Analysts appear to be toasting the prospect of trading on Trivago with fairly hefty glasses Mulled Wine, ahead of its recently announced decision to IPO.

The Germany-based hotel search engine intends to place itself on NASDAQ in the US under the TRVG symbol.

The offering size, according to documents filed by Dutch holding company Travel BV, is $400 million – a figure that is lower than what some analysts have previously forecast.

Class A shares in the company will be sold to the public by its existing management team, whilst the remaining Class B shares that are owned by Expedia Inc will remain with the global travel group.

Some of the beancounters watching the company are enthused by what they call its “leadership position” and that it holds a “large runway for growth, and ability to scale margins over time”.

The share value is tipped to be in the $11-$16 range, broadening the $13-$15 per share being touted on the company’s roadshow for the 28.5 million units that will be put on the table through the IPO.

One of the leading tech stock analyst groups, SIG, says Trivago’s “secret sauce” has been to use advertising across multiple formats, such as search, which have worked alongside its “Trivago Man” TV campaigns.

An analyst note says:

“We see this expertise around TV and search differentiating TRVG’s ability to penetrate markets and drive growth and has allowed the company to create a moat in a highly competitive space.”

Yet one of the biggest challenge for a post-IPO Trivago, SIG claims, is if it can show any “leverage on ad spend” (it currently splashes out a massive 88% of revenue on marketing) without impacting its strong growth in revenue.

Such a strategy could be possible in its more established markets, such as Europe and the Americas, SIG says, with margins capable of growing to 30% and 22% in those territories respectively between 2016 and 2018.

Still, warnings about the short and medium-term future remain, as they do for any online travel business – SIG says risks include the inevitable elephant in the room on hotel search, Google, as well as the direct-booking initiatives of hotels and rise of alternative accommodation platforms.