As of May 31, 2025, Hostelworld Group PLC's estimated intrinsic value ranges from $78.70 to $159.80 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $153.68 | +27.5% |
| Discounted Cash Flow (5Y) | $111.72 | -7.3% |
| Dividend Discount Model (Multi-Stage) | $115.44 | -4.2% |
| Dividend Discount Model (Stable) | $78.70 | -34.7% |
| Earnings Power Value | $159.80 | +32.6% |
Is Hostelworld Group PLC (HSW.L) undervalued or overvalued?
With the current market price at $120.50, the stock appears to be fairly valued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Hostelworld Group PLC's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 4.0% | 4.5% |
| Equity market risk premium | 6.0% | 7.0% |
| Adjusted beta | 0.63 | 0.73 |
| Cost of equity | 7.7% | 10.1% |
| Cost of debt | 4.6% | 5.0% |
| Tax rate | 3.5% | 15.5% |
| Debt/Equity ratio | 0 | 0 |
| After-tax WACC | 7.7% | 10.1% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $133 | $164M | 80.4% |
| 10-Year Growth | $183 | $229M | 64.8% |
| 5-Year EBITDA | $184 | $231M | 86.1% |
| 10-Year EBITDA | $221 | $279M | 71.0% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $21M |
| Discount Rate (WACC) | 10.1% - 7.7% |
| Enterprise Value | $207M - $270M |
| Net Debt | $(8)M |
| Equity Value | $215M - $278M |
| Outstanding Shares | 1M |
| Fair Value | $166 - $215 |
| Selected Fair Value | $159.80 |
| Metric | Value |
|---|---|
| Market Capitalization | $156M |
| Enterprise Value | $149M |
| Trailing P/E | 25.10 |
| Forward P/E | 15.31 |
| Trailing EV/EBITDA | 9.80 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | -100.00% |
| Debt-to-Equity Ratio | 0.00 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $46.10 |
| Discounted Cash Flow (5Y) | 25% | $27.93 |
| Dividend Discount Model (Multi-Stage) | 20% | $23.09 |
| Dividend Discount Model (Stable) | 15% | $11.81 |
| Earnings Power Value | 10% | $15.98 |
| Weighted Average | 100% | $124.91 |
Based on our comprehensive valuation analysis, Hostelworld Group PLC's weighted average intrinsic value is $124.91, which is approximately 3.7% above the current market price of $120.50.
Key investment considerations:
Given these factors, we believe Hostelworld Group PLC is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.