The Sabre Corporation (NASDAQ: SABR) stock has continued its general downward trend since Thursday, well into after trading hours which reflects a drop in value of 6.78% over the five-day period. This trend goes starkly against that of NASDAQ which continues its gradual bullish trajectory of 9.27% across the same time frame.
Signing of Lucrative Deals
Despite the direction of these movements, analysts appear optimistic in relation to the prospects of the company’s stock, anticipating growth in EPS by 30.5% by the end of the year, and 74.2% by the following year. The current downward shift is dwarfed by the 30% growth in value observed since the previous month. In addition to the expectations of the analysts, the company’s management further remains highly optimistic, given recent developments. Various sources reported this weekend, the renewal of multiple partnerships over the last few days, including a multi-year agreement with Bahrain’s flagship carrier, Gulf Air, in an initiative to automate and streamline the airline’s passenger services. Sabre’s passenger service system (PSS), SabreSonic is the cornerstone of this agreement, which would be employed in accelerating the airlines’ push towards complete digitization, enabling a more tailored experience being offered to clients.
Furthermore, the inclusion of Sabre’s Dynamic Availability tool is anticipated to remove pricing inefficiencies, leading to even more substantial value creation. This agreement is widely anticipated to drive value for both partners within the arrangement, maximizing Gulf Air’s revenue potential, whilst simultaneously signaling a potential turning point for Sabre, which is still recovering from its 84.78% stock plummet experienced during the outbreak of the Covid-19 pandemic in March of 2020.
Recovery of Global Travel and Tourism Industries
Similarly, an agreement had further been penned yesterday with Biman Bangladesh Airlines, in its expansion strategy through the use of SabreSonic. These agreements in the first quarter of 2022 are in line with statements from the company’s management delivered in its most recent report to investors, where the year was signaled as being that of recovery in travel and tourism, as the globe continues to win its battle against the Covid-19 pandemic.
The company continues to work towards delivering innovative solutions for the industry, which it expects to boost its growth for the three-year period up towards 2025. Specific strategy for this timeframe includes optimizing its financial position through drastic reductions in capital expenditure, as well as hosting costs. Moreover, the agreement with the Nigerian travel company, InterGuide, positions the company to capture growth potential from the developing world.
Conclusion
Despite short-term direction, the growth potential of the company appears significant and is likely to continue to see a steady climb throughout the year, as travel restrictions are eased, and tourism companies look towards meeting soaring demand.
