Key Takeaways:
- On the Beach is expanding its online travel platform through city break destinations, market entry in Ireland, and technology upgrades.
- OTB stock could potentially reach £4.21 by September 2029, based on valuation assumptions.
- This represents a total return of 92% from today’s price of £2.19, with an annualized return of 18% over the next 3.9 years.
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On the Beach Group (OTB), a UK-based online travel agency, is transforming the package holiday market through platform expansion, growing the addressable market from 20 million to over 50 million passengers, and technology investments that enable rapid scaling across beach and city destinations.
The company serves UK and Irish customers through its digital-first platform, which includes beach package holidays, city breaks, and comprehensive booking services delivered through an automated, customer-centric technology stack.
Core offerings include traditional beach holidays with flights and accommodation, newly launched city break packages across 130 destinations, and value-added services like flexible booking options and customer support that compete with traditional travel agents.
The online travel specialist delivered first half 2025 sales of £640 million, representing 13% growth, with booking volumes up 11% and adjusted profit before tax increasing 23% to demonstrate strong operational leverage.
On the Beach demonstrates robust execution across market expansion initiatives under the leadership of CEO Shaun Morton and CFO Jonathan Wormald.
The company expanded its hotel inventory from 9,000 to 23,000 properties, added 19 airlines to the platform, increased its Net Promoter Score from 48 to 57, and successfully launched operations in Ireland with a £1.5 million brand investment.
OTB stock is up almost 50% over the last 12 months and is well-positioned to deliver outsized gains for shareholders.
Here’s why On the Beach stock could provide strong returns through 2029 as it capitalizes on addressable market expansion while scaling its technology platform across new destinations and geographies.
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What the Model Says for OTB Stock
We analyzed the upside potential for On the Beach stock using valuation assumptions based on its online travel platform capabilities and market expansion opportunities across city breaks, Ireland, and technology-enabled scaling.
Analysts recognize an opportunity ahead for OTB stock given its proven ability to grow faster than the UK package holiday market, its improved operational leverage, and its strategic expansion into new markets worth over 30 million additional passengers.
On the Beach’s technology-first approach provides multiple growth vectors. At the same time, recent platform upgrades enable rapid destination expansion that was previously impossible, creating a scalable path to double the business size.
Based on estimates of 9% annual revenue growth, 25% operating margins, and a normalized P/E valuation multiple of 11x, the model projects OTB stock could rise from £2.19 to £3.29.
That would be a 50% total return, or a 23% annualized return over the next 1.9 years.
Our Valuation Assumptions
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Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for OTB stock:
1. Revenue Growth: 9%
On the Beach delivered an exceptional first half 2025 performance, with 13% sales growth and 18% growth in the most recent quarter, significantly outpacing UK package holiday market expansion.
Growth drivers include expanding city breaks to 130 destinations, creating access to 20 million additional passengers; targeting the Ireland market with 6 million passengers; and technology upgrades enabling automated destination additions without proportional cost increases.
We used a 9% forecast, reflecting On the Beach’s ability to capture market share through superior customer experience while expanding into adjacent markets that leverage existing platform investments and brand equity.
2. Operating margins: 25%
In the first half of 2025, On the Beach’s EBITDA margin improved by four percentage points as the company demonstrated strong operational leverage with overhead growth of 7% versus booking volume growth of 11%.
OTB targets continued margin expansion toward its medium-term goal of 40% EBITDA margin through platform scaling benefits, including incremental bookings requiring minimal additional costs, reduced marketing cost per booking from improved brand recognition, and technology automation that reduces customer service requirements by 27%.
3. Exit P/E Multiple: 11x
On the Beach trades at reasonable multiples, reflecting its position as a leading UK online travel agency with demonstrated growth rates that exceed the broader market.
We maintain conservative valuation levels given OTB’s execution track record, significant addressable market expansion, and systematic approach to building competitive advantages through technology and customer experience.
Long-term competitive advantages from brand recognition, technology platform superiority, and operational efficiency should support reasonable valuations as the company scales toward its medium-term ambition of £2.5 billion in sales and £85 million in profit.
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What Happens If Things Go Better or Worse?
Different scenarios for OTB stock through 2030 show varied outcomes based on market expansion execution and competitive dynamics: (these are estimates, not guaranteed returns):
- Low Case: Slower market share gains and margin pressure lead to 11% annual returns
- Mid Case: Successful city break adoption and Ireland growth produce 18% annual returns
- High Case: Accelerated expansion and superior margin delivery drive 25% annual returns
Even in the conservative case, On the Beach stock offers attractive returns supported by proven market share gains and technology-enabled scaling that reduces incremental costs.
The upside scenario for OTB stock could deliver exceptional performance if the company rapidly scales city breaks to match beach holiday volumes while successfully replicating the UK model in Ireland and achieving target margin levels.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
