Why are Hitit's Multiples Higher? As analysts have noted, Hitit's multiples (P/E >30x, EV/EBITDA >20x) are significantly higher than its competitors. The main reasons for this are:
Growth Difference: While Amadeus and Sabre are experiencing single-digit growth in saturated markets, Hitit is exhibiting dollar-based growth in the 30% range. Markets pay a higher premium for growth stocks than for value stocks.
Base Effect: Because Hitit is small in scale, each new contract won (e.g., AJet, THY subsidiary agreements) has a proportionally much larger impact on financials.
Clean Balance Sheet: While Sabre is burdened by debt and dealing with restructuring processes, Hitit's net cash position adds a "quality premium" to the stock.
Market Share Gains and Pipeline
In 2024, Hitit added 9 new partner airlines, bringing the total number to 72. In particular, the full commissioning of the AJet (formerly AnadoluJet) project and the technology platform usage agreement signed with Turkish Airlines have proven (Proof of Concept) that the company can work not only with small players but also with large-scale airlines. These references are a critical element of confidence for future Tier-2 and Tier-1 tenders.
Revenue Projections
Hitit's revenue growth is based on three main drivers:
Passenger Number Growth: Organic growth of existing partners (IATA expectation 4-5%).
New Partner Acquisition: An average of 6-8 new airlines joining each year.
Up-Selling / Cross-Selling: Selling new modules (OOMS, Accounting, etc.) to existing customers.
My Estimates (Base Scenario):
2025 Expectation: USD 98 Million (25% growth). The commercialization of the company's ADS product and expansion in the Asian market will support this growth.
2026-2029 CAGR: 20%. Due to the nature of the PSS market, growth will reach saturation at some point, but since Hitit's market share is still very low (around 2-3%), the growth area is wide.
Profitability and Margin Analysis
Hitit reported an EBITDA margin of 41% as of 9M24. This is a "Best-in-Class" ratio in the software industry.
Margin Sustainability: A significant portion of the company's costs (personnel expenses) are in Turkish Lira (TL). Revenues are in USD.
Risk: If the depreciation of the TL in 2025 falls below personnel salary increases (inflation) (Real Valuation), Hitit's cost base will swell in USD terms. This could put pressure on margins.
Model Assumption: In the base scenario, I predict that the EBITDA margin will stabilize in the 43-45% range thanks to productivity increases and economies of scale. In the bearish scenario, this rate is projected at 35%.
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