2024-02-01 01:07:37 ET
Summary
- Despegar achieved operational profitability with increased revenues and flat costs, resulting in a 40% stock appreciation.
- The stock requires significant optimism to generate an adequate yield.
- Despegar's growth rate of 13% for five years may not be sustainable, and the company is still exposed to economic cycles.
Despegar ( DESP ) is one of Latin America's leading OTAs, with a GBV market share of about 10%.
I wrote about the company in October 2022 and did not consider the stock an opportunity. The main reason was a lack of profitability during pre and post-pandemic periods. Without profitability, a company is much more risky....
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Despegar's Stock Price Is Overly Optimistic