The Webjet Limited (ASX: WEB) share price travelled 5% higher last month after registering sluggish performance earlier on.
Nonetheless, investors appear to have mixed feelings when it comes to deciding the value of Webjet shares in the current climate.
At Monday’s market close, the online travel agent’s shares finished at $5.50, down 0.72%.
Is a full-recovery nearby of Webjet’s earnings?
It has been relatively quiet on the news front from Webjet, with its shares in a sideways channel of late.
A catalyst as to why Webjet shares have failed to take off significantly could be because of the war in Ukraine.
The Russian advance on its former soviet ally spooked global markets, sending the price of commodities to astronomical highs. This is particularly in relation to oil, which airlines need to fuel the planes. Most likely this leads to higher ticket prices from airlines, in which Webjet’s profit margins could be squeezed consequently.
In addition, with war raging on Europe’s doorstep, passengers might be less likely to travel to the region. A broader regional war is possible if a simple miscalculation occurs between NATO and Russia.
Webjet operates in 22 countries that include the United Kingdom, Ireland and Europe, the latter which is the biggest market.
In its first half results, the WebBeds division recorded $158 million in total transaction value (TTV) for Europe. Next on the list was the Asia Pacific region with $110 million, and North America at $93 million.
Webjet reported a cash surplus of $3.5 million per month, a significant turnaround compared to FY21. Severe lockdowns led the company to record an average monthly cash burn of $5.5 million in the previous financial year.
Webjet noted that TTV could reach pre-COVID levels by the second-half of FY23. The group portfolio will be a much leaner business, having trimmed 20% of operating costs.
All eyes will be on Webjet’s FY22 results which will be released sometime in late May.
Webjet share price summary
In the last 12 months, Webjet shares have gained around 4% after hitting the brakes in late January 2022. The share price closed at an eight-month low of $4.61 on 27 January.
Nonetheless, the company has gradually been moving on an upwards trend, but is still a long way off from pre-pandemic levels.
Based on valuation grounds, Webjet has a market capitalisation of around $2.09 billion, with approximately 380.51 million shares on issue.
The post How did the Webjet share price travel in March? appeared first on The Motley Fool Australia.
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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