1-Star Price
PREMIUM
5-Star Price
PREMIUM
Economic Moat
PREMIUM
Stewardship
PREMIUM
We saw little in narrow-moat Sabre’s third-quarter results to materially alter our $16.60 fair value estimate or our view that its run-rate revenue will return to 2019 levels around 2024. We see shares as materially undervalued, although demand and share performance are likely to remain uneven until a widely distributed vaccine is available, which we think is a mid-2021 event.
Sabre holds the number-two share of global distribution system air bookings (38.8% as of the end of 2019 versus 37.1% in 2018). The global distribution system segment represented 73% of total 2019 revenue. The company also has a growing IT solutions division (27% of revenue) that focuses on the airline, hospitality, and travel agent end markets. Transaction fees, which are tied to volume and not price, account for the bulk of revenue and profits.
