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SABR – Market expectations are for a positive inflection in Uniform ROA, but management may have concerns about free cash flow, revenues, and their cloud migration

April 12, 2021

  • Sabre Corporation (SABR:USA) currently trades at a premium to UAFRS-based (Uniform) assets, with a 1.2x Uniform P/B. At these levels, the market is pricing in expectations for profitability to inflect positively, but management may have concerns about negative free cash flows, revenue declines, and executing their Google Cloud migration

  • Specifically, management may lack confidence in their ability to generate positive free cash flows, sustain sequential revenue growth, and mitigate IT Solutions revenue declines. Furthermore, they may have concerns about declines in gross air bookings as well as the effectiveness of their “Work From Anywhere” program. Finally, management may lack confidence in their ability to execute their Google Cloud migration, continue investing in IT, and maintain lower headcount costs