Hostelworld takes a pummelling, is there any way back?
Trying to return a travel business to growth amid rising pressure from climate change activists and with the looming threat of the coronavirus seems a little overwhelming. But this is the task faced by Hostelworld. But with a strong core base delivering plenty of cash, it could present a terrific recovery play. If management succeeds, the upside could be substantial.
Hostelworld (LON: HSW) was established in 1999 and listed on both the Main Market of the London Stock Exchange and the Irish Stock Exchange in October 2015 at a share price of 185p and market capitalisation of £177m. By April 2018 the share price had climbed to a high of 420p, although it’s a puzzle to understand why given the modest sales growth since listing. Unfortunately, it’s been downhill ever since, with the shares and market capitalisation currently languishing at 94p and £90m respectively and probably set to go lower in the face of a turbulent stock market. That decline…