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Highlights:
Despegar.com (DESP) shares surged by 7.4% to $14.18 in the last trading session, continuing a positive trend with a year-to-date gain of 50%.
The company is benefitting from robust revenues driven by a strong Take Rate and substantial gross bookings, further enhanced by a recent partnership with Nubank.
Upcoming quarterly earnings are projected at $0.20 per share, reflecting a year-over-year increase of 66.7%, with revenues anticipated to reach $190.59 million.
Despegar.com (NYSE:DESP) concluded the last trading session with a notable 7.4% increase in share price, reaching $14.18, on an impressive trading volume that surpassed the average number of shares exchanged. This rise follows a solid 5.2% gain over the previous four weeks, reflecting the stock's overall positive trajectory, with a year-to-date increase of 50%.
The growth of Despegar.com is largely attributed to strong revenues, driven by a high Take Rate, which is calculated by dividing revenue by the combined total of Gross Bookings and Total Payment Volume. The company's gross bookings have also shown substantial strength. A recent partnership with Nubank has expanded Despegar's customer base, enhancing its market presence and revenue potential.
As the company prepares for its upcoming earnings report, it is projected to announce quarterly earnings of $0.20 per share, signifying a remarkable year-over-year change of 66.7%. Revenues are anticipated to reach $190.59 million, indicating a 7% increase compared to the same quarter last year.
While both earnings and revenue growth are critical indicators of a company's potential strength, historical data shows a correlation between trends in earnings estimate revisions and near-term stock price movements. For Despegar.com, the consensus EPS estimate has remained stable over the past 30 days. Typically, a stock's price does not continue to rise in the absence of changes in earnings estimate revisions.
Currently, Despegar.com carries a Zacks Rank of #3 (Hold), indicating a neutral outlook. In the same transportation services industry, Universal Logistics (NYSE:ULH) also holds a Zacks Rank of #3 and saw a modest increase of 0.3% in its share price during the last trading session.
