ONESPAWORLD HOLDINGS Ltd (NASDAQ: OSW)

Sector: Consumer Cyclical Industry: Leisure CIK: 0001758488
Market Cap 2.05 Bn
P/B 6.92
P/E -15.90
P/S 32.97
ROIC (Qtr) 12.32
Div Yield % 0.21
Rev 1y % (Qtr) 6.96
Total Debt (Qtr) 97.74 Mn
Debt/Equity (Qtr) 0.18
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About

ONESPAWORLD HOLDINGS Ltd (OSW) is a global services company that operates in the outsourced maritime health and wellness market. The company has built a leading market position, boasting a market share that exceeds 90%, by leveraging its depth of staff expertise, broad and innovative service and product offerings, expansive global recruitment, training, and logistics platform, and decades-long relationships with cruise line and destination resort partners. The company's main business activities revolve around the provision of health, fitness,...

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Investment thesis

Bull case

  • Strong operating cash flow of 80.11M provides robust 0.82x coverage of total debt 97.74M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 30.75M provide 12.66x coverage of short-term debt 2.43M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 80.11M provides exceptional 12.72x coverage of interest expenses 6.30M, showing strong debt service capability.
  • Robust free cash flow of 66.78M exceeds capital expenditure of 13.33M by 5.01x, indicating strong organic growth funding capability.
  • Operating cash flow of 80.11M fully covers other non-current liabilities 154000 by 520.23x, showing strong long-term stability.

Bear case

  • Operating cash flow of 80.11M barely covers its investment activities of (13.33M), with a coverage ratio of -6.01, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 80.11M provides thin coverage of dividend payments of (16.56M) with a -4.84 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Free cash flow of 66.78M represents just -4.79x of debt issuance (13.95M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Operating cash flow of 80.11M is outpaced by equity issuance of (55.53M) (-1.44 ratio), indicating concerning reliance on equity markets for funding operations.
  • R&D investment of 0 represents just 0x of SG&A expenses of 56.55M, indicating potential underinvestment in innovation relative to administrative overhead.

Peer comparison

Companies in the Leisure
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 AS Amer Sports, Inc. 22.38 Bn 71.89 3.67 1.87 Bn
2 HAS Hasbro, Inc. 13.30 Bn 46.47 3.26 3.32 Bn
3 PLNT Planet Fitness, Inc. 7.78 Bn 37.79 6.04 2.58 Bn
4 GOLF Acushnet Holdings Corp. 7.40 Bn 80.24 4.75 0.90 Bn
5 LTH Life Time Group Holdings, Inc. 6.29 Bn 21.85 2.16 4.13 Bn
6 MAT Mattel Inc /De/ 5.43 Bn 12.57 1.04 2.59 Bn
7 YETI YETI Holdings, Inc. 3.97 Bn 24.75 2.17 0.22 Bn
8 MSGE Madison Square Garden Entertainment Corp. 2.95 Bn 56.80 2.91 1.20 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 3.06 1.19
EV to Cash from Ops. EV/CFO -46.75 -6.09
EV to Debt EV to Debt 22.91 14.49
EV to EBIT EV/EBIT -19.31 -159.90
EV to EBITDA EV/EBITDA -44.75 -4.06
EV to Free Cash Flow [EV/FCF] EV/FCF -45.20 0.74
EV to Market Cap EV to Market Cap 1.09 -0.64
EV to Revenue EV/Rev 36.00 4.65
Price to Book Value [P/B] P/B 6.92 4.75
Price to Earnings [P/E] P/E -15.90 12.00
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 4.46 -0.51
Dividend Payout Ratio % Div Payout % (Qtr) 22.20 3.11
Dividend per Basic Share Div per Share (Qtr) 0.16 0.22
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 24.73 6.13
Interest Coverage Int. cover (Qtr) 13.29 -30.68
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -123.09 -13.50
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -38.48 1,190.33
Dividend Growth (1y) % Div 1y % (Qtr) 300.00 13.88
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 20.00 -111.75
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 10.75 -165.31
EBIT Growth (1y) % EBIT 1y % (Qtr) 18.53 -1,562.20
EBT Growth (1y) % EBT 1y % (Qtr) 42.73 -1,555.34
EPS Growth (1y) % EPS 1y % (Qtr) 44.00 -377.44
FCF Growth (1y) % FCF 1y % (Qtr) -8.90 10.93
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 7.71 17.65
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.28 0.73
Cash Payout Ratio Cash Payout (Qtr) 0.18 0.07
Cash Ratio Cash Ratio (Qtr) 0.36 3.31
Current Ratio Curr Ratio (Qtr) 1.84 4.80
Debt to Equity Ratio Debt/Equity (Qtr) 0.18 2.35
Interest Cover Ratio Int Coverage (Qtr) 13.29 -30.68
Times Interest Earned Times Interest Earned (Qtr) 13.29 -30.68
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 11.60 -57.55
EBIT Margin % EBIT Margin % (Qtr) 8.94 -65.38
EBT Margin % EBT Margin % (Qtr) 8.26 -69.55
Gross Margin % Gross Margin % (Qtr) 16.70 46.51
Net Profit Margin % Net Margin % (Qtr) 7.90 -74.45