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On Monday, Mizuho (NYSE:MFG) Securities increased its price target on Sabre Corporation (NASDAQ:SABR) shares to $4.00, up from the previous $3.50, while keeping a Neutral stance on the company. The stock has shown remarkable momentum, surging 65.57% over the past year and currently trading at $4.52, near its 52-week high of $4.63. According to InvestingPro analysis, the stock’s RSI suggests it’s in overbought territory. The adjustment follows Sabre’s fourth quarter performance, which matched expectations, and projections for robust growth in the coming fiscal year.
Sabre’s market share gains are anticipated to drive double-digit expansion in both air bookings and Central Reservation System (CRS) transactions for the fiscal year 2025. This growth is attributed to Sabre’s enhanced cloud-native and open-source solutions. Despite the forecast for accelerated top-line growth and impressive gross profit margins of 59.01%, Sabre’s management has decided to maintain its EBITDA guidance for FY25 at over $700 million, significantly above the current EBITDA of $381.74 million. The decision is based on higher expenses linked to the additional revenues, which are believed to be temporary.
Mizuho analysts have opted to keep their EBITDA estimates for Sabre largely unchanged. However, they suggest that the company’s guidance might turn out to be conservative. The new price target of $4 reflects a valuation pegged at 7.5 times Sabre’s estimated EBITDA for FY26.
The update from Mizuho arrives as Sabre continues to innovate and capture more of the market within the travel technology sector. The company’s performance and strategic advancements are closely monitored by investors seeking to understand the potential impacts on its financial health and stock value. With the maintained EBITDA guidance and the raised price target, Sabre’s financial journey through FY25 will be of particular interest to stakeholders and market watchers alike.
In other recent news, Sabre Corporation reported fourth-quarter earnings that exceeded analyst expectations, with an adjusted earnings per share of -$0.08, beating the consensus estimate of -$0.10. However, the company’s revenue for the quarter was slightly below expectations, coming in at $714.72 million compared to the projected $719.14 million. Sabre’s Travel Solutions segment experienced a 4% year-over-year growth, while its Hospitality Solutions saw an 8% increase, driven by growth in Central Reservation System transactions. Despite these positive trends, Sabre’s first-quarter revenue and EBITDA guidance fell short of analysts’ expectations due to the timing of new commercial agreements.
Looking forward, Sabre provided an optimistic outlook for 2025, anticipating high single-digit year-over-year revenue growth with adjusted EBITDA expected to exceed $700 million and free cash flow projected to top $200 million. Analysts at Mizuho Securities raised their price target for Sabre to $4.00 from $3.50, maintaining a Neutral rating, citing the potential for strong market position and growth driven by upgraded technology offerings. Cantor Fitzgerald also maintained a Neutral rating with a $4.00 price target, highlighting the company’s progress in expanding its market share within the Global Distribution System industry. Sabre’s management has indicated that fiscal year 2025 growth will be driven by new distribution partners and the completion of a technology transformation expected to yield cost savings.
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