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Metropolis analysts see a variety of worth in Hostelworld (LSE:HSW) inventory proper now. The truth is, simply yesterday (13 April), Berenberg Financial institution gave it a Purchase ranking and a 171p worth goal.
That is truly barely decrease than the typical dealer 12-month goal of 181p. Evaluating this to the present worth of 101p, we see a 79% distinction.
Apparently, all eight analysts protecting the inventory are overwhelmingly bullish.
Supply: TradingView
After all, brokers aren’t all the time proper a few inventory, not to mention correct at foreseeing its near-term worth trajectory. However the disconnect is putting. So what do they see in Hostelworld?
From one to a few
As a reminder, Hostelworld is a small-cap inventory with a market cap of £125m. It operates a platform the place travellers can e book to remain at over 14,700 hostels throughout greater than 3,100 cities worldwide.
Final yr, internet income rose 2% yr on yr to €93.8m, with bookings rising 1% to 7m. Nevertheless, adjusted revenue after tax fell 14% to €15m.
Admittedly, on the floor, these numbers don’t appear significantly spectacular. However whereas Hostelworld spent virtually all of 2025 with only one income generator (hostels, clearly), this yr it has three.
It now affords 18,000+ finances places (together with lodges and guesthouses) via a third-party stock provider. Whereas the fee charge is decrease on these, it ought to nonetheless drive extra bookings and income.
And there’s Social Passes, which the corporate launched in November. By means of these, individuals who haven’t booked on Hostelworld can entry its social community, permitting them to message, plan journeys and be part of occasions with different travellers staying in the identical location.
One-time funds to entry the social community vary from €4.99 per week to €59.99 for the yr (for digital nomads or long-term travellers). The Social Move provides a brand new subscription-type income stream.
Moreover, Hostelworld has acquired OccasionGenius for $12m. It is a business-to-business occasion discovery platform that has a ton of dependable native occasions worldwide. Ideally, this knowledge ought to encourage travellers to e book journeys.
Community results
It’s this burgeoning social factor the place I believe a variety of future shareholder worth might lie. As a result of it’s making a community impact, the place the platform turns into extra helpful as extra folks use it. Extra customers additionally develop the platform’s proprietary knowledge set.
On the finish of 2025, Hostelworld’s social group reached 3.4m members. Messaging between them grew 81% yr on yr, with members reserving roughly twice as regularly as non-members. And Social Move members are additionally subsequently reserving via Hostelworld.
Administration stated that Q1 buying and selling had been sturdy, with a 3% rise in bookings anticipated alongside a 12% enhance in income. So progress appears to be selecting up, pushed by the social journey community.
If extra folks e book straight via the app, this could decrease advertising prices and enhance long-term margins.
Very low cost valuation
The largest danger to near-term progress is the Center East battle, significantly inflation that may additional injury discretionary spending. It might additionally lead to increased gas prices and subsequently affect flight pricing.
Nevertheless, with the inventory buying and selling at simply 6.9 instances subsequent yr’s forecast earnings, I believe a variety of danger is already priced in. There’s additionally a 3.4% ahead dividend yield.
Placing all this collectively, I reckon Hostelworld deserves additional analysis as a deep worth/restoration play.
