Financial Comparison: Atour Lifestyle (NASDAQ:ATAT) vs. Target Hospitality (NASDAQ:TH)

Atour Lifestyle (NASDAQ:ATAT) and Target Hospitality (NASDAQ:TH) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, institutional ownership, profitability and dividends.

Profitability

This table compares Atour Lifestyle and Target Hospitality’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Atour Lifestyle	17.22%	51.75%	20.99%
Target Hospitality	-13.47%	-11.11%	-8.13%

Volatility & Risk

Atour Lifestyle has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500. Comparatively, Target Hospitality has a beta of 1.47, meaning that its share price is 47% more volatile than the S&P 500.

Institutional and Insider Ownership

17.8% of Atour Lifestyle shares are held by institutional investors. Comparatively, 32.4% of Target Hospitality shares are held by institutional investors. 3.8% of Target Hospitality shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for Atour Lifestyle and Target Hospitality, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Atour Lifestyle	0	0	8	1	3.11
Target Hospitality	1	1	2	1	2.60

Atour Lifestyle presently has a consensus target price of $48.00, suggesting a potential upside of 44.40%. Target Hospitality has a consensus target price of $19.33, suggesting a potential upside of 16.26%. Given Atour Lifestyle’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Atour Lifestyle is more favorable than Target Hospitality.

Valuation and Earnings

This table compares Atour Lifestyle and Target Hospitality”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Atour Lifestyle	$10.70 billion	0.43	$231.80 million	$1.86	17.87
Target Hospitality	$320.64 million	5.19	-$37.12 million	($0.44)	-37.80

Atour Lifestyle has higher revenue and earnings than Target Hospitality. Target Hospitality is trading at a lower price-to-earnings ratio than Atour Lifestyle, indicating that it is currently the more affordable of the two stocks.

Summary

Atour Lifestyle beats Target Hospitality on 10 of the 14 factors compared between the two stocks.

About Atour Lifestyle

Atour Lifestyle Holdings Limited, through its subsidiaries, develops lifestyle brands around hotel offerings in the People’s Republic of China. The company provides hotel management services, including day-to-day management services of the hotels for the franchisees; and sells hotel supplies and other products. It also offers retail management service; investment management service; financial information service management; property management services; and software and technology services, as well as operates travel agency. Atour Lifestyle Holdings Limited was incorporated in 2012 and is headquartered in Shanghai, China.

About Target Hospitality

Target Hospitality Corp. operates as a specialty rental and hospitality services company in North America. The company operates through two segments, Hospitality & Facilities Services – South and Government. It owns a network of specialty rental accommodation units. In addition, the company provides catering and food, maintenance, housekeeping, grounds-keeping, security, health and recreation facilities, workforce community management, concierge, and laundry services. It serves the U.S. government contractors and investment grade natural resource development companies. Target Hospitality Corp. was founded in 1978 and is headquartered in The Woodlands, Texas.