While Hostelworld Group plc (LON:HSW) might not have the largest market cap around , it received a lot of attention from a substantial price movement on the LSE over the last few months, increasing to UK￡1.70 at one point, and dropping to the lows of UK￡1.37. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Hostelworld Group's current trading price of UK￡1.41 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Hostelworld Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Hostelworld Group

What Is Hostelworld Group Worth?

Great news for investors – Hostelworld Group is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. we find that Hostelworld Group’s ratio of 13.73x is below its peer average of 23.24x, which indicates the stock is trading at a lower price compared to the Hospitality industry. However, given that Hostelworld Group’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Hostelworld Group?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. However, with a relatively muted profit growth of 2.6% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Hostelworld Group, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since HSW is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. However, there are also other factors such as capital structure to consider, which could explain the current price multiple.