OneSpaWorld Holdings Limited Common Shares (OSW)

FairStock Score: 41/100 — MIXED

Key Financials

Strengths

• Generates $54 million in annual free cash flow (2.3% yield on market cap)
• Solid return on equity of 13.1% above cost of capital
• Conservative balance sheet with debt-to-equity of just 0.17, providing financial flexibility
• Altman Z-Score of 8.7 confirms minimal bankruptcy risk and strong solvency

Concerns

• Trades significantly above Graham Number ($9) with negative 156% margin of safety—limited downside protection

AI Analysis

OneSpaWorld Holdings Limited Common Shares is a small-cap consumer cyclical company valued at $2.4 billion. The business generates $961 million in annual revenue with a 1.3% net margin and $54 million in free cash flow. From a quality standpoint, OneSpaWorld shows Altman Z-Score of 8.7 confirms fortress-level solvency and adequate 13% ROE. On valuation, the stock is trading at a premium 34.0x earnings, with trades far above its Graham Number ($9) with no margin of safety. Growth dynamics show revenue growing at 11.5% and profit growth of -16.2%. Our composite FairStock Score of 41/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $54 million in annual free cash flow (2.3% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 34x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer