A month has gone by since the last earnings report for Sabre (SABR Quick QuoteSABR - Free Report) . Shares have added about 28.7% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Sabre due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Sabre Posts Narrower-Than-Expected Q3 Loss, Sales Up Y/Y

Sabre Corporation reported a loss for the third quarter of 2022 and lower-than-expected top-line results raising concerns for slow post-pandemic recovery.
The company’s adjusted loss was 25 cents per share, which came in line with the Zacks Consensus Estimate. The figure was narrower than the year-ago quarter’s loss of 50 cents per share.

Sabre reported revenues of $663.4 million for the third quarter, 50% higher than $441.1 million in the year-ago period. This year-over-year surge in the top line reflects a significant improvement in global air, hotel and other bookings. However, the top line fell short of the consensus mark of $695.8 million.

Quarter in Detail

The Travel Solutions segment’s revenues increased 55% year over year to $604 million, primarily on the gradual recovery in global air and other bookings, partially offset by reduced revenues due to the sale of the AirCentre portfolio in February 2022. The segment’s revenues also benefited from favorable rate impacts as international and corporate bookings improved.

Distribution’s (a sub-division of Travel Solutions) revenues improved to $431 million from $245 million in the third quarter of 2021. This was chiefly driven by the gradual recovery in bookings and an increase in average booking fees due to a shift in the booking mix.

IT Solutions’ (a sub-division of Travel Solutions) revenues were $173 million, up 19% from the year-ago quarter’s $145 million. This increase was primarily driven by the gradual recovery in passengers boarded. The number of boarded airline passengers — a key revenue metric for the IT Solutions division — increased to 179.9 million from 115.6 million in the prior-year quarter.

The Hospitality Solutions segment’s revenues totaled $67 million compared with the year-ago quarter’s $55 million. This upside was mainly fueled by the increase in central reservation system transactions, which rose to 31.6 million from 26.7 million in the year-ago quarter.

Sabre reported an adjusted operating income of $0.7 million, significantly improving from the operating loss of $102.6 million posted in the year-earlier period.

Adjusted EBITDA improved from a negative $54.9 million reported a year ago to a positive $34.3 million. This improvement was driven by an increase in revenues.

Balance Sheet and Cash Flow

Sabre exited the September-end quarter with cash, cash equivalents and restricted cash of $804 million compared with the previous quarter’s $1.01 billion.

In the third quarter, the company utilized $102 million in cash for operational activities and generated negative free cash flow of $123 million.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in fresh estimates.

The consensus estimate has shifted -15.31% due to these changes.

VGM Scores

At this time, Sabre has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.

Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Sabre has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Sabre belongs to the Zacks Internet - Software and Services industry. Another stock from the same industry, VeriSign (VRSN Quick QuoteVRSN - Free Report) , has gained 13.5% over the past month. More than a month has passed since the company reported results for the quarter ended September 2022.

VeriSign reported revenues of $356.9 million in the last reported quarter, representing a year-over-year change of +6.8%. EPS of $1.58 for the same period compares with $1.40 a year ago.

For the current quarter, VeriSign is expected to post earnings of $1.53 per share, indicating a change of +3.4% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for VeriSign. Also, the stock has a VGM Score of B.