Sabre Posts Upbeat Q4 Revenues & FY2022 Outlook; Shares Up 21.9%

Sabre (NASDAQ: SABR) shares jumped 21.9% on February 15 to close at $10.9,7 after the company delivered strong Q4 revenues growth and also provided upbeat FY2022 guidance and bullish long-term FY2025 financial targets.

Based in Texas, U.S., Sabre Corporation is a travel technology company providing technology solutions to the global travel and tourism industry.

Q4 Numbers

Positively, revenues jumped 60% year-over-year to $501 million and surpassed consensus estimates of $497.08 million.

The increase in revenues reflects a surge in global air, hotel and other travel bookings driven by continued recovery from the COVID-19 pandemic. Notably, total bookings grew 119% year-over-year to $57.7 million.

However, the company reported an adjusted loss of $0.47 per share, which fell 6 cents short of the street’s estimated loss of $0.44. Comparatively, the quarterly loss was much better than the reported loss of $0.80 per share in the prior-year period.

FY2022 Financial Outlook & Long Term 2025 Financial Targets

Sabre provided financial guidance for FY2022 at various possible booking recovery scenarios versus pre-pandemic levels for 2019, as well as long-term financial targets for FY2025.

At 50% bookings recovery, Saber forecasts revenue excluding AirCentre to be in the range of $2.2 billion to 2.5 billion, and including AirCentre, the range is between $2.4 billion and $2.7 billion.

At 60% bookings recovery, revenues are forecast to be in the range of $2.5 billion to $2.8 billion excluding AirCentre, and in the range of $2.7 billion to $3 billion including AirCentre.

At 70% bookings recovery, revenues are projected to be in the range of $2.8 billion to $3.1 billion excluding AirCentre, and in the range of $3 billion to $3.3 billion including AirCentre. Meanwhile, the consensus estimate is pegged at $2.55 billion.

For FY2025, the company forecasts adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) greater than $900 million at greater than 80% bookings recovery. Further, it predicts adjusted EBITDA of over $1.1 billion to $1.3 billion at greater than 100% bookings recovery and $120% bookings recovery, respectively.

Bullish CEO Comments

Sharing his optimism on business growth going forward, Sabre CEO, Sean Menke, commented, “In addition to benefiting from the continued recovery in global business, we are excited about our growth opportunities. In the short run, we expect strong revenue growth and improving financial performance as the global travel industry continues its expected recovery.”

Longer-term, he further added, “Over the 2 medium term, the realization of our technology transformation and cloud migration are expected to unlock significant savings and expand revenue opportunities. By 2025, we expect to exceed pre-COVID-19 levels for Adjusted EBITDA, Adjusted EBITDA margin, operating income and Free Cash Flow.”

Wall Street’s Take

The stock has picked up a rating from one analyst in the past three months.

Following the strong Q4 revenues and outlook, Morgan Stanley analyst Josh Baer increased the price target on Sabre Corporation to $14 (27.6% upside potential) from $11 and reiterated a Hold rating.

Positive News Sentiment

News Sentiment for SABR is Positive based on 23 articles over the past seven days. 100% of the articles have Bullish sentiment, compared to a sector average of 65%.

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