Stock in Wall Street Spotlight: Despegar.com, Corp. (NYSE: DESP)

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01 May 2020, Despegar.com, Corp. (NYSE: DESP) stock observed trading -56.74%% off 52-week high price. On the other end, the stock has been noted 50.45% away from low price over the last 52-weeks. The stock disclosed a move of -19.25% away from 50 day moving average and -40.79% away from 200 day moving average. Moving closer, we can see that shares have been trading -1.30% off 20-day moving average.

Despegar.com, Corp. (NYSE: DESP) recently reported unaudited results for the three-months and fiscal year ended December 31, 2019. Financial results are expressed in U.S. dollars and are presented in accordance with U.S. generally accepted accounting principles.

Fourth Quarter 2019 Key Financial and Operating Highlights

(For definitions, see page 12)

Gross bookings on an FX neutral basis increased 26% year-over-year (YoY) and as stated 6% year-over-year (YoY) to $1.3B

Revenues were up 34% on an FX neutral basis and 10% as stated to $145.6M

Transactions and Room Nights up 7% and +3% YoY, respectively.

Share of mobile transactions up 466 basis points (bps) YoY, accounting for 41% of total transactions

Net Promoter Score (NPS) down 50 bps YoY

Packages, Hotels and Other Travel Products accounted for 63% of total revenue, up 130 bps when contrast to 4Q18

Not Including Extraordinary Charges, Adjusted EBITDA was $12.5M. Stated Adjusted EBITDA was $8.3M contrast to $13.9M in 4Q18.

Operating cash flow of $15.3M in 4Q19, contrast to use of cash of $5.4M in 4Q18

Successful launch of Loyalty Program in Brazil

Restructuring expenses mainly related to efficiency gains in support areas and fulfillment centers as a cost saving effort without hindering growth

Key Recent Business Events

On January 27, 2020 Despegar agreed to acquire 100% of Best Day Travel Group, a leading online travel agency in Mexico, for a total consideration of about $136M

On February 14, 2020 the Company releaseda co-branded credit card together with Banco Santander in Brazil

On January 21, 2020 Despegar entered into a 10-year commercial joint venture contract with Tarjeta Naranja S.A., the leading branded proprietary credit card issuer in Argentina, and subsidiary of Grupo Financiero Galicia S.A.

During 4Q19, Brazil, Despegar´s largest market, accounting for 39% of total orders, stated a YoY increase of 2% in transactions, despite a important capacity contraction in international air travel in the quarter. Gross bookings rose 7% YoY on an FX neutral basis, and reduced 1% as stated. Stated ASPs reduced 2% YoY (+5% FX neutral) as package transactions grew 8% shifting however from international to domestic. Additionally, Brazilian real depreciation of 7% YoY influenced ASPs leading to a slight contraction in as stated Gross Bookings.

In Argentina, on December 23, 2019, the Government imposed a new duty, which taxes at 30% any purchases of goods from abroad and services to be provided outside the country, including accommodations. This new tax also impacts the purchase of international passenger transport services. The estimated advancement of travel purchases before the implementation of this new tax led to a 13% increase in transactions. On a stated basis, gross bookings and ASPs in Argentina increased YoY by 13% and 1%, respectively. On an FX neutral basis, gross bookings increased 81% YoY and ASPs rose 61%.

Across the Rest of Latin America, Despegar stated a raise of 8% in transactions and 9% in gross bookings, while ASPs increased 1% year-over-year to $432 reflecting growth in ASP in international travel in Mexico. Good overall performance in Mexico over offset a important industry contraction in Chile Because of the social unrest that the country experienced towards the end of 2019. On an FX neutral basis, gross bookings rose 12%, while ASPs increased 4%.

Despegar.com, Corp. moved with change of -3.19% to $6.68 with the total traded volume of 364,845 shares in recent session versus to an average volume of 496.29K.  DESP’s shares are at -54.90% for the quarter and driving a -53.74% return over the course of the past year. There are 69.42M shares outstanding and 463.73M shares are floated in market.

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