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EDreams ODIGEO S.A. (ES:EDR)
BME:EDR
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EDreams ODIGEO
(BME:EDR)
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Rating:74Outperform
Price Target:
€3.00
▼(-7.69% Downside)
Action:ReiteratedDate:02/28/26
The score is driven by strong financial fundamentals (rapid revenue growth, solid profitability, and healthy cash conversion) and attractive valuation (very low P/E). These positives are tempered by weak technicals (price below major moving averages and negative MACD) and earnings-call risks tied to leverage and near-term margin and cash-flow pressure during the planned investment and subscription-transition period.
Positive Factors
Revenue & Margin Profile
Sustained high TTM revenue growth with robust gross and operating margins indicates durable unit economics and pricing power in the OTA model. Strong margins give room to invest in product, marketing and Prime while preserving profitability through travel cycles and supporting long-term reinvestment.
Cash Generation & Free Cash Flow
High operating cash conversion and strong FCF growth provide structural funding for buybacks, product investment and subscription rollout. Reliable cash flow reduces refinancing risk and supports multi‑year targets even if revenue mix shifts temporarily.
Prime Subscription Model & Mix Shift
Rapid Prime member growth and outsized margin contribution point to a recurring‑revenue flywheel: lower acquisition costs, higher retention and stickier margins. Structural shift toward subscriptions increases predictability and long‑term customer lifetime value.
Negative Factors
High Leverage
Meaningful leverage limits financial flexibility and raises sensitivity to interest or demand shocks. High debt relative to equity increases refinancing and covenant risk during periods of working‑capital strain or if revenue momentum softens over the next several quarters.
Ryanair Content Dependency
Material volatility in access to a major supplier's inventory is a structural commercial risk: sustained restrictions or worse economics would depress booking volumes, weaken gross margins and constrain Prime conversion, limiting predictable revenue growth.
Subscription Timing & Near‑term Margin Trough
Switching payment timing produces a durable working‑capital drag and lower near‑term ARPU, while management plans an investment-led margin trough in FY'27. These structural timing effects compress cash flow and raise execution risk during the multi‑year scale-up.
EDreams ODIGEO (EDR) vs. iShares MSCI Spain ETF (EWP)
Market Cap
€343.32M
Dividend YieldN/A
Average Volume (3M)164.83K
Price to Earnings (P/E)12.8
Beta (1Y)1.49
Revenue Growth6.79%
EPS Growth130.31%
CountryES
Employees1,680
SectorConsumer Cyclical
Sector Strength84
IndustryTravel Services
Share Statistics
EPS (TTM)0.08
Shares Outstanding118,625,060
10 Day Avg. Volume171,924
30 Day Avg. Volume164,828
Financial Highlights & Ratios
PEG Ratio0.46
Price to Book (P/B)3.50
Price to Sales (P/S)1.30
P/FCF Ratio9.62
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
€4.00Price Target Upside23.08% Upside
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)0.57
Revenue Forecast (FY)€675.58M
EDreams ODIGEO Business Overview & Revenue Model
Company DescriptioneDreams ODIGEO S.A., together with its subsidiaries, operates as an online travel company in Europe. The company offers its online travel agency services under the eDreams, Go Voyages, Opodo, Travellink, and Liligo brands. It also provides marketing, admin and IT consulting, and metasearch services, as well as offers online advertising campaigns. Its customers access the deals in regular flights, low-cost airlines, hotels, car rental, dynamic packages, holiday packages, and travel insurance. eDreams ODIGEO S.A. was incorporated in 2011 and is based in Madrid, Spain.
How the Company Makes MoneyEDreams ODIGEO generates revenue primarily through its online travel agency model, which includes a commission-based structure from airlines, hotels, and other travel service providers. Key revenue streams include booking fees charged to customers, commissions on airline ticket sales, and revenue from ancillary services such as travel insurance and car rentals. The company also benefits from partnerships with various airlines and hotel chains, which provide access to exclusive deals and promotions, enhancing the attractiveness of its offerings. Additionally, EDR invests in digital marketing and technology to drive customer acquisition and retention, further contributing to its overall revenue growth.
EDreams ODIGEO Earnings Call Summary
Earnings Call Date:Feb 26, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:May 21, 2026
Earnings Call Sentiment Positive
The call presented strong operational progress driven by Prime growth and a large adjusted EBITDA uplift (+74%), improved cash profitability margins, and a clear multi-year growth and buyback plan. Key near-term headwinds are largely timing and strategic-transition related: subscription payment model changes (reducing short-term cash flow and ARPU), volatile Ryanair content access, and a planned investment-led margin trough in FY'27. Management positions these issues as expected, temporary, and part of a deliberate long-term acceleration strategy.Q3-2026 Updates
Positive Updates
Large Adjusted EBITDA Expansion
Adjusted EBITDA increased 74% year-on-year to EUR 138.4 million for the first 9 months of FY'26 (adjusted to remove cash timing effects from subscription payment changes).
Positive Cash EBITDA and Margin Improvement
Cash EBITDA rose 2% year-on-year to EUR 126.7 million for the 9 months; cash EBITDA margin expanded from 23% to 26% (a 3 percentage-point improvement).
Prime Membership Growth and Mix Shift
Prime members reached 7.7 million (up 13% year-on-year), 7.8 million as of January, with management reaffirming a FY'26 target of 7.9 million. Prime now accounts for ~75% of cash revenue margin and contributes ~89% of total cash marginal profit.
Revenue and Profitability Drivers
Revenue margin excluding adjusted items increased 3% to EUR 502.8 million. Management reported strong Prime-related profitability: Prime cash revenue margin grew ~7% year-on-year and Prime cash marginal profit was highlighted as a major profitability driver (management cited strong growth in Prime marginal profit across slides). Overall cash marginal profit reached EUR 207.8 million.
Cost Improvements and Adjusted Net Income
Variable costs decreased by 15% year-on-year (helped by reduced acquisition costs as Prime members mature). Adjusted net income for the 9 months was EUR 63.8 million.
Capital Allocation and Share Buyback Commitment
Repurchased USD 23 million in shares this quarter; EUR 100 million committed for buybacks through September 2027. Management has amortized 12 million shares (9.4% of share capital) and states ~24% of market cap remains eligible for repurchase at current prices (management estimates ~33% yield to shareholders from the program).
Clear Multi-Year Growth Targets
Management set FY'30 targets of 13 million Prime members and EUR 270 million cash EBITDA, targeting 1.5–2.0 million net Prime adds per year between FY'28–FY'30 (15–20% Prime CAGR) and forecasting cash EBITDA to grow ~33% p.a. in that period; plans margin trough (~15%) in FY'27 then recovery to ~23% by FY'30.
Negative Updates
Ryanair Content Instability and Access Volatility
Access to Ryanair content remains volatile and materially lower than historical levels, creating recurring headwinds to revenue though management states the FY'26 guidance is derisked to lower Ryanair assumptions.
Cash Timing Impact from Subscription Payment Change
Transition from upfront annual payments to an annual subscription with monthly installments caused a timing-driven working capital hit: working capital outflow increased to EUR 42.9 million (vs EUR 27.3 million prior year) driven by a EUR 55 million decrease in prime deferred revenue; this reduced near-term cash generation despite strong underlying operational results.
ARPU Softness and Short-Term Revenue Mix Effects
Management expects ARPU softness driven by phased monthly payments (guidance set ARPU to EUR 60–65 range in the near term). Prime cash revenue margin showed a 1% decrease on a comparable basis (attributed to tests and subscription model change) while non-Prime revenue margin fell ~24% year-on-year as customers migrate to Prime.
Average Basket and Booking Mix Pressure
Average order/basket size declined in the quarter due to a shift to more continental routes versus intercontinental and greater use of broken-up one-way bookings, weighing on per-booking revenue.
Higher Fixed Costs and Nonrecurring Items
Fixed costs increased by EUR 3.3 million (driven by higher provisions and external fees). There were EUR 4 million of nonrecurring items tied to legal proceedings in Germany disclosed as nonrecurring.
Near-Term Margin Compression from Investment Phase
Management expects cash EBITDA margins to dip to ~15% in FY'27 during a planned peak investment phase (new markets and products), meaning near-term margin compression before the planned recovery to ~23% by FY'30.
Company Guidance
The company reiterated guidance to hit 7.9m Prime members and EUR 155m cash EBITDA in FY‑26, and set FY‑30 targets of 13m Prime members and EUR 270m cash EBITDA (implying 15–20% Prime CAGR FY‑27–FY‑30, record net adds of 1.5–2.0m p.a. FY‑28–FY‑30 and ~33% p.a. cash EBITDA growth FY‑28–FY‑30); near‑term pain is expected as margins dip to ~15% in FY‑27 during the investment phase and recover to ~23% by FY‑30. For the first 9 months of FY‑26 management reported adjusted EBITDA EUR 138.4m (+74% y/y), cash EBITDA EUR 126.7m (+2% y/y), adjusted net income EUR 63.8m, cash marginal profit EUR 207.8m (+3% y/y) with Prime now 75% of cash revenue margin and contributing 89% of cash marginal profit, revenue margin (ex adjustments) EUR 502.8m (+3% y/y; Prime +16%, non‑Prime −24%), variable costs −15%, fixed costs +EUR 3.3m, cash from operations EUR 79.1m (working capital outflow EUR 42.9m), and ongoing buybacks (EUR 23m repurchased this quarter, EUR 100m committed through Sep‑2027, 12m shares amortized = 9.4% of capital, ~24% of market cap still available to buy, ~33% shareholder yield); valuation noted at ~4.4x EV/cash‑EBITDA (FY‑26) versus peer averages ~8.3x/11x.EDreams ODIGEO Financial Statement Overview
Summary
Strong operating performance supported by very high TTM revenue growth (48.2%) and healthy margins (gross 68.2%, EBITDA 20.6%, net 8.7%). Cash generation is solid with operating cash flow well above net income (OCF/NI 2.26) and strong FCF growth (30.8%), but leverage is a meaningful risk (debt-to-equity 1.47, equity ratio 22.6%) despite strong ROE (23.9%).Income Statement
EDreams ODIGEO has demonstrated strong revenue growth, with a TTM revenue growth rate of 48.2%. The company maintains healthy profitability margins, with a gross profit margin of 68.2% and a net profit margin of 8.7% in the TTM. EBIT and EBITDA margins are also robust at 13.9% and 20.6%, respectively. These figures indicate a solid financial performance and effective cost management.85
Very Positive
Balance Sheet
The balance sheet shows a relatively high debt-to-equity ratio of 1.47, indicating significant leverage. However, the return on equity is strong at 23.9%, suggesting efficient use of equity capital. The equity ratio stands at 22.6%, reflecting a moderate level of equity financing relative to total assets.70
Positive
Cash Flow
Cash flow analysis reveals a positive trajectory, with a free cash flow growth rate of 30.8% in the TTM. The operating cash flow to net income ratio is 2.26, indicating strong cash generation relative to net income. The free cash flow to net income ratio of 0.60 suggests a healthy conversion of earnings into cash.78
Positive
| Breakdown | TTM | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 687.11M | 671.18M | 650.51M | 587.76M | 398.28M | 107.17M |
| Gross Profit | 496.26M | 671.18M | 558.29M | 569.59M | 382.58M | 63.31M |
| EBITDA | 162.77M | 116.24M | 77.58M | 23.61M | -6.26M | -73.81M |
| Net Income | 75.25M | 45.07M | 32.36M | -43.34M | -65.87M | -124.23M |
Balance Sheet | ||||||
| Total Assets | 1.12B | 1.16B | 1.15B | 1.07B | 1.08B | 986.24M |
| Cash, Cash Equivalents and Short-Term Investments | 45.16M | 78.64M | 93.90M | 35.93M | 45.93M | 12.14M |
| Total Debt | 384.96M | 379.33M | 380.64M | 385.70M | 424.26M | 513.23M |
| Total Liabilities | 869.01M | 911.83M | 880.44M | 837.63M | 802.61M | 727.77M |
| Stockholders Equity | 253.35M | 250.25M | 274.53M | 236.30M | 272.52M | 258.47M |
Cash Flow | ||||||
| Free Cash Flow | 111.53M | 91.03M | 89.73M | 64.37M | 92.22M | -21.28M |
| Operating Cash Flow | 170.57M | 146.41M | 138.88M | 102.53M | 119.15M | 428.00K |
| Investing Cash Flow | -59.13M | -55.55M | -48.80M | -38.15M | -26.92M | -21.66M |
| Financing Cash Flow | -116.03M | -105.61M | -31.05M | -67.74M | -50.93M | -69.45M |
EDreams ODIGEO Technical Analysis
Negative
3.25
Price Trends
3.45
Negative
4.56
Negative
6.39
Negative
Market Momentum
-0.17
Positive
39.62
Neutral
14.57
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ES:EDR, the sentiment is Negative. The current price of 3.25 is above the 20-day moving average (MA) of 3.12, below the 50-day MA of 3.45, and below the 200-day MA of 6.39, indicating a bearish trend. The MACD of -0.17 indicates Positive momentum. The RSI at 39.62 is Neutral, neither overbought nor oversold. The STOCH value of 14.57 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ES:EDR.
EDreams ODIGEO Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | €343.32M | 12.83 | 29.98% | ― | 6.79% | 130.31% | |
69 Neutral | €23.41B | 20.67 | 27.50% | 2.24% | 8.08% | 11.80% | |
68 Neutral | €10.90B | 19.56 | 28.47% | 0.52% | 6.92% | 57.04% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% |
* Consumer Cyclical Sector Average
ES:EDR
EDreams ODIGEO
2.97
-5.42
-64.60%
ES:AMS
Amadeus IT Group S.A
53.74
-19.21
-26.34%
ES:IDR
Indra Sistemas
61.85
36.03
139.56%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.