Has Global Business Travel Group (GBTG) Fallen Too Far After Recent Share Price Slump?

• If you are wondering whether Global Business Travel Group’s current share price reflects its true worth, you are not alone. The stock invites a closer look at what you are actually paying for today.
• The share price closed at US$5.46, with returns of an 11.2% decline over 7 days, a 33.0% decline over 30 days, a 27.4% decline year to date and a 37.8% decline over 1 year, putting recent performance front and center for anyone thinking about risk and potential reward.
• Recent coverage around Global Business Travel Group has focused on its position within the broader travel and corporate services space and how investors are reassessing companies in this area. This backdrop helps frame the recent share price moves as part of a wider reassessment of business travel related names rather than an isolated story.
• Our valuation checks currently give Global Business Travel Group a score of 6 out of 6. Next we will walk through the usual valuation tools investors rely on, before finishing with a different way of looking at value that can add extra context to those numbers.

Find out why Global Business Travel Group's -37.8% return over the last year is lagging behind its peers.

Approach 1: Global Business Travel Group Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model takes estimates of a company’s future cash flows and discounts them back to today to estimate what the entire business might be worth right now.

For Global Business Travel Group, the model used is a 2 Stage Free Cash Flow to Equity approach, based on cash flow projections in US$. The latest twelve month free cash flow is about US$129.7 million, and analysts have provided explicit forecasts up to 2028, with Simply Wall St extrapolating further out to 2035. For example, the projection for 2028 is US$425 million, and the discounted values for the later years in the 10 year projection period range from roughly US$246.2 million in 2026 to US$250.2 million in 2035.

When those projected cash flows are discounted back and summed, the model arrives at an estimated intrinsic value of US$13.42 per share, compared with the recent share price of US$5.46. That implies the stock is about 59.3% undervalued based on this DCF output.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Global Business Travel Group is undervalued by 59.3%. Track this in your watchlist or portfolio, or discover 51 more high quality undervalued stocks.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Global Business Travel Group.

Approach 2: Global Business Travel Group Price vs Sales

For Global Business Travel Group, the preferred valuation yardstick is the P/S ratio. This can be useful when you want to focus on how the market is valuing each dollar of revenue, rather than earnings that can be affected by accounting items.

In general, higher growth expectations or lower perceived risk can support a higher P/S multiple. Slower growth or higher risk often line up with a lower multiple being seen as more reasonable. So the question is what looks like a “normal” or “fair” P/S for this business.

Global Business Travel Group currently trades on a P/S of 1.14x. This sits below the Hospitality industry average of 1.72x, and also below the peer group average of 3.12x. Simply Wall St’s Fair Ratio for the company is 1.92x, which is an internally calculated P/S level that reflects factors such as earnings growth, profit margins, industry, market cap and company specific risks.

Because the Fair Ratio adjusts for these company level traits, it can be a more tailored reference point than broad industry or peer averages. Comparing 1.14x with the Fair Ratio of 1.92x suggests the shares are trading at a discount on this measure.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your Global Business Travel Group Narrative

Earlier we mentioned that there is an even better way to think about valuation. Simply Wall St uses Narratives, which let you connect your view of Global Business Travel Group’s story to a set of revenue, earnings and margin forecasts, and then to a Fair Value that you can compare with the current share price on the Community page where millions of investors share their work.

A Narrative is essentially your own investment story written in numbers. Instead of just accepting a single Fair Value, you can see how different assumptions lead to different outcomes and decide what feels reasonable for you.

For example, one Global Business Travel Group Narrative assumes a Fair Value of US$13.40, while another more cautious Narrative assumes US$8.00. This shows how two investors can look at the same company and reach different conclusions about what it might be worth today.

Because Narratives on Simply Wall St update automatically when new information such as earnings, guidance or news is added, you can quickly see whether your Fair Value has moved closer to or further away from the current price and decide whether that supports buying, holding or selling in your own process.

Do you think there's more to the story for Global Business Travel Group? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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