What Happened?
Shares of travel technology company Sabre (NASDAQ: SABR) fell 5.6% in the afternoon session after the stock's negative momentum continued as its financial outlook worsened, with a lowered fiscal year 2025 earnings (EBITDA) estimate.
Sabre, a technology provider for the global travel and tourism industry, saw its forecast cut due to rising expenses. The increase in selling, general, and administrative costs was aimed at accelerating product development. This spending suggested the company faced ongoing challenges in maintaining its profitability, which appeared to concern investors.
The shares closed the day at $1.61, down 5% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Sabre? Access our full analysis report here.
What Is The Market Telling Us
Sabre’s shares are extremely volatile and have had 35 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 6 days ago when the stock dropped 3.1% on the news that the broader U.S. stock market declined amid investor caution and a pullback in technology stocks.
The main story? Investors are cashing in on a good run and feeling a bit cautious. After a fantastic run, many of those high-flying AI and technology stocks saw investors take profits: selling shares to lock in their gains. This is often called a "market rotation." Money is moving out of the red-hot tech sector (which some worry has become too expensive) and into other parts of the market that investors may currently deem more stable or reasonably-priced. There's a secondary reason for the cautious mood: The long government shutdown came to an end. Though it's typically interpreted as good news, it also means a flood of delayed economic reports will be released. For weeks, investors were "flying blind" without key updates on the economy's health, like inflation data and the jobs report. In typical "sell the news" fashion, investors may also be taking profits and selling in anticipation that the new data would potentially give the Federal Reserve reasons to slow or even pause future rate cuts.
Sabre is down 55% since the beginning of the year, and at $1.61 per share, it is trading 64.5% below its 52-week high of $4.52 from February 2025. Investors who bought $1,000 worth of Sabre’s shares 5 years ago would now be looking at an investment worth $156.89.
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