Web Travel Group Ltd (ASX: WEB) shares were on fire on Wednesday.
The ASX 200 growth stock rocketed 12% higher to end the session at $5.26.
But if you thought the gains were over, think again.
That's because the team at Goldman Sachs believes that there is still significant upside ahead for investors.
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What is the broker saying about this ASX 200 growth stock?
Goldman Sachs was pleased with the WebBeds owner's full year results. It notes that its total transaction value (TTV) and revenue were ahead of expectations. It said:
WEB held its FY25 results on 27th May 2025, with TTV at A$4.9B +22% YoY (~-2% vs GSe and VA cons), Revenue +1% YoY (+1% vs GSe) and EBITDA of A$121m with 1H25 guidance of A$117-122m. Mgmt also noted first 8wks of FY26 trading was strong, with TTV (in EUR)/bookings up 28%/29% YoY, supported by +36% Americas region.
The broker also highlights that it is becoming more confident in the ASX 200 growth stock delivering on its medium term revenue to TTV margin guidance. It adds:
Re-balancing supply mix to negate Rev margin headwinds require FY26 EBITDA margin investment: Mgmt guided FY26 EBITDA margins of 44-47% (vs prev 48%) on account of investment in hotel contracting headcount in Asia Pacific/Americas regions. We expect sequential improvement into FY27, though remain below 50% mgmt guidance (GSe 48%). With that said, increased investment in direct contracting increases our confidence in medium term 6.5% Rev/TTV margin guidance (GSe FY27/28 ~6.5%).
Time to buy
In response to its results, the broker has retained its buy rating on the growth stock with an improved price target of $7.10. Based on its current share price of $5.26, this implies potential upside of 35% for investors over the next 12 months.
In addition, Goldman is forecasting a 2% dividend yield in FY 2026. This boosts the total potential return to 27%.
Commenting on its bullish stance on Web Travel, Goldman concludes:
Reflecting the above, we change our FY26/27 TTV/Revenue ~1% and FY26 EBITDA margin is lowered from 48% to 45.5% (44-47% guidance), resulting in -6% EBITDA revisions. Our valuation methodology is unchanged, but we roll valuation forward to FY27 earnings, marking to market multiple vs peers. WEB is trading on FY27e PE of 15x vs FY25-28e EPS CAGR of 25%, implying attractive 0.6x PEG. Remain Buy rated with a new TP of A$7.1 (prev A$7.0), implying +35% TSR.
