DESP - Despegar.com Is Growing Profitably But The Price Is Excessive

2024-05-29 03:48:53 ET

Summary

• Despegar.com is the leading Latin American OTA.
• The company posted strong top-line results in 1Q24, with 13% YoY growth and improved bottom-line results due to expense rationalization.
• Despite its profitable growth, Despegar's high P/E ratio of 35x is considered excessive, and the stock is still rated as a Hold.

Despegar.com ( DESP ) is the leading Latin American OTA.

I have been covering Despegar since October 2021 , with a consistent Hold rating. Since then, the stock has returned about 20% versus 16% for the S&P 500 ( SPY ). However, the stock has clearly lagged both the Latin American broad indexes in Argentina, Brazil, and Mexico (its largest markets) and competitors like Booking (BKNG)....

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