Sabre Corporation ( SABR Quick Quote SABR - Free Report) last week inked an agreement with JetBlue Airways Corporation ( JBLU Quick Quote JBLU - Free Report) , wherein the former will assist in the latter’s successful technology migration to Sabre’s Revenue Optimizer solution.
Sabre’s Revenue Optimizer solution is a cloud-based revenue management platform that allows airlines to optimize all revenue streams, maximize market share and improve real-time data analysis. Therefore, the implementation of the solution will help JetBlue better forecast, analyze and optimize its revenue streams.
Pandemic-Led Disruptions Hurt Sabre’s Growth
The pandemic-induced global lockdowns have compelled people to lay off their travel plans and stay at homes to contain the spread of the virus. This has heavily dampened the travel industry’s growth prospects, including travel network companies like Sabre.
Moreover, a large part of the company’s business is linked with air traffic, which directly exposes it to the current crisis. The company’s December 2020-end quarterly results were adversely impacted by to the coronavirus pandemic.
Sabre’s travel network revenues plummeted 69% year over year and distribution revenues plunged 79% during fourth-quarter fiscal 2020. Its total bookings slumped 79% to 26.31 million chiefly on the sharp decline of 80% in net air bookings, and 79% in lodging, ground, and sea bookings. Moreover, the number of boarded airline passengers, a key revenue metric for its IT Solutions division, fell 58% year over year.
New Deal Wins to Aid Recovery
Sabre’s shares have soared 158.6% in the past year compared with the Zacks
Internet - Software and Services industry’s rally of 51.2%.
Growing traction of Sabre’s travel network solutions among airlines globally is likely to help the company stay afloat in the current uncertain environment. The latest deal with JetBlue adds to the string of agreements entered into by the company in the past few months.
In December 2020, Sabre inked an agreement with the Lufthansa Group airlines to continue distributing the latter’s content to travel agencies and corporate travel departments through its global distribution system.
In the same month, LATAM Airlines, South America's longest-serving airline, implemented its Select Shopping solutions on the carrier's website and call center. Additionally, Gulf Air, the national carrier of the Kingdom of Bahrain, introduced updated fares using Sabre’s branded fares technology.
Moreover, last November, Sabre's Revenue Optimizer solution was implemented by Croatia Airlines and GOL Airlines, Brazil’s leading domestic airline. Further, the company extended its partnership with Qantas to provide information to agents about the airline’s fares, products and services.
However, Sabre’s near-term prospects might remain gloomy and the uncertainty in the travel industry due to the global pandemic is expected to hurt the top line.
Zacks Rank & Key Picks
Sabre currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader technology sector include
Dropbox ( DBX Quick Quote DBX - Free Report) and Adobe ( ADBE Quick Quote ADBE - Free Report) , each carrying a Zacks Rank of 2 (Buy), at present. You can see . the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
The long-term earnings per share growth rate for Dropbox and Adobe is pegged at 40.9% and 19%, respectively.
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