Industry Analysts Just Upgraded Their Hostelworld Group plc (LON:HSW) Revenue Forecasts By 12%

May 20, 2022
Source: Shutterstock

Celebrations may be in order for Hostelworld Group plc (LON:HSW) shareholders, with the analysts delivering a significant upgrade to their statutory estimates for the company. The revenue forecast for this year has experienced a facelift, with analysts now much more optimistic on its sales pipeline.

Following the upgrade, the latest consensus from Hostelworld Group's four analysts is for revenues of €54m in 2022, which would reflect a major 221% improvement in sales compared to the last 12 months. Prior to the latest estimates, the analysts were forecasting revenues of €49m in 2022. It looks like there's been a clear increase in optimism around Hostelworld Group, given the substantial gain in revenue forecasts.

View our latest analysis for Hostelworld Group

LSE:HSW Earnings and Revenue Growth May 20th 2022

We'd point out that there was no major changes to their price target of €1.78, suggesting the latest estimates were not enough to shift their view on the value of the business. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Hostelworld Group at €2.14 per share, while the most bearish prices it at €1.09. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. One thing stands out from these estimates, which is that Hostelworld Group is forecast to grow faster in the future than it has in the past, with revenues expected to display 221% annualised growth until the end of 2022. If achieved, this would be a much better result than the 28% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 14% per year. So it looks like Hostelworld Group is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The highlight for us was that analysts increased their revenue forecasts for Hostelworld Group this year. Analysts also expect revenues to grow faster than the wider market. Given that analysts appear to be expecting substantial improvement in the sales pipeline, now could be the right time to take another look at Hostelworld Group.

Analysts are clearly in love with Hostelworld Group at the moment, but before diving in - you should be aware that we've identified some warning flags with the business, such as recent substantial insider selling. For more information, you can click through to our platform to learn more about this and the 2 other flags we've identified .

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.