Company Reports

We see Sabre holding a solid network position in the artificial intelligence landscape. That said, the company's leveraged balance sheet could hinder its ability to adequately invest in its business, leading to our no-moat rating.

Sabre's second-quarter revenue increased 4%, with distribution up 6% and airline IT down 4%. Adjusted EBITDA margins expanded 272 basis points to 21.2%, helped by the timing of its technology investments.

We see Sabre holding a solid network position in the artificial intelligence landscape. That said, the company's leveraged balance sheet could hinder its ability to adequately invest in its business, leading to our no-moat rating.

Sabre's first-quarter revenue increased 8%, surpassing the firm's mid-single-digit growth target and accelerating from last quarter's 1% rise. Adjusted EBITDA margin benefited from the improved sales growth, expanding to 20.9% from 18.6% a year ago. Shares rose about 11% in May 7 trading.

The global distribution system industry is investing in AI capabilities to stay relevant in the travel ecosystem at a time of elevated financing costs. This has strained leveraged players like Sabre, which recently refinanced debt maturing in 2027 and 2029 out to 2030 at an elevated rate of 10.75%.

Despite Sabre's current solid network position in the artificial intelligence landscape, we have downgraded our moat rating to none from narrow for the company due to its leveraged balance sheet, which could hinder its ability to adequately invest in its business.

Sabre's stock price rose 30% in March 2 trading after reports that narrow-moat Constellation Software had bought 9.7% of Sabre's stock (equity and derivatives), and expressed interest in buying more, up to 25%.

Sabre's fourth-quarter sales increased 3.0% as air booking volumes rose 3.7%, an improvement from the 2.4% growth last quarter, despite the US government shutdown. Normalized adjusted EBITDA margins increased to 17.8% from 16.7%. The company guided to 5% air volume growth in 2026.

Despite near-term economic growth concerns caused by tariff uncertainty and the US government shutdown, which is negatively affecting its corporate and government business, we expect Sabre to reduce net debt/adjusted EBITDA to 6 times by the end of 2025 from 19 times in 2024, using proceeds from the prudent sale of its hospitality solutions business. We maintain our stance that Sabre will hold its position in global distribution systems, or GDS, over the next 10 years. This view is driven by a gradual recovery in corporate travel and Sabre's leading network of airline content and travel agency customers, as well as its solid position in technology solutions for these carriers and agents. Sabre's 30%-plus GDS air transaction share is the second largest of the three companies (behind narrow-moat Amadeus and ahead of privately held Travelport) that together control about 100% of market volume.

Sabre's third-quarter revenue rose 3% as air booking volume grew 2.4%, an improvement from the 0.9% decrease last quarter. Operating margin was 13.1%, up from 8.4% a year ago on labor efficiency.

We have ended Sabre's under review status after assessing second-quarter results and updating our forecast.

Despite near-term economic growth concerns caused by tariff uncertainty, which is negatively affecting its corporate and government business, we expect Sabre to reduce net debt/adjusted EBITDA to 6 times by the end of 2025 from 8.5 times in 2024, using proceeds from the prudent sale of its hospitality solutions business. We maintain our stance that Sabre will hold its position in global distribution systems, or GDS, over the next 10 years. This view is driven by a gradual recovery in corporate travel and Sabre's leading network of airline content and travel agency customers, as well as its solid position in technology solutions for these carriers and agents. Sabre's 30%-plus GDS air transaction share is the second largest of the three companies (behind narrow-moat Amadeus and ahead of privately held Travelport) that together control about 100% of market volume.

Sabre's sales fell 1% in the second quarter, missing guidance for low-single-digit growth, as tariff uncertainty hindered industry demand. The miss was driven by a 1% drop in air volume versus our 2% growth estimate. The firm decreased its 2025 sales growth outlook to low from high single digits.

Despite near-term economic growth concerns emanating from tariff uncertainty, we expect Sabre to reduce its debt to adjusted EBITDA toward 6 times by the end of 2025 from about 10 times in 2024, using proceeds from the prudent sale of its hospitality solutions business (scheduled to close in late 2025). We maintain our stance that Sabre will hold its position in global distribution systems, or GDS, over the next 10 years. This view is driven by a gradual recovery in corporate travel and Sabre's leading network of airline content and travel agency customers as well as its solid position in technology solutions for these carriers and agents. Sabre's 30%-plus GDS air transaction share is the second largest of the three companies (behind narrow-moat Amadeus and ahead of privately held Travelport) that together control about 100% of market volume.

First-quarter revenue fell 1%, driven by a 3% drop in air volumes, as tariff uncertainty hindered industry demand. That said, the firm still expects high-single-digit revenue growth in 2025 due to recent wins. EBITDA margins increased to 19.3% from 18.2%, aided by Sabre's transition to the cloud.

First-quarter revenue fell 1%, driven by a 3% drop in air volumes, as tariff uncertainty hindered industry demand. That said, the firm still expects high-single-digit revenue growth in 2025 due to recent wins. EBITDA margins increased to 19.3% from 18.2%, aided by Sabre's transition to the cloud.

Sabre shares rocketed 15% on April 28 after the company announced the sale of its hospitality IT business to TPG for $960 million in net proceeds, expected to primarily be used to reduce debt. The deal is expected to close by the end of the third quarter.

Despite near-term reduced consumer saving rates and long-term corporate travel demand uncertainty, we expect Sabre to maintain its position in global distribution systems over the next 10 years. This view is driven by a gradual recovery in corporate travel and Sabre's leading network of airline content and travel agency customers as well as its solid position in technology solutions for these carriers and agents. Sabre's 30%-plus GDS air transaction share is the second largest of the three companies (behind narrow-moat Amadeus and ahead of privately held Travelport) that together control about 100% of market volume. Sabre is also a leader in providing technology solutions to travel suppliers.

Narrow-moat Sabre’s shares rose more than 10% during Feb. 20 intraday trading, after it announced customer wins that will drive its 2025 sales growth up by a high-single digit percentage, ahead of our 6% preprint estimate. We plan to increase our $4.87 fair value estimate to account for the stronger outlook this year, leaving shares undervalued.

Despite near-term reduced consumer saving rates and long-term corporate travel demand uncertainty, we expect Sabre to maintain its position in global distribution systems over the next 10 years. This view is driven by a gradual recovery in corporate travel and Sabre's leading network of airline content and travel agency customers as well as its solid position in technology solutions for these carriers and agents. Sabre's 30%-plus GDS air transaction share is the second largest of the three companies (behind narrow-moat Amadeus and ahead of privately held Travelport) that together control about 100% of market volume. Sabre is also a leader in providing technology solutions to travel suppliers.