Zacks Report Date: November 06, 2023

Sabre Corporation (SABR) Long Term: 6-12 Months Zacks Recommendation: Neutral
(Since: 10/16/23)
$4.13 (Stock Price as of 11/03/2023)
Prior Recommendation: Outperform
Price Target (6-12 Months): $4.50
Short Term: 1-3 Months Zacks Rank: (1-5) 3-Hold

Zacks Style Scores: VGM:B

Value: C Growth: A Momentum: B

Summary Price, Consensus & Surprise(1)

Sabre’s prospects are gaining traction as demand for
traveling remains strong globally. Corporate demand is
expected to remain strong in the near term. Its initiatives to
expand business with agencies and new airline partners are
key drivers. Sabre remains on track to realize $100 million of
reduced costs in the second half of 2023 and an estimated
annualized $200 million of reduced costs in 2024. These are
expected to drive profitability in the near term. Moreover, the
company remains on track to achieve 2025 financial targets of
adjusted EBITDA of greater than $900 million and free cash
flow of greater than $500 million. Nonetheless, seasonality in
the travel industry and stiff competition are perpetual
headwinds. Moreover, high debt level and pricing pressure
are major concerns. Shares have underperformed the
industry year to date.

Data Overview Sales and EPS Growth Rates (Y/Y %)(2)

52 Week High-Low $7.92 - $2.99
Sales EPS
20 Day Average Volume
4,647,747
(sh)
Market Cap $1.4 B

YTD Price Change -33.2%

Beta 1.85

Dividend / Div Yld $0.00 / 0.0%

Internet - Software and
Industry
Services
Zacks Industry Rank Top 18% (45 out of 250)

Sales Estimates (millions of $)(2)

Last EPS Surprise 9.1%
Q1 Q2 Q3 Q4 Annual*
Last Sales Surprise 4.7%
2024 824 E 792 E 823 E 808 E 3,247 E
EPS F1 Est- 4 week change 0.0%
2023 743 A 738 A 741 E 707 E 2,928 E
Expected Report Date 02/21/2024 2022 585 A 658 A 663 A 631 A 2,537 A
Earnings ESP 0.0%
EPS Estimates(2)
Q1 Q2 Q3 Q4 Annual*
P/E TTM NA
2024 -0.09 E 0.05 E 0.13 E 0.11 E 0.19 E
P/E F1 NA
2023 -0.18 A -0.17 A -0.06 E -0.07 E -0.48 E
PEG F1 NA
2022 -0.29 A -0.25 A -0.25 A -0.36 A -1.14 A
P/S TTM 0.5 *Quarterly figures may not add up to annual.

1) The data in the charts and tables, except the estimates, is as of 11/03/2023.
2) The report's text, the analyst-provided estimates, and the price target are as of 11/06/2023.

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 Overview
Founded in December 2006, SouthLake, TX-based Sabre Corporation
provides software and technology solutions that powers the global travel
industry. The company connects leading travel suppliers, including tour
operators, airlines, rail carriers, car rentalbrands, hotels, and cruise lines,
with travel buyers in a comprehensive travel marketplace.

Sabre offers an extensive suite of software and technology solutions that

helps travel suppliers improve their reservation systems, managing daily
operations, and enhance marketing. The company’s solutions helps its
customers operate more efficiently, drive revenues and offer
personalized traveler experiences.

The company reports revenues in three segments: Travel Network,

Airline Solutions and Hospitality Solutions.

Travel Network consists of the company’s global distribution system

(GDS) to cater to travel suppliers. It works like a marketplace connecting
travel suppliers with the buyers. The suppliers include hotels, airlines,
car rental companies, rail carriers and cruise liners.

Airline Solutions has three functional offerings: SabreSonic Customer

Sales & Service, the reservation system; Sabre AirVision Marketing &
Planning, providing commercial planning solutions and Sabre AirCentre
Enterprise Operations for propping up operational efficiency.
As of 11/06/2023
Hospitality Solutions includes SynXis central reservation system (CRS)
and SynXis Property Manager Solution (PMS).

The company earns its revenues from transactions in the GDS, upfront or recurring fees from the Airline and Hospitality Solutions that are
available in the form of software-as-a-service (SaaS) and a hosted delivery model.

Also, the professional services related to these solutions aid in revenue generation. Additionally, the software licensing for the Airline and
Hospitality Solutions as well as maintenance of the software products are contributors to revenues. Lastly, the company also earns revenues
from display and action advertisements on the GDS, which is included in the Travel Network segment.

In 2022, the company’s revenues increased 50.2% year over year to $2.54 billion.

In the travel network space, Sabre faces fierce competition from major companies like Amedeus IT Group, Make My Trip Limited, Expedia Group,
TripAdvisor, Ctrip.com International and the likes.

As of 11/03/2023

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 Reasons To Buy:
Sabre’s third-quarter 2023 results reflect that the company is moving toward stabilization A strong solutions portfolio
after severe impacts of the COVID-19 pandemic-led global economic crisis. The company along with a diversified
recorded revenues of $748 million for the quarter, which is significantly higher than the customer base and
revenues of $663.4 million posted in the year-ago quarter. This year-over-year surge in the expected SaaS industry
top line reflects a significant improvement in global air, hotel and other travel bookings. growth bode well for the
Additionally, the company's Travel Solutions division benefited from favorable rates as company.
international and corporate bookings continued to improve.

We are encouraged by the improving trend in Sabre’s gross bookings and reservation-
system transactions. The company’s gross bookings rose 12% to 89.5 million in third-quarter 2023 and 12% year over year to 90.4 million in
second-quarter 2023. In first-quarter 2023, the company’s gross booking jumped 48.7% year-over-year to 96.6 million. During the first,
second and third quarters of 2023, the company registered year-over-year growth of 20%, 8% and 7%, respectively, in the central reservation
system transactions.

Sabre has a wide range of solutions for the travel marketplace as well as travel and hospitality suppliers. The company’s solution Sabre Red
Workspace has already been adopted by prominent travel agencies. Additionally, its Airline Solutions offerings such as Sabresonic
Reservation system, AirVision and AirCenter as well as Hospitality Solutions including SynXis (CRS) software and services have witnessed
robust growth.

Sabre has strong customer base comprising online and offline travel agencies, corporate travel departments as well as airlines of all sizes,
corporate aviation fleets, airports and hoteliers with more than 38K hotel properties across the globe. The diverse customer base apart from
adding to the top line lowers customer concentration risk. Notably, none of the customers generated more than 10% of the total revenues in
the last four fiscals, which makes the top line less susceptible to loss of any single customer. Moreover, the diversified customer base
improves visibility into company’s revenue growth trajectory.

Sabre generates part of its revenues from the Software-as-a-Service (SaaS) based offerings of its Airline and Hospitality Solutions. Notably,
the company’s collaborations with Amazon Web Services and Microsoft for the usage of the cloud infrastructure further strengthen cloud-
based deployment of the SaaS solutions. Given the growth of the SaaS industry coupled with the fact that the company caters to different
sectors of the travel industry, we believe Sabre will manage to gain a major share of the projected growth.

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 Reasons To Sell:
Sabre suffers from the seasonality of the travel industry. Revenues from travel bookings Seasonal impact of the
decline massively during the fourth quarter of the year, especially in December. Holiday travel industry, highly
related bookings are done in the earlier part of the year. Also, since business travels decline competitive travel
during December, overall revenues go down. distribution market and
significant debt burden
Sabre is part of the highly competitive travel distribution market, which requires the company remain major concerns.
to make regular enhancements, additions and upgrades to its product portfolio that involve
substantial investments. Additionally, the company has to comply with the new regulations of
the industry as well like the new distribution capability (“NDC”) standard introduced by The
International Air Transport Association (IATA). These tend to increase costs

Sabre’s Travel Network segment is prone to pricing pressure from travel suppliers. The stiff competition in the industry increases pricing
pressure, given the availability of several alternative solution providers. Additionally, the use of direct distribution model by travel suppliers
remains a concern for Sabre as well.

Sabre has a significant debt burden. Hence, interest payments hurt profitability. A high debt position increases the risk profile of the business.
As of Sep 30, 2023, the company had a net debt balance of $4.82 billion. Moreover, debt-to-capital ratio stands at 1.22, higher than the
industry’s figure of 0.31. The weak balance sheet seems to be a concern in our view.

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 Last Earnings Report
Sabre Q3 Loss Narrower Than Expected, Revenues Rise Y/Y FY Quarter Ending 12/31/2022

Sabre reported a narrower-than-expected loss for the third quarter of 2023. The company’s top Earnings Reporting Date Nov 02, 2023
line surpassed the Zacks Consensus Estimate and improved year over year.
Sales Surprise 4.69%
The company reported an adjusted loss of 6 cents per share, narrower than the Zacks EPS Surprise 9.09%
Consensus Estimate of a loss of 7 cents. Also, the figure was narrower than the year-ago Quarterly EPS -0.17
quarter’s loss of 25 cents per share. Annual EPS (TTM) -0.96

Sabre reported revenues of $740 million for the third quarter, surpassing the consensus mark of
$731.5 million. The top line came in 11.6% higher than $663.4 million in the year-ago period.

This year-over-year surge in the top line reflects a significant improvement in global air, hotel and other travel bookings. Additionally, the
company's Travel Solutions division benefited from favorable rates as international and corporate bookings continued to improve.

Quarter in Detail

The Travel Solutions segment’s revenues increased 11% year over year to $672 million, primarily driven by an increase in global air and other
travel bookings. Our model estimates for Travel Solutions revenues were pegged at $647.2 million, which indicated 7.2% year-over-year growth.
The segment’s revenues also benefited from favorable rate impacts as international and corporate bookings improved.

Distribution’s (a sub-division of Travel Solutions) revenues improved to $524.8 million from $430.8 million in the third quarter of 2022. This was
chiefly driven by the gradual recovery of bookings and an increase in average booking fees due to a shift in the booking mix.

IT Solutions’ (a sub-division of Travel Solutions) revenues were $147 million, down 14.9% from the year-ago quarter’s $172.8 million. The
decrease in performance was due to reduced revenues attributed to de-migrations, owing to the repercussions of changes in Russian legislation,
along with a 1% decline in the number of passengers boarded.

The Hospitality Solutions segment’s revenues totaled $78.6 million compared with the year-ago quarter’s $67.5 million. This upside was mainly
fueled by a 7% increase in central reservation system transactions and a 9% increase in per transaction rate. Our model estimates for Hospitality
Solutions revenues were pegged at $81.2 million, which indicated 20.3% year-over-year growth.

Sabre reported an adjusted operating income of $83.6 million, significantly improving from the operating income of $0.7 million posted in the year-
earlier period. Adjusted EBITDA improved from $34.3 million reported a year ago to $110.2 million. This improvement was driven by an increase
in revenues.

Balance Sheet and Cash Flow

Sabre exited the September-end quarter with cash, cash equivalents and restricted cash of $622.6 million compared with the previous quarter’s
$803.7 million.In the third quarter, Sabre generated an operating cash flow of $59.4 million. The company’s free cash flow was $39 million during
the reported quarter.

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 Recent News
On Oct 31, Sabre announced that its New Distribution Capability solutions and its Global Distribution System has been selected by Virgin
Australia for producing and distributing Virgin Australia’s NDC content.

On Oct 30, Sabre announced the strengthening of its partnership with Air India. The new partnership will enable India's domestic travel agencies
to access Air India's domestic content through Sabre GDS.

On Oct 23, Sabre announced that it has entered a multi-year distribution agreement with Jet2.com that will enable Sabre-affiliated agencies
access to Jet2.com content, which can be accessed through the Sabre GDS Platform.

On Oct 19, Sabre announced its renewal EDIFACT agreement with Air-France KLM. The two parties also closed a strategic multi-year NDC
distribution agreement.

On Oct 16, Sabre announced the successful implementation of its comprehensive suite of Radixx products by Aero Mongolia, which includes
Sabre's Radixx Res Passenger Service System (PSS).

On Oct 5, Sabre announced the signing of an enhanced distribution agreement with LATAM, allowing the distribution of NDC content through the
Sabre Global Distribution System (GDS). This setup will provide Sabre-connected agencies with long-term access to LATAM's traditional
offerings while also expanding LATAM's reach and boosting sales.

On Oct 4, Sabre announced that its partner Habitas Group, a Global Hospitality Management group has successfully implemented Sabre's
SynXis Booking Engine, SynXis Voice Agent, and GDS Distribution platforms.

On Oct 2, Sabre announced that Cinnamon Hotels & Resorts have selected Sabre’s SynXis platform as its new Central Reservations System
(CRS) to drive growth and scale.

On Sep 27, Sabre launched its newest AI-powered retailing solution designed to optimize the management of airlines' premium cabin inventory.

On Aug 23, Sabre announced a multi-year distribution agreement with Egypt’s Nile Air focused on promoting Nile Air's content to travel agents
on a massive scale through Sabre’s marketplace.

On Aug 21, Sabre announced a multi-year distribution agreement that expands its long-standing relationship with Scandinavian Airlines (SAS).

On Aug 14, Sabre announced the availability of Lodging AI, marking the introduction of its Sabre Travel AI capabilities in the lodging sector and
enhancing the power of Content Services for Lodging.

Valuation
Shares of Sabre have decreased 33.2% in the year-to-date and 11.4% over the trailing 12-month period. Stocks in the Zacks sub-industry have
increased 26.1% and the Zacks Computer & Technology sector jumped 36.4% in the YTD. Over the past year, the Zacks sub-industry increased
49.1% while the sector gained 39.2%.
The S&P 500 Index has increased 14.5% in the year so far and 15.3% in the past year.
The stock is currently trading at 0.43X forward 12-month sales, compared with 3.11X for the Zacks sub-industry, 3.74X for the Zacks sector and
3.53X for the S&P 500 Index.
Over the past five years, the stock has traded as high as 2.25X and as low as 0.24X with a 5-year median of 1.24X. Our Neutral recommendation
indicates the stock will perform in-line with the market. Our $4.50 price target reflects 0.45X forward 12-month sales.
The table below shows the summary valuation data for SABR

Zacks Equity Research www.zacks.com Page 6 of 9

 Industry Analysis(1)Zacks Industry Rank: Top 18% (45 out of 250) Top Peers(1)
Company (Ticker) Rec Rank
NetEase, Inc. (NTES) Outperform

Criteo S.A. (CRTO) Neutral

Alphabet Inc. (GOOGL) Neutral

HUYA Inc. Sponsored ADR (HUYA) Neutral

Hello Group Inc. Sponsored ADR Neutral

(MOMO)
Paycom Software, Inc. (PAYC) Neutral

Ringcentral, Inc. (RNG) Neutral

VeriSign, Inc. (VRSN) Neutral

Industry Comparison(1)Industry: Internet - Software And Services Industry Peers

SABR X Industry S&P 500 CRTO GOOGL MOMO

Zacks Recommendation (Long Term) Neutral - - Neutral Neutral Neutral

Zacks Rank (Short Term) - -

VGM Score - -
Market Cap 1.37 B 1.35 B 30.33 B 1.33 B 1,615.82 B 1.36 B
# of Analysts 4 4 16 5 17 1
Dividend Yield 0.00% 0.00% 1.7% 0.00% 0.00% 0.00%
Value Score - -
Cash/Price 0.45 0.18 0.05 0.22 0.07 0.83
EV/EBITDA 47.77 7.47 13.01 5.43 17.30 0.71
PEG Ratio -0.17 1.29 2.06 NA 1.45 NA
Price/Book (P/B) NA 2.03 3.05 1.29 5.91 0.88
Price/Cash Flow (P/CF) NA 25.12 12.30 5.29 21.78 4.89
P/E (F1) -7.98 23.58 17.21 8.18 22.55 4.42
Price/Sales (P/S) 0.48 2.00 2.42 0.69 5.44 0.77
Earnings Yield -11.38% 3.47% 5.74% 12.21% 4.44% 22.63%
Debt/Equity -3.76 0.00 0.62 0.00 0.05 0.00
Cash Flow ($/share) -0.64 0.03 8.85 4.52 5.93 1.47
Growth Score - -
Hist. EPS Growth (3-5 yrs) NA% 21.43% 10.10% 0.13% 22.88% -11.13%
Proj. EPS Growth (F1/F0) 57.89% 36.27% 6.10% 5.80% 25.66% 21.80%
Curr. Cash Flow Growth -55.78% 3.58% 5.79% 2.43% -14.21% -155.68%
Hist. Cash Flow Growth (3-5 yrs) NA% 16.62% 9.31% 4.82% 20.86% -6.90%
Current Ratio 1.32 1.59 1.26 1.12 2.04 2.60
Debt/Capital NA% 0.01% 39.52% 0.01% 4.80% 0.00%
Net Margin -20.73% -9.31% 11.76% 0.39% 22.46% 14.53%
Return on Equity NA% -2.58% 17.54% 5.09% 25.24% 16.70%
Sales/Assets 0.58 0.80 0.55 0.88 0.78 0.78
Proj. Sales Growth (F1/F0) 15.40% 7.08% 4.52% 9.50% 8.80% -10.50%
Momentum Score - -
Daily Price Chg -0.24% 1.43% 0.94% -2.96% 1.26% 2.58%
1 Week Price Chg -9.33% -4.48% 5.85% -3.86% -9.90% 4.30%
4 Week Price Chg 6.44% -3.99% 1.16% -17.09% -6.16% 0.14%
12 Week Price Chg -26.77% -1.91% -2.37% -19.98% -0.36% -28.76%
52 Week Price Chg -10.41% 14.86% 15.59% -1.16% 49.11% 32.59%
20 Day Average Volume 4,647,747 299,172 2,326,078 256,194 32,245,164 807,335
(F1) EPS Est 1 week change 0.00% 0.00% 0.00% 0.79% 0.00% 0.00%
(F1) EPS Est 4 week change 0.00% 0.00% 0.00% 0.79% 0.83% 0.00%
(F1) EPS Est 12 week change 15.28% -0.26% 0.23% -0.26% 1.51% 0.70%
(Q1) EPS Est Mthly Chg 0.00% 0.00% -0.46% 1.50% -1.84% 0.00%

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 Zacks Stock Rating System
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This report contains independent commentary to be used for informational purposes only. The analysts contributing to this report do
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