reaffirmed >$1B revenue guidance. Technicals are supportive with price above key averages and positive momentum. The main constraint is valuation, with a high P/E and modest dividend yield, alongside watch items around 2025 margin compression and softer free cash flow versus 2024.
Positive Factors
Revenue scale recovery
A sustained post‑pandemic revenue recovery to $961M demonstrates restored demand and scale across cruise and resort channels. This larger revenue base improves operating leverage, supports reinvestment in high‑growth offerings, and underpins the company’s ability to reach >$1B guidance, a durable structural gain.
Improving balance sheet
Material leverage improvement and a strengthened balance sheet increase financial flexibility for fleet rollouts, Medi‑Spa installs and buybacks. Lower indebtedness reduces refinancing risk, supports continued capital returns, and gives management optionality to invest in productivity initiatives without stressing liquidity.
Market position & tech-driven expansion
Broad cruise footprint, accelerating Medi‑Spa adoption and rapid AI rollouts create durable competitive advantages: better guest experiences, higher per‑passenger spend, and scalable revenue channels. Tech‑enabled pricing and virtual assistants strengthen distribution and margin potential over multiple itineraries.
Negative Factors
Margin compression
Sharp gross‑ and net‑margin deterioration indicates rising cost or mix pressure that can persist absent structural fixes. Sustained margin compression would erode cash generation and limit funding for growth, materially affecting long‑run profitability even if top line expands modestly.
Free cash flow softness
A drop in FCF amid revenue growth points to reinvestment or working‑capital inefficiencies. If persistent, weaker cash conversion reduces funds available for debt paydown, capex, and buybacks, constraining strategic flexibility and making the company more sensitive to cyclical downturns in travel demand.
Strategic exits and restructuring costs
Exiting Asian land‑based ops reduces geographic diversification and recurring revenue streams by ~ $23M, and restructuring/impairments create execution risk. While strategic, these moves concentrate exposure to cruise partners and require careful redeployment to avoid longer‑term revenue volatility.
OneSpaWorld Holdings (OSW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.22B
Dividend Yield0.79%
Average Volume (3M)1.35M
Price to Earnings (P/E)31.7
Beta (1Y)1.07
Revenue Growth7.27%
EPS Growth45.12%
CountryUS
Employees5,191
SectorConsumer Cyclical
Sector Strength84
IndustryLeisure
Share Statistics
EPS (TTM)0.24
Shares Outstanding101,451,280
10 Day Avg. Volume2,925,607
30 Day Avg. Volume1,353,420
Financial Highlights & Ratios
PEG Ratio-20.92
Price to Book (P/B)3.94
Price to Sales (P/S)2.23
P/FCF Ratio31.27
Enterprise Value/Market Cap1.04
Enterprise Value/Revenue2.40
Enterprise Value/Gross Profit17.28
Enterprise Value/Ebitda20.39
Forecast
1Y Price Target
$25.67Price Target Upside15.25% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)1.12
Revenue Forecast (FY)$1.02B
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 generates revenue primarily through service fees charged for its spa and wellness services offered on cruise ships and at resort locations. The company’s revenue model includes direct payments from customers for individual treatments and packages, as well as revenue-sharing agreements with cruise lines and resorts. Key revenue streams include massage services, skincare treatments, fitness programs, and product sales. Additionally, strong partnerships with major cruise lines and resorts enhance its market reach and customer base, contributing significantly to its earnings. The company also benefits from the growing demand for wellness tourism, which has further bolstered its financial performance.
OneSpaWorld Holdings Earnings Call Summary
Earnings Call Date:Feb 18, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 06, 2026
Earnings Call Sentiment Positive
The call communicated strong operating momentum and financial performance — record Q4, double‑digit growth in several adjusted metrics, fleet and Medi‑Spa expansion, meaningful AI deployments, and bullish >$1B 2026 revenue guidance. The company also completed substantial capital returns and reduced net debt. Negative items were limited to one‑time restructuring charges and asset impairments tied to the strategic exit of Asian land‑based operations, a dip in GAAP net income for the quarter, and some increased costs tied to higher service/product activity. Overall the positives (growth, margin expansion on adjusted basis, clear roadmap for AI and dynamic pricing, balance sheet progress and shareholder returns) materially outweigh the transitory negatives.Q4-2025 Updates
Positive Updates
Record Q4 Performance and Double‑Digit Growth
Total revenue for Q4 increased 11% year-over-year to $242.1M (vs. $217.2M). Adjusted EBITDA for Q4 rose to $31.2M from $26.7M (approximately +16.9%). Adjusted net income for Q4 increased to $24.3M from $21.4M (approximately +13.6%).
Full‑Year Strength — Revenue, EBITDA and Adjusted Net Income Growth
Fiscal 2025 total revenue was $961M, up 7% from $895M a year earlier. Adjusted EBITDA for the year increased 10% to $123.3M (from $112.1M). Adjusted net income rose 15% to $102.9M (from $89.7M).
Fleet and Service Expansion
At year-end the company operated health & wellness centers on 206 ships (average ship count 199 for the quarter vs. 188 in fiscal 2024). Introduced 2 new centers in Q4 (Disney Destiny and Star Seeker) and 8 ship builds for the year. Management expects 6 new ship builds in 2026 (3 beginning voyages in H1).
Medi‑Spa Adoption and High Growth Technologies
Medi‑Spa services were available on 153 ships at year-end (up from 147). Adoption of next‑generation technologies (Thermage FLX, CoolSculpting Elite, Acupuncture LED) generated between 23% and 40% revenue growth in Q4 versus the prior year for those technologies. Company expects Medi‑Spa on ~157 ships by year‑end 2026.
Operational Metrics & Workforce Improvements
Key operating metrics improved across the board including revenue per passenger per day, weekly revenue, pre‑cruise revenue and revenue per staff per day. Cruise ship personnel increased to 4,582 from 4,352 year‑over‑year. Staff retention improved by 4 percentage points versus 2024, supporting higher revenue per experienced staffer.
AI & Productivity Initiatives
Deployment of an onboard virtual assistant expanded to 180 vessels (up from 40 in Q3); the assistant answers ~80% of questions within seconds. Company implemented ML/algorithmic revenue tools and is building a dynamic price optimization model for prebooking (over 11,500 itineraries open for prebooking). Initial AI benefits are encouraging; current 2026 guidance does not include incremental AI upside.
Strong Capital Allocation and Balance Sheet Actions
Returned nearly $93M to shareholders during the year (dividends and buybacks). Repurchased $75.4M for ~3.9M common shares and paid $15M on term loan. Total cash at year‑end $17.5M, full $50M revolver available (total liquidity $67.5M). Total debt (net) decreased to $84M from $98.6M. $37.5M remains under prior $75M repurchase authorization.
Confident 2026 Guidance (Revenue > $1B)
Reaffirmed fiscal 2026 guidance calling for total revenues of $1.01B–$1.03B (first time expected to exceed $1B) and adjusted EBITDA of $128M–$138M — both described as high single‑digit increases at the midpoint vs. fiscal 2025 (guidance excludes exited/reorganized operations). Q1 2026 revenue expected $241M–$246M; Q1 adjusted EBITDA $30M–$32M.
Revenue Drivers Called Out
Management quantified Q4 revenue drivers: fleet expansion from 2025 new ship builds contributed $15.5M, a 2% increase in revenue days contributed $8.7M, and a 1% increase in average guest spend contributed $2.1M to the Q4 revenue increase.
Negative Updates
Restructuring Charges and Asset Impairments
Q4 restructuring expenses totaled $2.7M driven by reorganization in the U.K. and Italy and exit of land‑based operations in Asia. Long‑lived asset impairment was $3.0M in Q4 (including a $2.8M impairment related to exiting resort operations in Asia: $2.2M intangible and $0.6M property/equipment/right‑of‑use).
Net Income Decline (GAAP) in Q4
GAAP net income for Q4 was $12.1M (diluted EPS 12p) versus $14.4M (14p) in prior year — a decline of approximately 16% year‑over‑year, primarily driven by restructuring expenses and impairments totaling $5.7M (partially offset by a $4.4M improvement in operating income).
Exit of Asian Land‑Based Operations and Impact on Destination Resorts
Company exited land‑based health & wellness centers in Asia; Q4 saw a $1.3M decrease in destination resorts revenue partly attributable to hotel closures where the company formerly operated. There was also a $0.3M nonrecurring inventory write‑off related to the Asia exit.
Rising Cost of Services and Product Costs
Cost of services increased $18.5M in Q4 attributable to a $21.5M increase in service revenues year‑over‑year. Cost of product rose $3.4M; freight increased by $0.3M. These increases contributed to higher operating costs even as revenue grew.
Guidance Excludes AI Upside
Management stated that current 2026 guidance does not factor in potential incremental benefits from AI and dynamic pricing initiatives, meaning expected future margin / revenue upside from these programs is not included in the reaffirmed targets.
Relatively Low Year‑End Cash Balance
Year‑end cash was $17.5M after returning capital to shareholders (dividends and buybacks). While liquidity including revolver was $67.5M, the modest cash balance highlights the impact of capital return and buybacks on available cash.
Company Guidance
OneSpaWorld reaffirmed fiscal 2026 guidance, forecasting total revenues of $1.01–$1.03 billion (the first time above $1.0B) and adjusted EBITDA of $128–$138 million, each representing high-single-digit increases at the midpoint versus fiscal 2025 (FY25: $961.0M revenue; adjusted EBITDA $123.3M; adjusted net income $102.9M, or 99p per diluted share); for Q1 2026 the company expects revenue of $241–$246M and adjusted EBITDA of $30–$32M, noting that exited/reorganized operations contributed $5.3M to Q1 2025 and $23M to FY25 and are excluded from guidance — year-end liquidity was $67.5M (cash $17.5M plus $50M revolver availability), total debt, net, was $84.0M, and management expects to continue dividends and share repurchases (remaining repurchase authorization $37.5M) while prioritizing debt reduction.OneSpaWorld Holdings Financial Statement Overview
Summary
Financials show a strong post‑pandemic recovery with revenue up to $961M in 2025 and sustained profitability in 2024–2025, plus solid operating cash flow (~$84M) and free cash flow (~$68M). Offsetting this, 2025 showed notable margin compression and free cash flow declined versus 2024, indicating some efficiency/working-capital pressure.Income Statement
Revenue rebounded sharply from 2022–2025 (from $546M to $961M), but growth slowed materially in 2025 versus 2024. Profitability is solid with positive operating and net margins in 2024–2025, yet 2025 shows clear margin compression (gross margin down to ~11% from ~17% in 2024; net margin down to ~7.5% from ~8.1%). The company has largely normalized after pandemic-era losses (2020–2021) and a small 2023 net loss, but the recent margin step-down is the main watch item.72
Positive
Balance Sheet
Leverage improved meaningfully over time, with debt-to-equity declining from ~0.78 (2021) to ~0.20 (2024), and 2025 reported with zero debt, which materially strengthens financial flexibility. Equity has expanded versus 2021–2022, supporting the balance sheet. A key weakness is inconsistent shareholder return: return on equity was negative in 2020–2021 and again in 2023, and 2025 return on equity is reported as 0.0 despite strong net income, which creates some uncertainty around the reported ratio quality/consistency.78
Positive
Cash Flow
Cash generation is consistently positive since 2022, with operating cash flow rising to ~$84M in 2025 and free cash flow of ~$68M. Cash conversion is generally good: in 2025 operating cash flow exceeded net income (about 1.16x), though free cash flow was lower than net income (about 0.82x), indicating some reinvestment or working-capital drag versus accounting earnings. The main weakness is that free cash flow declined in 2025 versus 2024 despite higher revenue, suggesting efficiency/working-capital pressure that bears monitoring.74
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 961.00M | 895.02M | 794.04M | 546.26M | 144.03M |
| Gross Profit | 105.55M | 149.46M | 127.04M | 83.57M | 8.45M |
| EBITDA | 106.62M | 111.18M | 38.94M | 91.89M | -32.14M |
| Net Income | 71.62M | 72.86M | -2.97M | 53.16M | -68.52M |
Balance Sheet | |||||
| Total Assets | 707.10M | 746.42M | 706.14M | 717.43M | 688.87M |
| Cash, Cash Equivalents and Short-Term Investments | 16.31M | 57.44M | 27.70M | 32.06M | 30.94M |
| Total Debt | 102.77M | 112.74M | 170.63M | 227.13M | 230.46M |
| Total Liabilities | 164.52M | 191.93M | 272.07M | 351.63M | 394.96M |
| Stockholders Equity | 542.58M | 554.50M | 434.07M | 365.81M | 293.90M |
Cash Flow | |||||
| Free Cash Flow | 68.45M | 72.06M | 57.96M | 19.94M | -37.97M |
| Operating Cash Flow | 83.52M | 78.80M | 63.38M | 24.76M | -35.10M |
| Investing Cash Flow | -16.72M | -6.74M | -5.42M | -4.83M | -2.87M |
| Financing Cash Flow | -107.92M | -42.21M | -62.66M | -18.72M | 27.47M |
OneSpaWorld Holdings Technical Analysis
Positive
22.27
Price Trends
21.15
Positive
20.99
Positive
20.94
Positive
Market Momentum
0.41
Positive
53.28
Neutral
33.46
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OSW, the sentiment is Positive. The current price of 22.27 is above the 20-day moving average (MA) of 21.44, above the 50-day MA of 21.15, and above the 200-day MA of 20.94, indicating a bullish trend. The MACD of 0.41 indicates Positive momentum. The RSI at 53.28 is Neutral, neither overbought nor oversold. The STOCH value of 33.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $2.22B | 31.66 | 13.53% | 0.79% | 7.27% | 45.12% | |
65 Neutral | $6.14B | 15.98 | 13.03% | ― | 15.77% | 86.16% | |
64 Neutral | $6.88B | 30.58 | ― | ― | 14.39% | 31.64% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
55 Neutral | $1.89B | 10.34 | ― | ― | -3.27% | -17.93% | |
52 Neutral | $1.72B | -32.26 | ― | ― | -8.74% | 74.66% | |
49 Neutral | $401.27M | -5.00 | ― | ― | -3.55% | -111.90% |
* Consumer Cyclical Sector Average
OSW
OneSpaWorld Holdings
22.27
3.85
20.91%
PRKS
United Parks & Resorts
36.00
-13.57
-27.38%
PLNT
Planet Fitness
83.77
-7.61
-8.33%
PTON
Peloton Interactive
4.08
-3.35
-45.09%
XPOF
Xponential Fitness
8.05
-4.90
-37.84%
LTH
Life Time Group Holdings
27.67
-3.63
-11.60%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.