Atour Lifestyle Holdings (ATAT) broke out of a flat base at a buy point of 34.23 on July 7 and scored an all-time high of 37.46. Shares are in the 5% buy zone after finding support at the 50-day moving average. The China-based company's stock is Tuesday's selection for IBD 50 Stocks To Watch.
Atour Lifestyle will report its second-quarter results on Aug. 26 before the stock market opens. Analysts polled by FactSet have earnings estimates at 41 cents per share on sales of $328.3 million. Earnings are expected to grow 34% from the same quarter a year ago, with sales increasing 32%.
The company operates theme-based hotels in China. In Q1, Atour earned 34 cents per share, or 31% growth from the prior year, on sales of $262.6 million — a 29% increase. The company also paid its first quarterly dividend of 14 cents per share to shareholders on record as of June 2.
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During the first quarter, Atour added 121 hotels to its network and operated 1,727 hotels as of March 31. Revenue from hotels that the company manages increased while those that it leases decreased.
Atour Lifestyle Holdings also authorized a share repurchase program of up to $400 million over three years. Shares started trading on the Nasdaq on Nov. 11, 2022, at an initial offering price of $11 per share. As of Monday's closing price, the stock had tripled in price since its debut and had gained 30% year to date, according to IBD MarketSurge.
The stock holds high-level ratings. Its Composite Rating sits at 95 while the nearly-ideal EPS Rating of 98 shows a strong record of profitability in recent quarters. Compared with other stocks in the Investor's Business Daily database over the last 52 weeks, Atour Lifestyle Holdings ranks in the top 8%.
Fund managers have been loading up on the stock, giving it an Accumulation/Distribution Rating of B. Mutual funds own 50% of outstanding shares. Atour Lifestyle ranks first in the leisure and lodging group, according to IBD Stock Checkup. and leads the leisure sector, one of IBD's 33 sectors.
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