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Aroundtown Is Down 54% Even Though Sales Rose

Simply Wall St · 2d ago

Goldman Sachs cutting Aroundtown to Sell, while flagging higher refinancing costs and lower price targets, is the kind of headline that makes any holder check their portfolio twice. For Aroundtown shareholders, the loss over the past year was 54.1%, including dividends. If you had bought just before that downgrade cycle began, you would now be asking a simple question. Were the refinancing warnings already visible, and what does €5.6b of upcoming debt really mean for the business from here?

If the move has made Aroundtown harder to judge, start where the gap is still open and scan 191 high quality undervalued stocks.

The Argument Aroundtown Investors Were Really Weighing

The shares cost €3.29 at the start of the period, and Aroundtown holders were effectively choosing between two very different stories about where that price belonged.

The bullish narrative saw a Fair Value of €4.4, meaning a price that could line up if its optimistic assumptions played out. That view leaned on revenue growth of 2.7% a year and a future P/E of 11.8x based on earnings of €541.9 million by 2028.

The more cautious narrative pointed to a Fair Value of €3.12, a level implied by softer expectations. That camp focused on risks from refinancing costs and used assumptions like 1.5% revenue growth, a 20.9% profit margin, and a future P/E of 13.4x across roughly three years.

XTRA:AT1 1-Year Stock Price Chart
XTRA:AT1 1-Year Stock Price Chart

What The Results Changed For Aroundtown

The key new fact for Aroundtown was Q2 2026 earnings. Revenue was €386.4m against €381.6m a year earlier, yet net income moved from €132.4m to €31.1m and net margin fell from 34.7% to 8.0%. That profitability squeeze, alongside €5.6b of upcoming debt and higher refinancing costs flagged by banks, leaned toward the cautious refinancing case.

The takeaway for you is simple. When a property group leans on cheap borrowing, treat net margin and interest coverage as the claim to test at every result, not just headline revenue.

What You Would Be Paying For In Aroundtown Today

Aroundtown now trades at €1.42, with the selected Narrative arguing that its Fair Value sits above that level based on funding work and a reshaped portfolio mix.

The core bet is that liquidity actions, hotel reopenings and conversions, and ESG and tech projects lift rental demand and protect earnings. A buyer needs to judge whether refinancing costs and rating pressure stay manageable enough for those moves to outweigh the recent share price fall.

"Aroundtown's strategic actions, such as perpetual note exchanges and tender offers, have significantly strengthened its financial position, reducing future coupon payments and strengthening liquidity, which could lead to improved net margins. The company's proactive operational strategy, including the reopening and upgrading of hotel properties and converting office spaces into service apartments, is expected to contribute to robust operational growth and increased revenue."

That disagreement has a full argument behind it. → Uncover the higher Fair Value this Narrative argues for

How Could You Get There Earlier?

Passing on this one could have spared you a loss. Where might you find the opposite surprise? Start looking for companies whose prices leave room for a better outcome than investors expect. These three trade below our estimated value.

  • Company 1 - 33% below our estimate - focuses on expanding higher margin nutrition ranges while deepening export distribution channels.
  • Company 2 - 37% below our estimate - leans into AI hiring tools that automate more stages of recruitment workflows.
  • Company 3 - 34% below our estimate - grows fee income by launching funds that direct savings into real asset projects.

Those are three of them. See all 203 companies with the balance sheet to back it up →

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.