Safestay (SSTY) AI Stock Analysis

• Market Cap: £10.88M
• Dividend Yield: N/A
• Average Volume (3M): 9.10K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.26
• Revenue Growth: 0.82%
• EPS Growth: -27.59%
• Country: UK
• Employees: 283
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Travel Lodging
• EPS (TTM): <0.01
• Shares Outstanding: 64,935,420
• 10 Day Avg. Volume: 4,966
• 30 Day Avg. Volume: 9,097
• PEG Ratio: 0.55
• Price to Book (P/B): 0.53
• Price to Sales (P/S): 0.72
• P/FCF Ratio: 24.75
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 56 Neutral
• Price Target: 17.50p ▲(4.48% Upside)

Safestay's stock score is primarily influenced by its strong cash flow generation and strategic corporate event, which help mitigate the risks associated with high leverage and ongoing net losses. However, bearish technical indicators and a negative P/E ratio reflect market concerns about profitability and valuation.

Positive Factors

Operating cash flow strength

Consistently strong operating cash flow (OCF to net income 7.71) shows the core hostel operations generate cash despite accounting losses. Durable cash generation supports working capital, funds reinvestment and debt servicing, reducing reliance on external financing over the medium term.

Revenue recovery and margin improvement

Recovered revenues and rising gross margins indicate structural demand rebound in urban budget lodging and better cost management. Improved EBIT/EBITDA margins point to operational leverage that can sustain profitability gains as occupancy normalizes across the portfolio over the next several quarters.

Balance-sheet strengthening via asset deal

Executing a sale-and-leaseback converts fixed real estate into liquidity, reduces near-term leverage and supplies working capital. This structural financing action enhances financial flexibility and supports growth or deleveraging plans without altering the core hostel business model.

Negative Factors

High leverage

A D/E around 1.64 reflects material leverage that can constrain strategic options and raise interest and refinancing risk. In hospitality, cyclical revenue swings can make high leverage persistent stress on cash flow and limit capacity to invest in maintenance or expansion during downturns.

Ongoing net losses

Continued net losses signal that non-operating costs, financing or one-off items still erode bottom-line results. Persistent losses impair retained earnings and ROE, restricting the firm's ability to self-fund growth and prolonging dependence on external capital unless profitability conversion continues.

Inconsistent free cash flow growth

Variable FCF, influenced by capex timing, weakens predictability of funds available for debt reduction, refurbishments or expansion. For a hospitality operator where property upkeep drives competitiveness, uneven FCF complicates long-term planning and can necessitate intermittent external financing.

Safestay Business Overview & Revenue Model

Company Description

Safestay plc operates and develops traveller accommodation under the Safestay brand in the United Kingdom. It provides overnight hostel accommodation services and owns properties, as well as ancillary goods and services, such as food and beverage, and merchandise. Safestay plc was incorporated in 2014 and is based in London, the United Kingdom.

How the Company Makes Money

Safestay generates revenue primarily through its accommodation services, which include nightly rates for both dormitory beds and private rooms. The company benefits from a high occupancy rate due to its strategic locations and competitive pricing. Additional revenue streams include sales from food and beverage services in its hostels, as well as ancillary services like tours, activities, and merchandise. Safestay also engages in partnerships with travel agencies and online booking platforms to increase visibility and attract more customers, contributing to its overall earnings. Seasonal promotions and loyalty programs further enhance its revenue by encouraging repeat business and attracting new guests.

Safestay Financial Statement Overview

Summary

Safestay shows strong revenue recovery and operational improvements, with increasing EBIT and EBITDA margins. However, ongoing net losses and high leverage pose risks. Strong cash flow generation supports operations, but profitability and leverage need addressing for sustainable growth.

Income Statement

Safestay has shown a consistent recovery in revenue post-pandemic, with a revenue growth rate of 4.67% from 2023 to 2024. The gross profit margin improved to 82.49% in 2024 from 82.28% in 2023, indicating efficient cost management. However, the net profit margin remains negative due to consecutive net losses, despite an increase in EBIT and EBITDA margins, which suggests improving operational performance but lingering profitability challenges.

Balance Sheet

The company's debt-to-equity ratio is relatively high at approximately 1.64 in 2024, indicating significant leverage. The equity ratio is stable at 32.62%, which reflects a balanced asset financing structure. However, return on equity remains negative due to ongoing net losses, indicating pressure on shareholder returns despite improved equity levels.

Cash Flow

Safestay's operating cash flow is robust, covering net income losses, with an operating cash flow to net income ratio of 7.71 in 2024. Free cash flow to net income ratio is also positive at 0.74, suggesting strong cash generation. However, free cash flow growth is inconsistent, impacted by capital expenditures, which presents a challenge for future investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	21.88M	22.50M	21.49M	18.15M	5.81M	3.38M
Gross Profit	14.84M	18.56M	17.68M	12.35M	877.00K	-1.48M
EBITDA	6.68M	5.85M	5.82M	5.56M	293.00K	-2.59M
Net Income	-483.00K	-891.00K	-1.32M	-149.00K	-7.56M	-7.52M
Balance Sheet
Total Assets	93.44M	94.31M	93.97M	92.49M	93.48M	110.73M
Cash, Cash Equivalents and Short-Term Investments	1.69M	1.43M	2.00M	5.23M	4.48M	2.13M
Total Debt	49.67M	50.44M	49.33M	56.24M	57.96M	79.38M
Total Liabilities	62.36M	63.55M	61.21M	62.73M	63.34M	83.88M
Stockholders Equity	31.08M	30.76M	32.76M	29.76M	30.13M	26.85M
Cash Flow
Free Cash Flow	3.06M	656.00K	3.00M	5.24M	-2.12M	-5.99M
Operating Cash Flow	3.78M	6.87M	8.05M	5.61M	-1.81M	-4.97M
Investing Cash Flow	-801.00K	-6.20M	-5.02M	-370.00K	16.35M	-3.53M
Financing Cash Flow	-3.52M	-1.52M	-5.86M	-5.15M	-12.18M	7.05M

Safestay Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 16.75
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Positive
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:SSTY, the sentiment is Negative. The current price of 16.75 is below the 20-day moving average (MA) of 17.01, below the 50-day MA of 18.34, and below the 200-day MA of 21.27, indicating a bearish trend. The MACD of -0.49 indicates Negative momentum. The RSI at 6.63 is Positive, neither overbought nor oversold. The STOCH value of 57.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:SSTY.

Safestay Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FSTA	79 Outperform	£395.87M	19.48	4.82%	2.81%	6.94%	9.99%
MARS	71 Outperform	£423.96M	5.92	9.91%	―	-0.08%	―
XPS	70 Outperform	£700.93M	26.90	14.79%	3.54%	13.53%	-57.83%
HSW	69 Neutral	£153.94M	24.08	11.33%	0.60%	-3.82%	-51.23%
PPH	65 Neutral	£754.25M	34.35	7.17%	1.84%	6.14%	1.27%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
SSTY	56 Neutral	£10.88M	-22.64	-2.90%	―	0.82%	-27.59%

Safestay Corporate Events

Safestay PLC Announces Sale and Leaseback of Brighton Property

Safestay PLC has announced the sale and leaseback of its Brighton freehold property to a private investor for £3.125 million. This transaction is part of the company’s strategy to strengthen its balance sheet and support long-term growth by repaying debt and providing working capital. The sale aligns with previous asset sales and will enable Safestay to continue its £1.0 million investment in converting the property into a 170-bed hostel, set to open in summer 2026. The move is expected to create approximately 20 new jobs and contribute significantly to the local economy by attracting more visitors to Brighton.

The most recent analyst rating on (GB:SSTY) stock is a Hold with a £22.50 price target. To see the full list of analyst forecasts on Safestay stock, see the GB:SSTY Stock Forecast page.

Safestay PLC Sells Edinburgh Property, Adopts Franchise Model Amidst Challenging Market Conditions

Safestay PLC has announced the sale of its Edinburgh Cowgate property for £5.35 million, transitioning it to a franchise model under a new 10-year agreement. This move is part of Safestay’s strategy to strengthen its balance sheet and support long-term growth, while maintaining brand presence and operational integration through its sales and marketing platform. The company continues to face challenging trading conditions with price pressures impacting revenue, and is exploring strategic options such as further property disposals or equity fundraising to sustain growth and shareholder value.

The most recent analyst rating on (GB:SSTY) stock is a Hold with a £22.50 price target. To see the full list of analyst forecasts on Safestay stock, see the GB:SSTY Stock Forecast page.