DESP - Despegar: Cheap And Worth A Buy But Be Mindful Of FX Risks
2024-07-08 08:37:54 ET
Summary
- Despegar has achieved tremendous bookings growth this year, capitalizing on strong travel demand.
- It estimates the travel TAM in its local Latin America market to be $150 billion, indicating that it is less than 1% penetrated into this market.
- The company trades at a cheap <5x adjusted EBITDA multiple, far less than U.S. rivals like Expedia and Booking.
- Be mindful of FX risks, as the U.S. dollar recently rallied against the Mexican peso and the Brazilian real.
Despite a stilted macroeconomy, one sector appears to be holding up incredibly strong: travel. Airlines continue to report soaring profitability, hotel occupancy rates remain high, and online travel agencies ("OTAs") like Booking ( BKNG ) are also raking in tremendous growth and profits....
Despegar: Cheap And Worth A Buy, But Be Mindful Of FX Risks