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Soho House & Co Inc. (SHCO)
:SHCO
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Soho House & Co
(NYSE:SHCO)
Rating:56Neutral
Price Target:
$6.50
▼(-2.69%Downside)
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. SPDR S&P 500 ETF (SPY)
Market Cap
$1.38B
Dividend YieldN/A
Average Volume (3M)165.23K
Price to Earnings (P/E)―
Beta (1Y)1.22
Revenue Growth7.27%
EPS Growth20.45%
CountryUS
Employees8,038
SectorConsumer Cyclical
Sector Strength58
IndustryTravel Lodging
Share Statistics
EPS (TTM)0.04
Shares Outstanding53,020,687
10 Day Avg. Volume146,549
30 Day Avg. Volume165,232
Financial Highlights & Ratios
PEG Ratio0.08
Price to Book (P/B)-33.34
Price to Sales (P/S)0.00
P/FCF Ratio-9.27
Enterprise Value/Market Cap1.95
Enterprise Value/Revenue0.56
Enterprise Value/Gross Profit4.66
Enterprise Value/Ebitda10.53
Forecast
1Y Price Target
$9.00Price Target Upside34.73% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Soho House & Co Business Overview & Revenue Model
Company DescriptionSoho House & Co Inc. operates a global membership platform of physical and digital spaces that connects a group of members. These members use the platform to work, socialize, connect, create, and flourish all over the world. The company was formerly known as Membership Collective Group Inc. and changed its name to Soho House & Co Inc. in March 2023. Soho House & Co Inc. was founded in 1995 and is headquartered in New York, New York.
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 Earnings Call Summary
Earnings Call Date:May 09, 2025
(Q3-2024)
| % Change Since: 8.44%|
Next Earnings Date:Aug 08, 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.Q3-2024 Updates
Positive Updates
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.
Negative Updates
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.Soho House & Co Financial Statement Overview
Summary
Soho House & Co shows strong revenue growth and improvements in cash flow management. However, significant profitability challenges and financial instability due to negative equity and high leverage affect its financial performance score.Income Statement
Soho House & Co has demonstrated a consistent increase in revenue over recent periods, showcasing a strong growth trajectory with a notable revenue growth rate. However, the company faces profitability challenges as indicated by negative net profit margins and EBIT margins, suggesting operating inefficiencies. The positive trend in EBITDA margin is a positive sign, yet the overall profitability needs improvement.58
Neutral
Balance Sheet
The balance sheet of Soho House & Co reveals a concerning financial structure with negative stockholders' equity and a high debt-to-equity ratio, indicating heavy reliance on debt financing. The return on equity is not applicable due to negative equity, and the equity ratio highlights the financial risk associated with the company's current capital structure. These factors suggest potential financial instability.42
Neutral
Cash Flow
The company's cash flow statement shows improvement in operating cash flow, and a positive free cash flow in the latest period suggests effective cash management. The free cash flow growth rate is strong, indicating enhanced liquidity. However, the operating cash flow to net income ratio suggests that cash generation is still strained due to persistent net losses.65
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Mar 2023 | Mar 2022 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.23B | 1.20B | 1.14B | 972.21M | 560.55M | 384.38M | Gross Profit |
| 576.71M | 565.47M | 546.52M | 447.29M | 251.71M | 164.34M | EBIT |
| -9.25M | -70.04M | -23.00M | -147.48M | -188.03M | -154.73M | EBITDA |
| 94.66M | 34.80M | 85.98M | -43.22M | -98.87M | -88.46M | Net Income Common Stockholders |
| -117.21M | -162.97M | -117.95M | -220.58M | -326.40M | -232.71M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 152.53M | 155.09M | 162.98M | 183.61M | 213.71M | 55.24M | Total Assets |
| 2.48B | 2.44B | 2.54B | 2.47B | 2.38B | 2.10B | Total Debt |
| 2.37B | 2.34B | 2.31B | 2.12B | 1.90B | 2.03B | Net Debt |
| 2.22B | 2.19B | 2.15B | 1.94B | 1.69B | 1.98B | Total Liabilities |
| 2.82B | 2.77B | 2.70B | 2.48B | 2.20B | 2.48B | Stockholders Equity |
| -340.06M | -335.06M | -174.89M | -22.44M | 176.13M | -432.42M |
| Cash Flow | Free Cash Flow | ||||
| 28.71M | 7.75M | -36.89M | -80.72M | -230.50M | -177.67M | Operating Cash Flow |
| 106.31M | 89.68M | 46.99M | 14.68M | -127.42M | -38.23M | Investing Cash Flow |
| -63.95M | -71.24M | -84.21M | -94.14M | -119.14M | -139.87M | Financing Cash Flow |
| -27.98M | -19.91M | 4.91M | 52.84M | 408.16M | 179.70M |
Soho House & Co Technical Analysis
Positive
6.68
Price Trends
6.04
Positive
6.55
Positive
6.14
Positive
Market Momentum
0.16
Negative
67.40
Neutral
90.28
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SHCO, the sentiment is Positive. The current price of 6.68 is above the 20-day moving average (MA) of 6.47, above the 50-day MA of 6.04, and above the 200-day MA of 6.14, indicating a bullish trend. The MACD of 0.16 indicates Negative momentum. The RSI at 67.40 is Neutral, neither overbought nor oversold. The STOCH value of 90.28 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $4.46B | 25.73 | 44.99% | 3.99% | 42.60% | 27.14% | |
75 Outperform | $12.46B | 16.92 | 22.31% | 0.46% | -7.38% | 19.62% | |
70 Outperform | $10.16B | 23.90 | 28.90% | 4.59% | 5.20% | -11.08% | |
70 Outperform | $5.77B | 18.92 | -661.94% | 0.92% | 2.75% | 40.83% | |
67 Neutral | $6.09B | 18.81 | 53.31% | 2.07% | 4.79% | 48.48% | |
62 Neutral | $6.88B | 11.07 | 2.77% | 4.28% | 2.67% | -24.94% | |
56 Neutral | $1.38B | ― | 49.70% | ― | 7.27% | 20.45% |
* Consumer Cyclical Sector Average
Performance Comparison
SHCO
Soho House & Co
7.08
1.69
31.35%
HTHT
H World Group
34.00
1.15
3.50%
CHH
Choice Hotels
123.56
7.23
6.22%
H
Hyatt Hotels
134.67
-15.32
-10.21%
WH
Wyndham Hotels & Resorts
79.87
8.75
12.30%
ATAT
Atour Lifestyle Holdings
31.64
14.23
81.73%
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.