Atour 1Q26 results beat expectations; Goldman Sachs keeps Buy and US$52 target price

Overview

This report is Goldman Sachs' commentary on Atour Lifestyle Holdings' 1Q26 earnings. Atour's first-quarter results were better than previously expected, driven primarily by strong retail sales, rising supply chain contributions, and improved hotel RevPAR. Although the revenue mix shifted toward the lower-margin retail and supply chain businesses, which weighed on gross margin year over year, the EBITDA margin still expanded slightly thanks to government subsidies and improved sales and marketing efficiency.

Core views

Goldman Sachs maintained its Buy rating on Atour, with key reasons including: the company's hotel network expansion is still progressing; contributions from its membership ecosystem and CRS bookings continue to rise; new retail categories remain strong; and the company has ample cash and a high level of shareholder returns. The report also points out short-term negatives, including a slower pace of hotel openings, a quarter-over-quarter decline in the pipeline of managed hotels, and still-soft business travel demand.

Analysis framework

The report assesses Atour's fundamentals from multiple angles, including earnings beat, full-year guidance raise, hotel network expansion, RevPAR trends, membership system, retail business growth, margin changes, valuation, and peer comparison, and sets the target price using an SOTP valuation approach.

Methodology notes

• Valuation methodsSOTP valuation

  Sum-of-the-parts valuation

  Goldman Sachs' target price is based on an SOTP approach: the core business is valued at 14x FY26E EV/EBITDA, while other investments are included at book value.

• Factor analysisGS Factor Profile

  Growth, financial return, valuation multiple, and composite factor ranking

  Goldman Sachs compares the company's position versus the market and industry peers using growth, financial return, valuation multiples, and composite metrics; the chart shows Atour ranks relatively high on the financial return dimension.

• M&A probabilityM&A Rank

  Probability tier for takeover targets

  The report discloses Atour's M&A Rank as 3, indicating a low probability of becoming a takeover target and generally not an important component of the target price.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• ATAT.US

  Covered company; Goldman Sachs maintains a Buy rating and a US$52.00 target price.

  Strengths

  Strong retail and supply chain growth, improving hotel RevPAR, a larger membership base, ample cash, and an asset-light model that supports strong cash generation.

  Weaknesses

  Slower hotel opening pace, a quarter-over-quarter decline in pipeline hotels, a revenue mix shifting toward lower-margin businesses, and still-soft business travel demand.

  Comparison

  Goldman Sachs believes Atour still has better relative performance potential than H World, with valuation at about 10x EV/EBITDA, roughly a 20% discount to H World.

  Risks

  Hotel expansion slower than expected, RevPAR pressure from increased supply or weak business demand, and retail competition causing volatility in revenue and profitability.

Key data

• 12-month target priceUS$52.00Unchanged by Goldman Sachs.
• Current priceUS$37.06Price disclosed on the report cover.
• Implied upside40.3%Calculated based on the target price and current price.
• 1Q26 revenue growth+48% YoYAbove Visible Alpha consensus of about 35% YoY.
• Retail sales growth+54% YoYRetail revenue was about RMB 1.1 billion.
• Supply chain business growthabout +80% YoYThe report says supply chain contribution was strong.
• 1Q26 EBITDARMB 716 million, +51% YoYReached about 24% of the full-year market forecast.
• 1Q26 EBITDA margin25.5%Up 0.6 percentage points YoY.
• 1Q26 net profitRMB 490 million, +42% YoYGrowth was slower than EBITDA, mainly due to higher accrued tax.
• FY2026 revenue growth guidance24%-28% YoYRaised from the prior 20%-24%, implying revenue of approximately RMB 12.1 billion to RMB 12.5 billion.
• Number of hotels2,088As of the end of 1Q26, up 21% YoY and 4% QoQ.
• Pipeline hotels under management751Down 4% QoQ, but still supports about 1.5 years of the current opening pace.
• Registered personal members116 millionUp 20% YoY and 4% QoQ.
• Net cashRMB 3.4 billionAbove RMB 3.1 billion at the end of FY25.

Impact & implications

The report's implications for Atour's share price are positive: the earnings beat and guidance raise reinforce the company's execution in hotel expansion, brand upgrading, and retail business; at the same time, strong cash generation and a high willingness to return capital to shareholders increase the certainty of shareholder returns. However, valuation re-rating will still depend on whether hotel openings recover, RevPAR continues to improve steadily, retail growth quality holds up, and margins can remain resilient despite changes in revenue mix.

Risks

• Hotel store growth could fall short of expectations, possibly due to intensified competition as domestic and international brands compete for franchisees.
• Expansion into midscale hotels may dilute RevPAR; if industry supply continues to grow rapidly or business travel recovery remains weak, the pressure could intensify further.
• Intense competition in the retail business, especially from online players, may increase volatility in revenue and profitability.
• A revenue mix shift toward retail and supply chain businesses may continue to pressure gross margin.
• A reduction in government subsidies could weigh on the full-year EBITDA margin.

What to watch

• Whether FY2026 revenue growth lands within the 24%-28% guidance range.
• Whether retail sales growth can meet the new 30%-35% guidance.
• Whether net hotel openings can reach the full-year plan of 480-490.
• Whether RevPAR can continue the improvement trend from -0.4% in 4Q25 to +2.4% in 1Q26.
• Whether the quarter-over-quarter decline in pipeline hotels is just temporary or signals slower opening momentum ahead.
• Whether EBITDA margin can remain stable amid a higher share of lower-margin businesses and reduced subsidies.
• Whether the company continues to deliver on its intention to return nearly 100% of GAAP earnings to shareholders.