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Sabre Corp SABR

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Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Despite Our View of Sufficient Liquidity, Sabre Files for Potential Equity Offerings; Shares Cheap

Dan Wasiolek Senior Equity Analyst

Analyst Note

| Dan Wasiolek |

We were surprised by Sabre’s Aug. 20 filing for up to $300 million in potential periodical equity sales (10% potential lift to shares outstanding), sending shares down 8%. In our view, Sabre has enough liquidity in a zero-demand environment for around a year, and probably at least two years at second-quarter 2021 demand levels. This stance is buoyed by Sabre last communicating a monthly cash burn figure of $80 million in a zero-demand environment during its earnings call on Nov. 6, 2020. Since then, management said on its Feb. 16, 2021, earnings call that it expected cash burn to improve throughout 2021. On the Aug. 3, 2021, call management said cash burn improved sequentially and that Sabre had $1.1 billion in cash on the balance sheet, with no debt maturing until 2024 and no significant uses for cash in the near term.

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Company Profile

Business Description

Sabre holds the number-two share of global distribution system air bookings (40.9% as of the end of 2020 versus 38.8% in 2019). The travel solutions segment represented 88% of total 2020 revenue, which was split evenly between distribution and airline IT solutions revenue. The company also has a growing hotel IT solutions division (12% of revenue). Transaction fees, which are tied to volume and not price, account for the bulk of revenue and profits.

Contact
3150 Sabre Drive
Southlake, TX, 76092
T +1 682 605-1000
Sector Technology
Industry Information Technology Services
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Distressed
Employees 7,531

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