As of May 31, 2025, Hostelworld Group PLC has a Discounted Cash Flow (DCF) derived fair value of $153.68 per share. With the current market price at $120.50, this represents a potential upside of 27.5%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $111.72 |
| DCF Fair Value (10-year) | $153.68 |
| Potential Upside (5-year) | -7.3% |
| Potential Upside (10-year) | 27.5% |
| Discount Rate (WACC) | 7.7% - 10.1% |
Revenue is projected to grow from $92 million in 12-2024 to $204 million by 12-2034, representing a compound annual growth rate of approximately 8.3%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2024 | 92 | 1% |
| 12-2025 | 104 | 13% |
| 12-2026 | 113 | 8% |
| 12-2027 | 122 | 9% |
| 12-2028 | 133 | 9% |
| 12-2029 | 151 | 13% |
| 12-2030 | 162 | 8% |
| 12-2031 | 170 | 5% |
| 12-2032 | 179 | 5% |
| 12-2033 | 194 | 8% |
| 12-2034 | 204 | 5% |
Net profit margin is expected to improve from 8% in 12-2024 to 12% by 12-2034, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2024 | 7 | 8% |
| 12-2025 | 12 | 12% |
| 12-2026 | 13 | 12% |
| 12-2027 | 14 | 12% |
| 12-2028 | 16 | 12% |
| 12-2029 | 18 | 12% |
| 12-2030 | 19 | 12% |
| 12-2031 | 20 | 12% |
| 12-2032 | 21 | 12% |
| 12-2033 | 23 | 12% |
| 12-2034 | 24 | 12% |
with a 5-year average of $5 million. Projected CapEx is expected to maintain at approximately 14% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2025 | 7 |
| 12-2026 | 9 |
| 12-2027 | 11 |
| 12-2028 | 14 |
| 12-2029 | 17 |
| 12-2030 | 19 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 4 |
| Days Inventory | 0 |
| Days Payables | 0 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 2025 | 20 | 0 | 14 | 4 | 1 |
| 2026 | 23 | 0 | 16 | 0 | 7 |
| 2027 | 26 | 1 | 17 | 0 | 9 |
| 2028 | 31 | 1 | 18 | 0 | 12 |
| 2029 | 36 | 1 | 21 | 0 | 14 |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 111.72 | -7.3% |
| 10-Year DCF (Growth) | 153.68 | 27.5% |
| 5-Year DCF (EBITDA) | 154.75 | 28.4% |
| 10-Year DCF (EBITDA) | 185.91 | 54.3% |
Is Hostelworld Group PLC (HSW.L) a buy or a sell? Hostelworld Group PLC is definitely a buy. Based on our DCF analysis, Hostelworld Group PLC (HSW.L) appears to be significantly undervalued with upside potential of 27.5%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider a strong buy at the current market price of $120.50.