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Amadeus IT Group SA AMS

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Stock XMAD Rating as of
€67.10 +0.98 (1.48%)
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As of Delayed Price Closed

Company Report

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Amadeus' Air Booking Recovery Continues Amid an Ominous Consumer Landscape

Dan Wasiolek

Despite uncertainty around the pace of corporate travel recovery, direct connections between major North American carriers and online travel agencies, and consumer spending, we see Amadeus' business demand rebounding in 2024 from the pandemic-caused April 2020 nadir during the next few years. Long term, we expect its leadership position in global distribution systems to endure, driven by its leading network of airline content and travel agency customers as well as its healthy position in software solutions for these carriers and agents. Amadeus is the largest of the three GDS operators (narrow-moat Sabre is number two, followed by privately held Travelport) that control nearly 100% of market volume.

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Price vs Fair Value

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AMS is trading at a 162% premium.
Price
€67.10
Fair Value
€79.00
Uncertainty
High
1-Star Price
€428.21
5-Star Price
€68.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Amadeus' GDS network hosts content from most airlines and is used by many travel agents, resulting in significant industry share. Replicating this network would involve meaningful time and costs.

Bears

Corporate travel could be negatively affected by some prolonged use of video conferencing as a replacement for internal meetings and other business trips.

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News

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Trading Information

Previous Close Price
€66.12
Day Range
€66.32–67.38
52-Week Range
€52.56–68.70
Bid/Ask
— / —
Market Cap
€29.23 Bil
Volume/Avg
601,535 / 520,881

Key Statistics

Price/Earnings (Normalized)
12.86
Price/Sales
5.28
Dividend Yield (Trailing)
1.85%
Dividend Yield (Forward)
1.85%
Total Yield
3.94%

Company Profile

Founded in 1987 by four major European airline carriers (Air France, Lufthansa, Iberia, and SAS), Amadeus became the world’s second global distribution system operator, or GDS, after Sabre’s development in the 1960s and 1970s. Today, among the top three GDS operators that control nearly 100% of industry revenue, Amadeus' 40%-plus market share ranks as the largest. Overall, Amadeus’ GDS segment represented 56% of total prepandemic sales in 2019. Additionally, the company has an expanding IT solutions division (44% of 2019 revenue) that addresses the airline, airport, rail, hotel, and travel agency markets. Transaction fees, which are tied to volume and not price, account for the bulk of consolidated sales and profits.
Sector
Technology
Industry
Information Technology Services
Stock Style Box
Large Growth
Total Number of Employees
19,987
Website
https://www.amadeus.com

Competitors

Valuation

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Metric
AMS
EXPE
BKNG
Price/Earnings (Normalized)
 12.8613.7429.04
Price/Book Value
 6.4421.94—
Price/Sales
 5.281.616.65
Price/Cash Flow
 13.608.0723.01
Price/Earnings
AMS
EXPE
BKNG

Financial Strength

Metric
AMS
EXPE
BKNG
Quick Ratio
 0.620.591.11
Current Ratio
 0.770.761.17
Interest Coverage
 14.393.966.67
Quick Ratio
AMS
EXPE
BKNG

Profitability

Metric
AMS
EXPE
BKNG
Return on Assets (Normalized)
 11.12%6.30%22.12%
Return on Equity (Normalized)
 27.08%112.53%—
Return on Invested Capital (Normalized)
 15.65%16.73%43.73%
Return on Assets
AMS
EXPE
BKNG

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