Shares in Web Travel (ASX.WEB) have risen more than 20% since July 28, 2026, when it provided a reassuring trading update and earnings guidance for the first six months of fiscal 2027. We assess whether the surge is justified and put it in context amid various uncertainties swirling around the group.

Why it matters: Despite the recovery, the stock price is just above the level it crashed down to on Feb. 6, 2026. That was when Web Travel revealed that the Spanish Tax Agency had commenced an audit of its Spanish subsidiary, sending the shares down a whopping 30% on the day.

  • In other words, open-ended fears about potential tax and regulatory liabilities in Spain are still materially depressing the shares. This has not been helped by management’s complete silence on the matter, nor by the geopolitical and economic uncertainties affecting bookings.
  • The recent update soothed some concerns about the fundamental front, with fiscal 2027 first-half revenue/total transaction volume projected to be 6.7%, from 6.5% a year ago, revenue up 11%-15% in EUR currency and EBITDA also looking up despite 9% currency headwinds.

The bottom line: We are retaining our $5.60 fair value estimate for no-moat Web Travel. While we cut our fiscal 2027 underlying EBITDA by 6% to $161 million, primarily due to adverse currency movements, our longer-term forecasts remain intact. Shares remain significantly undervalued.

  • The wildcard remains the potential fallout from the Spanish audit. Given the information vacuum, we can only go by management’s words (“it is a global business and is subject to tax reviews and audits on a regular basis”) and the board’s actions (announcing a buyback of up to $90 million).
  • Investors are nervous amid the fiasco of a high-profile travel intermediary peer. But Web Travel’s fundamentals are solid; it has $200 million in net cash, and the stock trades on less than 7 times our fiscal 2027 EBITDA estimate, despite our robust five-year CAGR projection of 13%.

Web Travel’s Fundamentals Intact Despite Unresolved Spanish Inquiry

Web Travel Group demerged its business-to-consumer units in September 2024 and is now a pure global online business-to-business accommodation bookings provider.

The group’s only operating business is its B2B booking platform, WebBeds. The business contracts supply from independent hotels, chains, and third-party providers, aggregates, and supplies the inventory to travel retailers. The business allows smaller hotels to increase distribution channels. For travel intermediaries, WebBeds increases the available inventory for end customers.

The B2B accommodation market is estimated to be $70 billion, when measured by total transaction volume, or TTV. Around 80% of this market is made up of independent hotels, representing a significant target market of suppliers lacking the distribution and marketing resources to maintain limited vacancies without a B2B distributor.

The group’s key objective is to grow market share through leveraging scale and technology to be one of the lowest-cost travel providers. Since its inception in 1998, Webjet has completed six acquisitions. Acquisitions in the B2B sector enable Web Travel’s WebBeds to quickly expand scale and inventory by gaining access to new hotel contracts. In turn, the company can expand its customer base.

This strategy has proven successful to date, with the most recent purchases of Jacktravel in 2017 for $330 million and Destinations of the World in 2018 for $240 million significantly boosting WebBeds’ B2B TTV. Unfortunately, this has concealed organic growth, the rate of which is difficult to ascertain given the highly competitive and cyclical nature of the industry.

On Feb. 6, 2026, Web Travel announced that the Spanish Tax Agency had commenced an audit of its Spanish subsidiary. Management is silent on what triggered the audit, the quantum of taxes being scrutinized, and the scope of the audit. On a risk-weighted basis, we do not believe the potential cost is likely to be material to our fair value estimate. For sensitivity purposes, every $100 million net tax liability/penalty would reduce our intrinsic assessment by 5% or around $0.30 per share.

Bulls Say

  • Investments made to increase the technological capabilities of the group generate scalability benefits as travel activities return to prepandemic numbers.
  • Growth potential is significant as WebBeds is currently the world’s second-largest B2B accommodation booking provider, but with only a 4% market share of the fragmented AUD 70 billion global B2B accommodation market.

Bears Say

  • Travel conditions are likely to remain volatile due to uncertain economic conditions.
  • Travel suppliers may increasingly leverage their own technological capabilities to engage in direct bookings with customers.
  • On Feb. 6, 2026, Web Travel announced that the Spanish Tax Agency had commenced an audit of its Spanish subsidiary. There is uncertainty about the potential outcome.

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