Earnings Update: Here's Why Analysts Just Lifted Their Sabre Corporation (NASDAQ:SABR) Price Target To US$4.43

It's been a mediocre week for Sabre Corporation (NASDAQ:SABR) shareholders, with the stock dropping 11% to US$3.14 in the week since its latest second-quarter results. It was a respectable set of results; while revenues of US$767m were in line with analyst predictions, statutory losses were 14% smaller than expected, with Sabre losing US$0.18 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Sabre

Taking into account the latest results, the most recent consensus for Sabre from eight analysts is for revenues of US$3.05b in 2024. If met, it would imply a credible 2.4% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 54% to US$0.54. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$3.04b and losses of US$0.57 per share in 2024. It looks like there's been a modest increase in sentiment in the recent updates, with the analysts becoming a bit more optimistic in their predictions for losses per share, even though the revenue numbers were unchanged.

These new estimates led to the consensus price target rising 6.5% to US$4.43, with lower forecast losses suggesting things could be looking up for Sabre. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Sabre analyst has a price target of US$7.00 per share, while the most pessimistic values it at US$3.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Sabre's past performance and to peers in the same industry. For example, we noticed that Sabre's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 4.8% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 3.5% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 9.7% per year. Although Sabre's revenues are expected to improve, it seems that the analysts are still bearish on the business, forecasting it to grow slower than the broader industry.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that in mind, we wouldn't be too quick to come to a conclusion on Sabre. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Sabre analysts - going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 2 warning signs for Sabre (1 is significant) you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com