SABR

 A month has gone by since the last earnings report for Sabre (SABR). Shares have lost about 21.1% 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 its most recent earnings report in order to get a better handle on the important catalysts.

Sabre Q1 Loss Narrower Than Expected, Sales Up Y/Y

Sabre reported a narrower-than-expected loss for first-quarter 2022. The company’s adjusted loss per share of 29 cents versus the Zacks Consensus Estimate of a loss of 38 cents. The figure was also narrower than the year-ago quarter’s 72 cents per share.

Sabre reported revenues of $584.9 million for the first quarter, which is significantly higher than the $327 million posted in the year-ago period and surpassed the Zacks Consensus Estimate of $564.2 million. This year-over-year surge in the top line reflects a gradual recovery in global air, hotel and other bookings.

Top-Line Details

The Travel Solutions segment’s revenues increased to $534 million from the year-ago quarter’s $288.9 million, primarily on the gradual recovery in global air and other bookings.

Distribution (sub-division of Travel Solutions) revenues improved to $342.9 million from $151.8 million in first-quarter 2021, chiefly driven by the gradual recovery in bookings and an increase in average booking fee due to a shift in bookings mix.

IT Solution (sub-division of Travel Solutions) revenues were $191.1 million, up from the year-ago quarter’s $137.1 million. This increase was primarily driven by the gradual recovery in the passengers boarded. The number of boarded airline passengers — a key revenue metric for the IT Solutions division — increased to 129.2 million from 75.2 million in the prior-year quarter.

The Hospitality Solutions segment’s revenues totaled $56 million compared with the year-ago quarter’s $42.2 million. This upside was mainly fueled by the gradual recovery in central reservation system transactions and higher Digital Experience revenues. Central reservation system transactions rose to 23 million from 17.6 million in the year-ago quarter.

Sabre reported an adjusted operating loss of $29.2 million, significantly narrower than the operating loss of $166.5 million posted in the year-earlier period.

Adjusted EBITDA improved from a negative $110 million reported a year ago to $5.2 million. This improvement was driven by an increase in revenues and a decline in the provision for anticipated credit loss.

Balance Sheet and Cash Flow

Sabre exited the March-end quarter with cash, cash equivalents and restricted cash of $1.21 billion compared with the previous quarter’s $999.4 million.

During the first quarter, the company utilized $139.1 million of cash for operational activities and generated a negative free cash flow of $156.5 million.

How Have Estimates Been Moving Since Then?

It turns out, estimates review flatlined during the past month.

The consensus estimate has shifted -7.14% due to these changes.

VGM Scores

Currently, Sabre has an average Growth Score of C, 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