OneSpaWorld Holdings Limited’s (NASDAQ:OSW) price-to-earnings (or “P/E”) ratio of 30.9x might make it look like a strong sell right now compared to the market in the United States, where around half of the companies have P/E ratios below 19x and even P/E’s below 11x are quite common. Nonetheless, we’d need to dig a little deeper to determine if there is a rational basis for the highly elevated P/E.
OneSpaWorld Holdings certainly has been doing a good job lately as it’s been growing earnings more than most other companies. The P/E is probably high because investors think this strong earnings performance will continue. You’d really hope so, otherwise you’re paying a pretty hefty price for no particular reason.
View our latest analysis for OneSpaWorld Holdings
NasdaqCM:OSW Price to Earnings Ratio vs Industry September 25th 2025 Want the full picture on analyst estimates for the company? Then our free report on OneSpaWorld Holdings will help you uncover what’s on the horizon. Does Growth Match The High P/E?
There’s an inherent assumption that a company should far outperform the market for P/E ratios like OneSpaWorld Holdings’ to be considered reasonable.
If we review the last year of earnings growth, the company posted a terrific increase of 31%. The latest three year period has also seen an excellent 142% overall rise in EPS, aided by its short-term performance. So we can start by confirming that the company has done a great job of growing earnings over that time.
Shifting to the future, estimates from the four analysts covering the company suggest earnings should grow by 14% per annum over the next three years. That’s shaping up to be materially higher than the 11% each year growth forecast for the broader market.
With this information, we can see why OneSpaWorld Holdings is trading at such a high P/E compared to the market. It seems most investors are expecting this strong future growth and are willing to pay more for the stock.
The Key Takeaway
We’d say the price-to-earnings ratio’s power isn’t primarily as a valuation instrument but rather to gauge current investor sentiment and future expectations.
As we suspected, our examination of OneSpaWorld Holdings’ analyst forecasts revealed that its superior earnings outlook is contributing to its high P/E. Right now shareholders are comfortable with the P/E as they are quite confident future earnings aren’t under threat. Unless these conditions change, they will continue to provide strong support to the share price.
We don’t want to rain on the parade too much, but we did also find 1 warning sign for OneSpaWorld Holdings that you need to be mindful of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.