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Hostelworld Group PLC (GB:HSW)
LSE:HSW

Hostelworld (HSW) AI Stock Analysis

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Hostelworld

(LSE:HSW)

Rating:69Neutral
Price Target:
125.00p
▲(7.76%Upside)
Hostelworld's overall stock score reflects strong financial performance, especially in profitability and cash management, despite challenges in revenue growth. The technical analysis suggests some caution with potential bearish trends, though valuation metrics and recent corporate events are positive, indicating confidence in strategic growth and shareholder value.

Hostelworld (HSW) vs. iShares MSCI United Kingdom ETF (EWC)

Hostelworld Business Overview & Revenue Model

Company DescriptionHostelworld Group plc operates an online booking platform worldwide. The company offers software and data processing services that facilitate hostel, B&B, hotel, and other accommodation bookings. The company also provides business information consulting and marketing planning services; and marketing, and research and development services. In addition, it is engaged in technology trading business. It operates approximately 1,100 hostels. Hostelworld Group plc was founded in 1999 and is based in Dublin, Ireland.
How the Company Makes MoneyHostelworld makes money primarily through commission-based revenue, which is generated from bookings made via its platform. When a traveler books a hostel stay through Hostelworld, the hostel pays a commission fee to the company, typically representing a percentage of the booking price. Additionally, Hostelworld charges service fees to users for processing bookings. The company leverages partnerships with hostels and travel-related service providers to enhance its offerings and maintain a comprehensive inventory of accommodations. Its earnings are influenced by factors such as the volume of travel bookings, the average booking value, and the overall trends in the travel and tourism industry.

Hostelworld Financial Statement Overview

Summary
Hostelworld has shown significant operational improvements and financial resilience post-pandemic. The income statement reflects a strong return to profitability with improved margins, although revenue growth remains a challenge. The balance sheet is solid with low leverage and a strong equity base, while cash flow metrics highlight effective cash management and growth. Overall, the company is on a positive trajectory, with some areas for further growth and optimization.
Income Statement
75
Positive
Hostelworld demonstrated strong performance in the latest annual period with a gross profit margin of 79.35% and an impressive turnaround in net profit margin to 9.89% from previous losses. Revenue growth over the last year was slightly negative at -1.36%, indicating a slight decline but a strong recovery from pandemic lows. Both EBIT and EBITDA margins improved significantly, reflecting operational efficiency gains.
Balance Sheet
70
Positive
The company maintains a robust equity position with an equity ratio of 77.46%, indicating financial stability. The debt-to-equity ratio is very low at 0.004, suggesting minimal leverage and reduced financial risk. However, return on equity stands at 12.98%, which is respectable but leaves room for improvement.
Cash Flow
80
Positive
Free cash flow has shown strong growth, reflecting a positive trend in cash generation capabilities. The operating cash flow to net income ratio is robust at 2.23, indicating efficient cash flow management. The free cash flow to net income ratio of 1.62 further underscores solid cash flow performance.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
92.00M93.26M69.69M16.90M15.36M
Gross Profit
73.00M52.64M57.11M5.79M2.15M
EBIT
11.30M4.98M-11.87M-31.78M-32.10M
EBITDA
18.00M5.21M-2.01M-20.67M-36.12M
Net Income Common Stockholders
9.10M5.14M-17.26M-36.02M-48.86M
Balance SheetCash, Cash Equivalents and Short-Term Investments
8.20M6.71M18.21M24.52M16.69M
Total Assets
90.50M94.83M106.48M116.51M120.60M
Total Debt
300.00K10.73M31.66M28.30M5.46M
Net Debt
-7.90M4.01M13.45M3.78M-11.23M
Total Liabilities
20.40M35.65M54.23M49.40M22.74M
Stockholders Equity
70.10M59.18M52.24M67.11M97.86M
Cash FlowFree Cash Flow
14.70M17.32M-5.54M-18.22M-14.90M
Operating Cash Flow
20.30M17.43M-749.00K-13.75M-11.04M
Investing Cash Flow
-5.60M-4.09M-4.79M-4.47M-3.87M
Financing Cash Flow
-14.00M-24.81M-752.00K25.27M13.73M

Hostelworld Technical Analysis

Technical Analysis Sentiment
Negative
Last Price116.00
Price Trends
50DMA
116.29
Negative
100DMA
122.58
Negative
200DMA
129.50
Negative
Market Momentum
MACD
0.18
Positive
RSI
48.08
Neutral
STOCH
31.11
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:HSW, the sentiment is Negative. The current price of 116 is below the 20-day moving average (MA) of 118.08, below the 50-day MA of 116.29, and below the 200-day MA of 129.50, indicating a bearish trend. The MACD of 0.18 indicates Positive momentum. The RSI at 48.08 is Neutral, neither overbought nor oversold. The STOCH value of 31.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:HSW.

Hostelworld Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
£1.35B6.792.95%-10.46%396.13%
GBJDW
73
Outperform
£794.52M14.0116.38%2.19%3.70%57.10%
GBWTB
70
Outperform
£4.97B20.077.40%3.42%3.75%-22.77%
GBHSW
69
Neutral
£145.73M18.8614.05%-3.96%83.04%
GBPPH
65
Neutral
£632.72M22.548.99%2.44%6.80%27.42%
GBAO
63
Neutral
£575.75M22.0020.28%-0.39%2.68%
62
Neutral
$6.88B11.322.95%3.87%2.70%-24.57%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GB:HSW
Hostelworld
116.00
-40.00
-25.64%
GB:JDW
J D Wetherspoon
731.50
-8.56
-1.16%
GB:WTB
Whitbread
2,842.00
-58.06
-2.00%
GB:PPH
PPHE Hotel
1,558.00
261.62
20.18%
GB:AO
AO World
101.20
-7.80
-7.16%
GB:CURY
Currys plc
122.00
43.00
54.43%

Hostelworld Corporate Events

Business Operations and Strategy
Aberforth Partners LLP Increases Stake in Hostelworld Group PLC
Neutral
May 12, 2025

Hostelworld Group PLC has announced a change in its major holdings, with Aberforth Partners LLP increasing its voting rights from 9.24% to 10.37%. This acquisition of voting rights signifies a strengthened position for Aberforth Partners LLP within the company, potentially impacting future decision-making processes and strategic directions. The notification was completed in Edinburgh, UK, and reflects a notable shift in stakeholder influence within Hostelworld.

The most recent analyst rating on (GB:HSW) stock is a Buy with a £2.15 price target. To see the full list of analyst forecasts on Hostelworld stock, see the GB:HSW Stock Forecast page.

Regulatory Filings and Compliance
Hostelworld Executives Sell Shares to Settle Tax Liabilities
Neutral
May 9, 2025

Hostelworld Group PLC announced the sale of shares by CEO Gary Morrison and CFO Caroline Sherry to settle tax liabilities related to their acquisition of shares under the company’s Long-Term Incentive Plan. This transaction, conducted on the London Stock Exchange, aligns with regulatory requirements and reflects the company’s ongoing commitment to transparent financial practices.

Executive/Board ChangesBusiness Operations and Strategy
Hostelworld Issues Shares to Key Executives Under Incentive Plan
Positive
May 8, 2025

Hostelworld Group PLC announced the issuance of shares to its CEO, Gary Morrison, and CFO, Caroline Sherry, as part of the vesting of awards under the Company’s Long-Term Incentive Plan. This transaction, conducted outside a trading venue, reflects the company’s commitment to rewarding its key executives, potentially impacting its operational dynamics and signaling confidence in its leadership to stakeholders.

Other
Hostelworld Announces Change in Voting Rights Structure
Neutral
May 8, 2025

Hostelworld Group PLC announced a change in the breakdown of voting rights, with BGF Investment Management Limited reducing its voting rights from 5.117% to 4.965%. This adjustment follows a subscription of shares, impacting the company’s shareholder structure and potentially influencing its governance dynamics.

Executive/Board ChangesShareholder MeetingsStock BuybackBusiness Operations and Strategy
Hostelworld Group PLC Passes All Resolutions at Annual General Meeting
Positive
May 7, 2025

Hostelworld Group PLC successfully held its Annual General Meeting on May 7, 2025, where all proposed resolutions were passed. These resolutions included the adoption of the company’s accounts, approval of the directors’ remuneration report, and the election and re-election of several directors. The meeting also authorized the company to make market purchases of its own shares and approved the Long Term Incentive Plan 2025. The resolutions passed are expected to support the company’s strategic objectives and enhance shareholder value.

Stock BuybackDividendsBusiness Operations and Strategy
Hostelworld Unveils Strategic Growth Plan and Reinstates Dividend
Positive
Apr 29, 2025

Hostelworld has announced a strategic growth plan at its Capital Markets Day, focusing on scaling its social travel network for long-term value creation. The plan includes strengthening its core business, expanding the addressable market, and exploring selective mergers and acquisitions. The company aims for low double-digit revenue growth in 2026 and 2027, with a marketing spend of 45-50% of revenue and an adjusted EBITDA margin greater than 20%. Additionally, Hostelworld is reinstating a progressive dividend policy and introducing a share buy-back program, reflecting confidence in its growth strategy and commitment to shareholder returns.

Stock BuybackDividendsBusiness Operations and Strategy
Hostelworld Unveils Strategic Growth Plan and Reinstates Dividend
Positive
Apr 29, 2025

Hostelworld announced a strategic growth plan at its Capital Markets Day, focusing on scaling its social travel network to create long-term value and reinstating a dividend policy. The strategy includes strengthening its core business, expanding its market with additional budget accommodations, and exploring selective acquisitions. This plan aims for low double-digit revenue growth by 2026-2027, with a focus on increasing shareholder returns through dividends and a potential share buy-back program. Despite challenges like a weaker US dollar and shifting traveler preferences, Hostelworld anticipates mid-single-digit revenue growth for 2025.

Shareholder MeetingsBusiness Operations and StrategyFinancial Disclosures
Hostelworld Releases 2024 Annual Report and Announces 2025 AGM
Neutral
Apr 2, 2025

Hostelworld Group PLC has released its Annual Report for 2024 and announced its 2025 Annual General Meeting, scheduled for May 7, 2025, in Dublin, Ireland. The company has made available various documents, including the Annual Report and a Circular with the Chairman’s Letter, to shareholders and regulatory bodies. The report outlines the company’s financial performance and strategic direction, while also addressing risks such as changing travel patterns, inflationary pressures, and geopolitical tensions. The Board of Directors emphasizes effective risk management and internal controls, ensuring the company’s resilience and strategic objectives are met.

Executive/Board ChangesBusiness Operations and Strategy
Hostelworld Grants Long-Term Incentive Awards to Key Executives
Neutral
Mar 25, 2025

Hostelworld Group PLC has announced the grant of nil-cost options over ordinary shares to its CEO, Gary Morrison, and CFO, Caroline Sherry, as part of its Long-Term Incentive Plan. These awards, which are contingent on continued employment and performance conditions, aim to align the interests of the company’s leadership with its long-term strategic goals, potentially impacting stakeholder confidence and market positioning.

Executive/Board ChangesBusiness Operations and Strategy
Hostelworld Announces Leadership Change as Chairman Steps Down
Neutral
Mar 20, 2025

Hostelworld Group announced that Ulrik Bengtsson will step down as Chairman and Non-Executive Director by the end of October 2025, as he has accepted a CEO position at another company. The board will begin searching for a new Independent Non-Executive Chair to support the company’s growth strategy, which will be detailed in an upcoming capital markets day. This leadership change comes as Hostelworld continues to focus on its growth potential and distinctive social strategy.

Business Operations and StrategyFinancial Disclosures
Hostelworld Reports Strong 2024 Results with Focus on Social Strategy and Sustainability
Positive
Mar 20, 2025

Hostelworld Group PLC reported its preliminary results for 2024, highlighting a return to a net cash position and a 19% increase in adjusted EBITDA to €21.8 million. Despite a slight decline in net revenue, the company saw a 6% rise in net bookings, driven by demand for lower-cost destinations in Asia. The company’s social strategy has been instrumental in reducing marketing expenses and boosting net margin growth. Hostelworld’s focus on sustainability has also been reinforced, with over 2,100 hostels obtaining sustainability certification. Looking ahead, the company plans to continue investing in technology and social features to drive growth.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.