Inspirato coverage initiated at overweight by Piper Sandler, hold by Stifel

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Piper Sandler has initiated coverage of luxury travel service Inspirato (ISPO) with an overweight rating, while Stifel started coverage with a hold.

Inspirato offers a subscription service for affluent travelers that allows them to book trips through its platform, which includes high-end excursions and accommodations at luxury hotels and vacation homes. The company also provides property management services for participating luxury home owners.

The company went public on Feb. 14 through a merger with SPAC Thayer Ventures.

The company’s two leading subscriptions services are Club and Pass. Inspirato Club, which costs $7,200 annually, requires subscribers to pay a nightly rate. Pass, which costs $30,000 per year, includes nightly rates. Both services include amenities such as housekeeping, trip planning and concierge services.

Piper said it saw ISPO as “well-positioned to benefit from pent-up travel demand” and that the addressable market for luxury travel was around $100B on the demand side and $65B on the supply side. It said it saw growth opportunities in the company adding more subscription products, developing corporate incentive travel, and partnering with private clubs.

“The subscription pricing model is unique in the space and offers value to those who travel frequently. The recurring revenue profile adds visibility and defensiveness to the model as well,” wrote Piper analysts, who have a price target of $12 for the stock.

Stifel, meanwhile, was more guarded in its assessment, giving the stock a price target of $10.

“While we hold a generally favorable view of the company and business model, we see potential operational risk related to the pace of supply growth, path to profitability, and progression of the company’s higher-priced Pass subscription,” Stifel analysts wrote in their note.

“In the intermediate term, supply acquisition may present a growth challenge in an increasingly competitive environment for luxury and alternative accommodations as the recovery in travel demand continues,” they added.

For a more bearish take on the stock, check out SA contributor Edward Vranic’s “Inspirato: Warrant Price Suggests Impending Collapse of Stock”.