What Are Your Moves Tomorrow, July 01, 2021

Sabre Corporation (SABR): This Small Cap Value Travel Recovery Stock Could Double Soon.


-Shares should benefit from the ongoing recovery in leisure travel.

-Corporate travel should rebound starting in second half 2021 and accelerate SABR’s path to positive FCF.

-Cost cuts/cloud migration should drive +7pt improvement in margins.

-Shares are undervalued on an EBITDA and FCF basis.

-Short sale volume Only on 6/30/21 was 51% see link Squeeze coming.

-Company just guided higher few days ago.

-Added many new partnerships last month.

-The stock is at a very attractive price thanks to last week airline stocks short selling.

-Both domestic and international trips have been increasing in each month of the year.

-Corporate Travel Should Rebound Starting in 2nd Half 2021 And Accelerate SABR’s Path to positive FCF

-Competitive Position Has Strengthened Since The Pandemic & Should Lead To Share Gains.

-Sabre introduced $200 million in annual cost cuts in 2020 that should, at 2019 revenue levels,

lead to a five point improvement in EBITDA margins. In addition, the migration to Google Cloud

and the renegotiation of the DXC contract

is leading to another $100 million of cost savings beginning in 2024. That should lead to

an additional 200 basis points of margin improvement

for a combined 700bps of EBITDA margin improvement compared to 2019 margin levels.

-Putting it all together, analysts estimate that Sabre should generate $1.3B in EBITDA

and $771M in free cash flow in 2024, both above levels in 2019 [our 2023 estimates are also above 2019 levels.]

/r/wallstreetbets Thread