One of the biggest stories of last week was how Sabre Corporation (NASDAQ:SABR) shares plunged 34% in the week since its latest full-year results, closing yesterday at US$14.50. It looks like the results were a bit of a negative overall. While revenues of US$4.0b were in line with analyst predictions, statutory earnings were less than expected, missing estimates by 3.7% to hit US$0.57 per share. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.
Following last week's earnings report, Sabre's nine analysts are forecasting 2020 revenues to be US$3.93b, approximately in line with the last 12 months. Earnings are expected to tip over into lossmaking territory, with analysts forecasting statutory losses of -US$0.028 per share in 2020. In the lead-up to this report, analysts had been modelling revenues of US$4.16b and earnings per share (EPS) of US$0.85 in 2020. Analysts have made an abrupt about-face on Sabre, administering a a small dip in to revenue forecasts and slashing earnings forecasts from profit to loss.
The consensus price target fell 21% to US$20.71, with analysts clearly concerned about the company following the weaker revenue and earnings outlook. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Sabre at US$29.50 per share, while the most bearish prices it at US$17.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Further, we can compare these estimates to past performance, and see how Sabre forecasts compare to the wider market's forecast performance. These estimates imply that sales are expected to slow, with a forecast revenue decline of 1.2% a significant reduction from annual growth of 8.3% over the last five years. Compare this with our data, which suggests that other companies in the same market are, in aggregate, expected to see their revenue grow 11% next year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - analysts also expect Sabre to grow slower than the wider market.
The Bottom Line
The most important thing to take away is that analysts are expecting Sabre to become unprofitable next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues will perform worse than the wider market. Analysts also downgraded their price target, suggesting that the latest news has led analysts to become more pessimistic about the intrinsic value of the business.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Sabre analysts - going out to 2022, and you can see them free on our platform here.
You can also view our analysis of Sabre's balance sheet, and whether we think Sabre is carrying too much debt, for free on our platform here.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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