Sabre Corp. (SABR) is a software for services firm that powers the back end of many travel related companies; the stock has risen 24% so far this year, notes Gordon Pape, editor of Internet Wealth Builder.
The firm's services include airlines, airports, car rental companies, cruise lines, hotels, search engines, and online travel agencies. These are essential services, which has made it indispensable to its clients. It’s a huge addressable market, with the industry generating over $8 trillion annually when things are normal.
Located in Texas, the company has a number of business platforms and two main business groups. The hospitality group provides technology for over 40,000 hotels and resorts in 160 countries. The platform allows these clients to optimize revenue and improve the guest experience.
All this is invisible to the public but essential to making sure the travel experience runs smoothly. So, when you phone or go online to book a hotel room you are likely using the Sabre central reservation system.
Beyond the reservation platform, the company provides software that manages inventory, guest profiles, staffing, and payment systems.
The second area is centered around the airlines and travel agencies. Sabre provides the technology for mobile devices and all other platforms people use in their daily lives.
This provides clients with data rich solutions, which are essential to remain relevant in a competitive marketplace like travel. If you use companies like Bookings.com and Expedia, they’re both built on the Sabre platform.
Prior to the pandemic, the company’s stock was trading north of $27 but it got crushed when travel suddenly ground to a stop, trading as low as $8 in March 2020.
Now, with an increasingly large percentage of the population fully vaccinated, travel is making a huge comeback. Airports were jammed over the Memorial Day weekend and will be so again over the July 4 holiday. Cruises should resume shortly.
Sabre’s stock has been slowly recovering, but not as quickly as I expected. It should continue to rise however, and I expect it to be back in the $20 range by year-end. It’s still a buy. The stock was originally recommended by contributing editor Glenn Rogers.