Digital Booking And AI Will Redefine Global Accommodations

Key Takeaways

• Growing digital payments and AI-driven efficiencies are enhancing margins, operational leverage, and user experience, fueling further revenue and EBITDA improvements.
  
• Expansion of direct property inventory and the B2B segment is solidifying exclusive supply, boosting high-margin recurring revenue, and strengthening the brand's global footprint.
  
• Heavy reliance on both volatile international markets and acquisition integration poses ongoing risks to revenue growth, margins, and long-term profitability.

Catalysts

Operates a marketplace for vacation rentals that connects users searching for a place to stay in Luxembourg and internationally.

• Rapid, ongoing adoption of digital booking and payment solutions (notably HomeToGo Payments, which now processes 30% of platform volume, up 18pp YoY) is streamlining the user experience, increasing conversion rates, reducing fraud/cancellations, and boosting free cash flow and margins-likely driving revenue growth, operating leverage, and improved net margins.
  
• Preference for alternative accommodations over hotels continues to expand, evidenced by HomeToGo's record booking revenue backlog (+25% in two years), growth in average basket size, and ability to attract a global, multi-demographic user base-supporting robust future revenue growth and platform expansion.
  
• HomeToGo's successful transition from third-party advertising partnerships to direct inventory (integration of Vrbo/Expedia into Onsite, acquisition of ferienhaus.de, and upcoming Interhome consolidation) significantly strengthens exclusive property supply, enables higher Onsite take rates (improved to 13.8% YoY), and enhances brand positioning-likely lifting net margins and revenue per user.
  
• Technological advancement and increased AI adoption are driving efficiency gains in product development and marketing (AI-powered B2C marketplace, B2B SaaS innovation like Smoobu and Doppelganger with ARR and IFRS revenue both up >30%), resulting in rising adjusted EBITDA and margin improvement despite strategic investments for growth.
  
• Strategic expansion of the HomeToGo_PRO B2B segment (35% of group IFRS revenue, up from 29% YoY, with volume-based business up 45% YoY and SaaS ARR up >30%) leverages the professionalization of hosts/property managers and aggregation of unique supply, positioning the company for recurring, high-margin revenue streams and future EBITDA growth.

HomeToGo Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming HomeToGo's revenue will grow by 31.1% annually over the next 3 years.
• Analysts assume that profit margins will increase from -19.2% today to 3.9% in 3 years time.
• Analysts expect earnings to reach €18.3 million (and earnings per share of €0.09) by about August 2028, up from €-40.3 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting €20.7 million in earnings, and the most bearish expecting €13.8 million.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 56.9x on those 2028 earnings, up from -6.9x today. This future PE is greater than the current PE for the DE Hospitality industry at 23.1x.
• Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 6.16%, as per the Simply Wall St company report.

HomeToGo Future Earnings Per Share Growth

Risks

• The company's substantial exposure to currency fluctuations-particularly the weaker U.S. dollar impacting 20% of revenues-poses a long-term risk that could depress reported revenue and earnings, especially as HomeToGo expands internationally and FX headwinds persist.
  
• Strategic focus on profitability over growth in the core B2C Marketplace segment has resulted in flat or even declining revenues in that area, indicating potential saturation, market share losses, or increased competitive pressure, which could limit long-term top-line growth and erode margins.
  
• High marketing efficiency gains have largely come from deliberate cuts in marketing spend, which may not be sustainable indefinitely; reducing marketing in a competitive sector raises the risk of losing visibility, traffic, and future revenue momentum as acquisition costs potentially increase again.
  
• Integration risk from significant acquisitions like Interhome-while intended to deliver scale and recurring revenue-could result in execution challenges, higher-than-expected costs, or slower synergies, negatively affecting margins and overall group profitability.
  
• Rapid growth in the B2B/HomeToGo_PRO segment is fueling overall results, but an increasing reliance on software and service revenues from vacation rental professionals exposes the company to cyclical downturns in travel demand, and to industry-wide risks such as regulatory crackdowns or shrinking property supply, potentially reducing revenue and lowering long-term earnings.

Valuation

• The analysts have a consensus price target of €4.1 for HomeToGo based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of €5.2, and the most bearish reporting a price target of just €3.1.
  
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €473.9 million, earnings will come to €18.3 million, and it would be trading on a PE ratio of 56.9x, assuming you use a discount rate of 6.2%.
  
• Given the current share price of €1.6, the analyst price target of €4.1 is 61.0% higher.
  
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.