Morningstar

Sabre's Competitive Edge Remains Sharp

Sabre's Competitive Edge Remains Sharp
Securities In This Article
Sabre Corp
(SABR)

Dan Wasiolek: Sabre is one of only two operators with a dominant position providing both IT solutions for travel suppliers and a global distribution system platform, which is the engine allowing flight of airline bookings at traditional travel agents or websites like Expedia.

Sabre's shares have trailed the S&P the past year on concern the company's technology lags that of key peer Amadeus. But we see three main points that defend the company's competitive positioning and support its intact network, efficient scale, and switching cost advantages.

First, the market is not fully appreciating that Sabre already has several industry leading products in its portfolio. Second, we believe that the company's technology road map--which includes a more efficient cloud infrastructure that will support a streamlined shared-platform upon which more advanced applications will be developed--will allow innovation to continue. And third, the new executive management team has vast experience that will allow this technology evolution to occur.

With shares trading at a meaningful discount to our $26 fair value estimate, we view Sabre shares as attractive.

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About the Author

Dan Wasiolek

Senior Equity Analyst
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Dan Wasiolek is a senior equity analyst, AM Consumer, for Morningstar*. He covers gaming, lodging, and online travel. Names covered within the gaming industry are Wynn Resorts, Las Vegas Sands, MGM Resorts, Caesars Entertainment, Penn Entertainment, and DraftKings. In the hotel industry Dan covers Marriott, Hilton, InterContinental, Hyatt, Wyndham, Choice, and Accor. Other travel related names under his coverage are Booking Holdings, Expedia, Airbnb, Tripadvisor, Sabre, and Amadeus.

Before joining Morningstar in 2014, Wasiolek spent 16 years as an analyst and portfolio manager covering US mid- and large-cap strategies for Driehaus Capital Management. During the first half of his time at Driehaus, Dan’s responsibilities as an analyst included analyzing and recommending stocks across all sectors and industries for inclusive in the portfolios. Then in the second half of his tenure at Driehaus, Dan was responsible for stock selection and portfolio management of the US mid- and large-cap strategies, as well as co-managing in-house smaller-cap portfolios.

Wasiolek holds a bachelor’s degree in business administration from Illinois Wesleyan University and a master’s degree in business administration, with a concentration in finance, from the DePaul University Kellstadt School of Business.

* Morningstar Research Services LLC (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

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