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 stock has declined by 5% since the pitch, indicating that the long thesis did not materialize as expected. Despite the company's transition to a subscription model, the lack of positive price performance suggests that the anticipated re-rating to higher multiples has not occurred, and the market may not be recognizing the potential profitability improvements.
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