Hostelworld (LSE:HSW) is expected to continue its positive momentum into the 2024 financial year, analysts at Shore Capital said.
The online travel agent was on track for record performance when it updated on its third-quarter results in October last year.
Analysts believe this performance is enough to stand it in good stead for the final quarter of the year and the upcoming financial year.
It’s largely been caused by strong booking demand across all its regions and the subsequent market share gains that have come with it.
Revenues have had a slight inflationary uplift as the average value of bookings ticks higher – although this has been offset slightly by the wide mix of pricing on offer.
Additionally, the group has been investing in a social media platform to help guests, particularly those travelling solo, to connect with others.
This has helped land repeat bookings and higher customer retention rates, while also allowing the company to reduce its marketing costs.
In turn, profitability has improved compared to start-of-the-year expectations, a contributing factor to Shore Capital increasing its EPS forecast by 10% back in October.
Following this strong performance, Hostelworld (LSE:HSW) is expected to update investors in January, where it will likely provide a clear picture of the outlook for 2024.
Shore Capital rates the stock a ‘buy’ and believes that a fair-value price for its shares is around 175p, about a 35% upside to the 131p it is currently trading at.