Insights

Why Sabre Stock Nose-Dived Today

What happened
Shares of travel industry technology specialist Sabre (NASDAQ: SABR) fell by more than 11% on Tuesday. Although at first glance that was a surprise given that the company scored beats on both the top and bottom lines in its first quarter, investors found several items concerning and traded the stock down accordingly.
So what
Now that we appear to be in a less threatening stage of the COVID-19 pandemic, the travel industry is roaring back to life. In unveiling its quarterly figures this morning, Sabre revealed that its revenue was just under $585 million for the period — a year-over-year improvement of almost 80%. That was on the back of a 67% rise in total bookings.
Image source: Getty Images.

The company did post an adjusted net loss, but this was significantly narrower than the first-quarter 2021 result. It came in at slightly more than $93 million ($0.25 per share) against the year-ago shortfall of over $228 million.
Both figures topped analyst expectations. On average, prognosticators following the stock were modeling a bit over $536 million for revenue and an adjusted loss of $0.34 per share.
Now what
As for its immediate future, Sabre maintained its existing guidance, and that might have been problematic for investors. The company presented three scenarios for its full-year 2022 — if it hits 50%, 60%, and 70% of the total bookings it logged in 2019.
Even in the latter, best-case scenario, the company is only anticipating it will earn at most $3.1 billion in revenue. This is well under the nearly $4 billion of 2019. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the 70% silo is forecast at over $165 million. Again, that’s very much lower than the 2019 result, which was $857 million.
Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. –

What happened

Shares of travel industry technology specialist Sabre (NASDAQ: SABR) fell by more than 11% on Tuesday. Although at first glance that was a surprise given that the company scored beats on both the top and bottom lines in its first quarter, investors found several items concerning and traded the stock down accordingly.

So what

Now that we appear to be in a less threatening stage of the COVID-19 pandemic, the travel industry is roaring back to life. In unveiling its quarterly figures this morning, Sabre revealed that its revenue was just under $585 million for the period — a year-over-year improvement of almost 80%. That was on the back of a 67% rise in total bookings.

Image source: Getty Images.

The company did post an adjusted net loss, but this was significantly narrower than the first-quarter 2021 result. It came in at slightly more than $93 million ($0.25 per share) against the year-ago shortfall of over $228 million.

Both figures topped analyst expectations. On average, prognosticators following the stock were modeling a bit over $536 million for revenue and an adjusted loss of $0.34 per share.

Now what

As for its immediate future, Sabre maintained its existing guidance, and that might have been problematic for investors. The company presented three scenarios for its full-year 2022 — if it hits 50%, 60%, and 70% of the total bookings it logged in 2019.

Even in the latter, best-case scenario, the company is only anticipating it will earn at most $3.1 billion in revenue. This is well under the nearly $4 billion of 2019. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the 70% silo is forecast at over $165 million. Again, that’s very much lower than the 2019 result, which was $857 million.

Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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