eDreams ODIGEO
Thesis
eDreams is transforming its business from a transactional model to a subscription model, which has led to a significant increase in subscriber count and profitability. The company trades well below peer multiples and has the potential to re-rate to at least Booking.com's 17x EBITDA multiple, driven by its asset-light, high-margin business model and strong cash flow generation.
Did it work?
The core of the pitch was a valuation re-rating toward peer multiples (~17x EBITDA), yet 28 months later the stock is down 8.2%, meaning the anticipated multiple expansion never materialized and a long position lost money. The subscription transformation and profitability gains cited were largely already underway at the time of the pitch, so the incremental claim — that the market would reward the model with a peer-like multiple — is what needed to play out, and it did not. While the business fundamentals likely continued improving, the investment conclusion (upside from re-rating) was not validated.