Sabre Corp (SABR) Stock Analysis and Metrics

Sector: Technology Industry: Software - Infrastructure CIK: 0001597033

P/B -0.62

P/E 1.09

P/S 0.21

Market Cap 600.76 Mn

ROIC (Qtr) 11.40

Div Yield % 0.00

Rev 1y % (Qtr) 3.45

Total Debt (Qtr) 4.22 Bn

Debt/Equity (Qtr) -4.36

About

Sabre Corporation, also known by its stock symbol SABR, is a technology company that operates within the travel industry. The company aims to be a valued global technology partner in travel by connecting the world's leading travel suppliers with travel buyers in a comprehensive travel marketplace. Sabre's business activities revolve around two primary segments: Travel Solutions and Hospitality Solutions. Travel Solutions provides global travel solutions for both travel suppliers and travel buyers, offering a diverse portfolio of software technology...

Sabre Corporation, also known by its stock symbol SABR, is a technology company that operates within the travel industry. The company aims to be a valued global technology partner in travel by connecting the world's leading travel suppliers with travel buyers in a comprehensive travel marketplace.

Sabre's business activities revolve around two primary segments: Travel Solutions and Hospitality Solutions. Travel Solutions provides global travel solutions for both travel suppliers and travel buyers, offering a diverse portfolio of software technology products and solutions tailored for airlines. On the other hand, Hospitality Solutions offers software and solutions for hoteliers worldwide.

The company generates revenue through various means. Travel Solutions earns revenue through distribution fees, transaction fees, and IT solutions revenue. Distribution fees are received for bookings made through Sabre's global distribution system, while transaction fees are collected for bookings made through its partners. IT solutions revenue comes from upfront solution implementation fees and recurring usage-based fees for utilizing Sabre's software solutions. Hospitality Solutions generates revenue through software licensing fees, professional service fees, and media and retailing fees. Software licensing fees are earned from the use of its software products, professional service fees are obtained from consulting services, and media and retailing fees are acquired from advertising and retailing offerings.

Within the industry, Sabre competes with several key players, and its competitive advantage stems from its ability to recruit, train, and retain employees, including its executive officers and technical staff. However, workforce reductions can have unforeseen consequences, such as increased difficulties in operations, reduced employee morale, and attrition beyond planned reductions.

The company's business is also vulnerable to disruptions in the global travel industry, including changes in travel patterns, economic conditions, and government regulations. Sabre's revenue is heavily reliant on transaction volumes in the global travel industry, particularly air travel transaction volumes, making it susceptible to any decline or disruption in leisure and business travel.

Sabre faces various risks and challenges, including the impact of the COVID-19 pandemic on the travel industry, the need to invest in new technologies and systems to remain competitive, and the risk of intellectual property theft or infringement. Additionally, the company is subject to data protection and privacy regulations, with any failure to comply resulting in significant fines or penalties.

Regarding its customer base, Sabre's Travel Solutions business is exposed to pricing pressure from travel suppliers. Its ability to compete effectively depends on negotiating favorable contracts with travel suppliers and maintaining relationships with travel buyers. Sabre's Hospitality Solutions business faces similar risks, including pricing pressure from hoteliers and the need to invest in new technologies and systems to remain competitive.

Sabre operates under the brand names "Travel Solutions" and "Hospitality Solutions." Its software products and solutions within these segments include various brand names and trade names, such as its global distribution system, software technology products, consulting services, and advertising and retailing offerings. However, specific product or service brand names are not provided in the document.

Stock Price Chart

Analysis

Pros

Healthy cash reserves of 682.75M provide 4.46x coverage of short-term debt 152.99M, demonstrating strong liquidity position and minimal refinancing risk.
Operating cash flow of (165.41M) provides exceptional 342.47x coverage of minority interest expenses (483000), showing strong core operations.
Tangible assets of 1.70B provide exceptional 30.62x coverage of deferred revenue 55.40M, showing strong service capability backing.
Robust tangible asset base of 1.70B provides 12.19x coverage of working capital 139.16M, indicating strong operational backing.
Cash reserves of 682.75M provide solid 3.65x coverage of other non-current liabilities 186.89M, indicating strong liquidity.

Cons

Operating cash flow of (165.41M) provides insufficient coverage of deferred revenue obligations of 55.40M, which is -2.99x, raising concerns about future service delivery capabilities.
The company's operating cash flow of (165.41M) shows concerning coverage of stock compensation expenses of 48.56M, with a -3.41 ratio indicating potential earnings quality issues.
Free cash flow of (231.66M) provides weak coverage of capital expenditures of 66.25M, with a -3.50 ratio suggesting additional external financing needs for growth initiatives.
Tax assets of 7.04M provide limited offset against tax liabilities of 40.56M, which is 0.17x, indicating potential future cash flow pressure from tax obligations.
Cash position of 682.75M provides only 1.42x coverage of interest expenses of 479.84M, indicating potential refinancing risks in a rising rate environment.

Peer Comparison

Companies in the Software - Infrastructure

S.No.	Ticker	Company	Market Cap	P/E	P/S	Total Debt (Qtr)
1	MSFT	Microsoft Corp	3,542.10 Bn	33.76	12.06	60.56 Bn
2	ORCL	Oracle Corp	533.93 Bn	34.61	8.75	124.39 Bn
3	PLTR	Palantir Technologies Inc.	437.56 Bn	399.47	112.31	0.24 Bn
4	PANW	Palo Alto Networks Inc	125.16 Bn	112.03	13.10	0.35 Bn
5	CRWD	CrowdStrike Holdings, Inc.	120.85 Bn	-384.67	26.47	0.82 Bn
6	SNPS	Synopsys Inc	71.69 Bn	35.89	11.14	15.14 Bn
7	NET	Cloudflare, Inc.	67.84 Bn	-658.43	33.70	3.50 Bn
8	FTNT	Fortinet, Inc.	63.33 Bn	33.80	9.66	1.00 Bn

Industry Comparisons

Current Valuation

Metric	Value	Industry
EV to Assets	1.19	2.56
EV to Cash from Ops.	-31.40	38.32
EV to Debt	1.23	-11.37
EV to EBIT	5.23	-12.79
EV to EBITDA	11.48	7.72
EV to Free Cash Flow [EV/FCF]	-22.42	24.22
EV to Market Cap	8.64	0.58
EV to Revenue	1.79	-35.00
Price to Book Value [P/B]	-0.62	3.74
Price to Earnings [P/E]	1.09	-18.61

Dividend Metrics

Metric	Value	Industry
Dividend Coverage Ratio	0.00	-0.30
Dividend Payout Ratio %	0.00	2.69
Dividend per Basic Share	0.00	0.10
FCF Dividend Payout Ratio %	0.00	1.67
Interest Coverage	2.07	-13.15

Growth Metrics

Metric	Value	Industry
Capex Growth (1y) %	20.81	-404.11
Cash and Equivalents Growth (1y) %	-1.02	226.02
Dividend Growth (1y) %	0.00	-0.27
EBIAT Growth (1y) %	350.56	31.15
EBITDA Growth (1y) %	25.78	49.02
EBIT Growth (1y) %	371.06	25.85
EBT Growth (1y) %	292.40	17.82
EPS Growth (1y) %	282.89	70.69
FCF Growth (1y) %	-3,455.92	295.45
Gross Profit Growth (1y) %	10.14	49.96

Liquidity Ratios

Metric	Value	Industry
Asset Utilization Ratio	0.66	0.68
Cash Payout Ratio	0.00	0.02
Cash Ratio	0.67	1.21
Current Ratio	1.14	2.57
Debt to Equity Ratio	-4.36	-0.93
Interest Cover Ratio	2.07	-13.15
Times Interest Earned	2.07	-13.15

Profitability

Metric	Value	Industry
EBITDA Margin %	38.10	-544.82
EBIT Margin %	34.29	-197.78
EBT Margin %	17.70	-602.74
Gross Margin %	31.50	52.06
Net Profit Margin %	19.10	-605.52

Sabre Corp (NASDAQ: SABR)