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.]