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Sabre (SABR) Hits 52-Week High on Travel Network Growth

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Shares of Sabre Corporation (SABR - Free Report) hit a new 52-week high of $26.10 on Jun 11, eventually closing a tad lower at $25.99.

Notably, the company has been performing well on the back of its Travel Network, Airline Solutions and Hospitality Solutions segments, which have been witnessing growth aided by a supportive macro global travel environment.

The company surpassed the Zacks Consensus Estimate in three of the trailing four quarters, delivering an average positive earnings surprise of 9.87%. In the last reported quarter, Sabre's earnings were 44 cents per share, which beat the Zacks Consensus Estimate by 3 cents.

Driving Factors in Detail

Increase in bookings growth and booking fee contributed to Travel Network segment revenues, which increased 8.7% to $721 million in first-quarter 2018. Notably global bookings saw an increase of 5.7%, compared with an increase of 3.7% in the prior quarter. Global bookings growth was driven by a 19.7% increase from the APAC region.

Growth in AirVision and AirCenter, the company’s airline software solutions, primarily drove Airline Solutions revenues, which increased 6.7% on a year-over-year basis to $207 million in the last reported quarter.

SynXis software and central reservations system transactions led to a 5.8% increase in Hospitality Solutions revenues to $0.68 million.

On the back of impressive revenue growth of the segments and increasing operational efficiency, the company’s bottom line grew 4.8% to 44 cents per share.

Shares of Sabre have gained 26.8% year to date, significantly outperforming the industry’s 2.4% rally.

New Partnerships to Cut Costs and Improve Efficiency

Sabre recently announced that it has entered into a long-term agreement with Amazon (AMZN - Free Report) and Microsoft (MSFT - Free Report) , as part of its strategy to make cloud the primary platform for their services.

These partnerships are expected to help Sabre deliver enhanced services by customizing solutions.

However, the company expects its costs to rise in the near term as it is increasingly investing in technology platforms, including the adoption of cloud and open architecture systems. Nevertheless, these collaborations are anticipated to be worthy and accretive to the company’s top line, which, in turn, will boost investors’ confidence.

Estimate Revisions

Over the last 30 days, the Zacks Consensus Estimate for 2018 increased by a penny to $1.47, which indicates year-over-year growth of 5%. The Zacks Consensus Estimate for revenues is currently pegged at $3.79 billion, indicating 5.4% increase from the year-ago quarter.

Moreover, the Zacks Consensus Estimate for 2019 increased 13 cents to $1.60 over the same time frame. The consensus estimate for revenues is currently pegged at $4.01 billion, indicating a 5.7% increase on a year-over-year basis.


We believe these positive estimate revisions coupled with a strong earnings history and the company’s strategic initiatives bode well for this Zacks Rank #1 (Strong Buy) stock.

NVIDIA (NVDA - Free Report) is another top-ranked stock in the broader computer & technology sector, sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

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