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Why Is Sabre (SABR) Down 30.3% Since Last Earnings Report?
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It has been about a month since the last earnings report for Sabre (SABR - Free Report) . Shares have lost about 30.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Sabre due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Sabre Posts Wider-Than-Expected Q4 Loss, Sales Miss
Sabre reported a wider-than-expected loss for the fourth quarter of 2022. Additionally, the dim top-line guidance for the first quarter of 2023 raises concerns for the slow post-pandemic recovery of Sabre.
The company’s adjusted loss was 36 cents per share, which came higher than the Zacks Consensus Estimate of a loss of 32 cents. However, the figure was narrower than the year-ago quarter’s loss of 47 cents per share.
Sabre reported revenues of $631 million for the fourth quarter, 26% higher than $501 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 $673.9 million.
Quarter in Detail
The Travel Solutions segment’s revenues increased 27% year over year to $574 million, primarily on the gradual recovery of global air and other travel bookings, partially offset by 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 $417 million from $286 million in the fourth quarter of 2021. This was chiefly driven by the gradual recovery of 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 $157 million, down 5% from the year-ago quarter’s $165 million. This decline was primarily due to lower revenues from a change in Russian law and lower Commercial and Operations revenues, primarily due to the sale of the AirCentre portfolio.
The aforementioned negative factors for IT Solutions’ dismal performance were partially offset by higher reservation revenues from the ongoing recovery in passengers boarded. The number of boarded airline passengers — a key revenue metric for the IT Solutions division — increased 30% year over year to 168 million.
The Hospitality Solutions segment’s revenues totaled $65 million compared with the year-ago quarter’s $54 million. This upside was mainly fueled by the increase in central reservation system transactions, which rose 16% to 27 million.
Sabre reported an adjusted operating loss of $30.3 million, significantly improving from the operating loss of $68.4 million posted in the year-earlier period. Adjusted EBITDA improved from a negative $26.4 million reported a year ago to a positive $1.5 million. This improvement was driven by an increase in revenues.
Balance Sheet and Cash Flow
Sabre exited the December-end quarter with cash, cash equivalents and restricted cash of $815.9 million compared with the previous quarter’s $804 million.
In the fourth quarter, Sabre generated operating and free cash flows of $38 million and $22 million, respectively. In the full-year 2022, the company utilized $276 million in cash for operational activities and generated negative free cash flow of $346 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -58.97% due to these changes.
VGM Scores
At this time, Sabre has a great Growth Score of A, 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 B. 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. It's no surprise Sabre has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is Sabre (SABR) Down 30.3% Since Last Earnings Report?
It has been about a month since the last earnings report for Sabre (SABR - Free Report) . Shares have lost about 30.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Sabre due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Sabre Posts Wider-Than-Expected Q4 Loss, Sales Miss
Sabre reported a wider-than-expected loss for the fourth quarter of 2022. Additionally, the dim top-line guidance for the first quarter of 2023 raises concerns for the slow post-pandemic recovery of Sabre.
The company’s adjusted loss was 36 cents per share, which came higher than the Zacks Consensus Estimate of a loss of 32 cents. However, the figure was narrower than the year-ago quarter’s loss of 47 cents per share.
Sabre reported revenues of $631 million for the fourth quarter, 26% higher than $501 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 $673.9 million.
Quarter in Detail
The Travel Solutions segment’s revenues increased 27% year over year to $574 million, primarily on the gradual recovery of global air and other travel bookings, partially offset by 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 $417 million from $286 million in the fourth quarter of 2021. This was chiefly driven by the gradual recovery of 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 $157 million, down 5% from the year-ago quarter’s $165 million. This decline was primarily due to lower revenues from a change in Russian law and lower Commercial and Operations revenues, primarily due to the sale of the AirCentre portfolio.
The aforementioned negative factors for IT Solutions’ dismal performance were partially offset by higher reservation revenues from the ongoing recovery in passengers boarded. The number of boarded airline passengers — a key revenue metric for the IT Solutions division — increased 30% year over year to 168 million.
The Hospitality Solutions segment’s revenues totaled $65 million compared with the year-ago quarter’s $54 million. This upside was mainly fueled by the increase in central reservation system transactions, which rose 16% to 27 million.
Sabre reported an adjusted operating loss of $30.3 million, significantly improving from the operating loss of $68.4 million posted in the year-earlier period. Adjusted EBITDA improved from a negative $26.4 million reported a year ago to a positive $1.5 million. This improvement was driven by an increase in revenues.
Balance Sheet and Cash Flow
Sabre exited the December-end quarter with cash, cash equivalents and restricted cash of $815.9 million compared with the previous quarter’s $804 million.
In the fourth quarter, Sabre generated operating and free cash flows of $38 million and $22 million, respectively. In the full-year 2022, the company utilized $276 million in cash for operational activities and generated negative free cash flow of $346 million.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -58.97% due to these changes.
VGM Scores
At this time, Sabre has a great Growth Score of A, 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 B. 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. It's no surprise Sabre has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.