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Amadeus IT Group SA A AMS

Rating as of

Morningstar’s Analysis

Valuation
Currency in EUR
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1-Star Price

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5-Star Price

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Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Narrow-Moat Amadeus Still Struggles Against Pandemic Constraints; Shares Overvalued

Dan Wasiolek Senior Equity Analyst

Analyst Note

| Dan Wasiolek |

Pandemic headwinds continue to batter narrow-moat Amadeus, even as the firm begins to show signs of an impending demand recovery. Revenue was down 51.4%, to EUR 496.7 million, undershooting FactSet’s consensus of EUR 511 million, and EBITDA contracted 84.6% to EUR 53.7 million. The company reported an adjusted loss of EUR 0.18 per share, greater than consensus’s projected adjusted loss of EUR 0.11 per share. However, management indicated that March and April were the best performing months since the beginning of the pandemic in terms of bookings, and we still believe Amadeus’ revenue can near 2019 levels by 2023. As a result, we don’t plan material changes to Amadeus’ EUR 52 fair value estimate and see shares as overvalued.

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Company Profile

Business Description

Among the top three operators, Amadeus' 40%-plus market share in air global distribution system bookings is the largest in the industry. The GDS segment represents 56% of total prepandemic revenue (2019). The company has a growing IT solutions division (44% of 2019 sales) that addresses the airline, airport, rail, hotel, and business intelligence markets. Transaction fees, which are tied to volume and not price, account for the bulk of revenue and profits.

Contact
Salvador de Madariaga, 1
Madrid, 28027, Spain
T +34 915820100
Sector Technology
Industry Information Technology Services
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 16,550

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