I expect a blood bath in their share price due to still losing money and no improvement in earnings from last quarter. The savings from the lay off won’t be realized until end of year. I have a feeling next layoff Sabre’s days are numbered. Possible Bankruptcy in 2024-2025 as there is no way they can pay off $5 Billion in debt when they have negative cash flow - operational expenses are greater than earnings.
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It has not aged well so far.
You'll see if it aged well in a few weeks, not the day after.
All wall street top analysts here. If you are so confident, short the stick.
Lol. This aged well. Not.
Stock price will go back to the low $3s in the next few weeks as profit takers sell and reality of still making $0.17 loss per share for yet another cash flow negative quarter kicks in. Burning through another $110million of cash reserve of the $727million remaining. At this rate only 6 more quarters until that is all gone. The upcoming 2024 modernization cost reductions had better be real not just a pipe dream.
I am glad they only had to lay off 1100 people and make their life miserable so the stock price went up 30%.
the earnings call was very positive for SABR and the market responded by lifting the stock price up 30% to $4.81
If revenues do not grow in the next few quarters they will file for bankruptcy probably next year as they will have to restructure their $5 billion debt. Then they may go private - again. That is the Sabre cycle.
Counterpoint:
Net interest expense is currently about $100m per quarter. Let's say a lender would ideally want 2x EBITDA coverage on that.
EBITDA was at c.$30m last quarter. It has been improving by around $25m a quarter since bottoming in Q2 2020. Continuing this trend, you get to 1x coverage by Q4 this year, and 2x by Q4 2024.
The first debt maturity of any significance on the radar is $850m for the 7.375% senior secured notes due in September 2025. The company currently has c.$800m of cash of hand (declining, but not for much longer).
After this, nothing due until 2027.
We are only now seeing a significant uptick in APAC travel and business travel, so expecting the profit recovery to continue. I am assuming everything otherwise stays "as is". Obviously there are many moving parts.
Sabre is trying to cut running costs with the tech upgrade ($150m targeted yearly savings vs 2019) and the layoffs ($200m a year from 2024) . It has been rumoured to try to sell the hotels division (proceeds of such a sale could help lower the debt). Lenders could possibly be willing to refi in 2025 even if EBITDA is lower than 2x at the time (assuming the trend remains positive). Interest rates could well drop back down by 2025 (curves suggest as much), proportionally reducing the required EBITDA.
I am not assuming any upside from the above and things still look OK. I am also not assuming downside.
Personally I think Sabre will either purposely go bankrupt this year, or it won't at all. I would find it quite weird, in the context of steadily recovering revenues and profits, for Ekert to first do layoffs as his first move as CEO, then declare bankruptcy a few months later before any benefits have a chance to be seen. Usually bankruptcy is declared when a business is in steady, inevitable decline, not growth, and layoffs would occur in bankruptcy, not before. But who knows...
The consensus expectation for earnings per share for 2Q23 is a loss of $0.22.
Last quarter was the same expectation but Sabre beat that by 5 cents for a loss of $0.18 per share.
Sabre will file Bankruptcy.
Wall Street expects a year-over-year increase in earnings on higher revenues when Sabre (SABR) reports results for the quarter ended June 2023. Sabre is expected to post quarterly loss of $0.23 per share in its upcoming report, which represents a year-over-year change of +8%. Revenues are expected to be $704.5 million, up 7.1% from the year-ago quarter.
I think Sabre is still reasonably ok financially: "S&P Global Ratings affirmed the "B-" Foreign Currency LT credit rating of Sabre Holdings on May 31, 2023. The outlook is stable."
B: "Speculative Grade : More vulnerable to adverse business, financial and economic conditions but currently has the capacity to meet financial commitments"