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(Sharecast News) - Berenberg cut its price target on Hostelworld to 150p from 171p on Wednesday, citing a weaker Q3 shaped by geopolitical headwinds, though it kept its 'buy' rating on the stock and said the group's shift to its socialdriven platform continues to underpin the longterm investment case.
The German bank said the prolonged Middle East conflict weighed on Q3 trading, prompting it to lower FY26-28 underlying earnings forecasts by 16%, 28% and 24%, assuming a worstcase scenario of no improvement through FY27-FY28.
Even so, Berenberg argued that the social platform remains a key structural growth driver, with social transactions up 10% yearonyear in the quarter and now accounting for around twothirds of total bookings.
Q3 net revenue rose 7% to 27.9m, supported by an 11% increase in average transaction value on the back of higher commission rates. Total transactions fell 2%, reflecting a 1% drag from the Middle East conflict, a 1% hit from weaker longhaul travel between Europe and the Americas, and a 1% impact from changes to AI search behaviour. Adjusted EBITDA, however, still grew 4% to 8.3m, with a 30% margin and net cash of 3m.
Berenberg highlighted continued strength in app bookings, up to 64% of bed nights, and said increased marketing investment to drive socialcustomer growth was delivering strong payback. Management now assumes no improvement in Middle East conditions through FY26-FY27, guiding to FY26 EBITDA of 20m to 21m and midsingledigit revenue growth next year.
The analysts also cut their revenue growth forecasts to 10% for FY26 and 4% for FY27-FY28, but said the shares still look inexpensive at around 10x FY26 earnings, with upside if geopolitical pressures ease.
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Canaccord Genuity bumps up target price on Netcall
Analysts at Canaccord Genuity lifted their target price on Netcall to 170p from 160p on Wednesday, saying accelerating cloud momentum and a stronger mediumterm earnings profile support further upside.
Canaccord Genuity said FY26 delivered another year of solid progress, with revenues up 20% to £57.7m, and organic growth accelerating to 14% in the second half. Cloud remained the key driver, with sales up 37% and cloud ACV rising 37% to £46.3m, now accounting for around 86% of total ACV. Adjusted underlying earnings increased 24% to £9.6m, margins improved to 17%, earnings per share rose 17% to 4.3p, and strong cash generation left Netcall with £21m net cash.
The Canadian bank said momentum had carried into FY27, supported by a record pipeline and a sizeable orderbook, with around £51m of nearterm contracted revenue covering roughly 76% of its FY27 forecast. A further £48m in multiyear orders and a net revenue retention rate of 115% underpin confidence in continued doubledigit growth.
Operationally, FY26 saw record new customer wins, strong up and crossselling, and early benefits from the integration of Jadu, including £1m of cost savings. AIrelated sales tripled yearonyear, with usage up 145%, reinforcing Netcall's positioning as regulated enterprises adopt AI within secure, governed platforms.
Canaccord Genuity, which kept its 'buy' rating on the stock, kept its FY27 estimates unchanged and introduced FY28 forecasts, modelling revenue growth of around 11% and EBIT expansion of 13%, with margins approaching 18%.
The broker hoghlighted that the shares, up only 2% over 12 months and trading on CY27 enterprise value/sales of 2.6x and an excash price-to-earnings of 19.9x, do not fully reflect Netcall's strengthening organic growth and margin trajectory.
Reporting by Iain Gilbert at Sharecast.com