Here's why the Webjet (ASX:WEB) share price is up 50% this last year

It's been a good 12 months for the online travel agent's shareholders

| More on:
Young girl smiles with her hand on top of a suitcase while standing on the tarmac with an aeroplane in the background.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Webjet Limited (ASX: WEB) share price has been outperforming over the last 12 months.

The online travel agent was hit hard by the effects of the COVID-19 pandemic during early 2020 and didn't truly begin recovering until November last year.

This time last year, shares in Webjet were going for $3.91. Right now, the Webjet share price is $5.94, having gained another 1.37% today.

So, what spurred Webjet's shares to take off? Let's take a look.

What's been driving the Webjet share price?

The last 12 months have been good to the Webjet share price, boosting it by 51%.

For comparison, the S&P/ASX 200 Index (ASX: XJO) has gained 25% over the same period.

Webjet's best day of the last year was on 10 November 2020.  It's a day many investors will remember for one extraordinary reason: It was the day that Pfizer Inc (NYSE: PFE) announced it had created a vaccine for COVID-19.

The Webjet share price soared 13.5% as a pathway out of the pandemic was finally realised.

Webjet's recovery was bolstered again when it released its earnings for the first half of financial year 2021.

While travel restrictions plagued the company over the 6 months ended 31 December 2020, the market seemingly saw past its underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) loss of $40.1 million and a massive fall in revenue.  

While the Webjet share price initially fell on the back of its results, it ended the day 5% higher than it had started.

Most recently, Webjet's stock surged following the release of a trading update late last month.

Within the update, Webjet announced it expects to be cash-flow positive for the first half of financial year 2022. Of course, Webjet recently changed its financial year to run from 1 April to 31 March. Therefore, it expects to announce its first-half earnings in November.

Additionally, it announced its WebBeds business finally returned to profitability in July.

WebBeds operates as a business-to-business provider of accommodation. Webjet stated it managed to get back into the green as travel restrictions eased in Europe and North America.  

The Webjet share price gained 3.4% on the day of the update. It has since gained another 4.9%.

Motley Fool contributor Brooke Cooper 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 owns shares of and 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.

More on Travel Shares

Woman on a tablet waiting in for her flight in an airport and looking through a window.
Travel Shares

Virgin Australia vs Qantas shares: Which is the best buy?

Competition in Australia's aviation market is heating up.

Read more »

A female cabin crew member on a place looks like she has a headache.
Travel Shares

Why this expert is calling time on Virgin Australia shares

A leading expert is calling time on Virgin Australia shares. But why?

Read more »

Couple at an airport waiting for their flight.
Travel Shares

Macquarie increases price target for Qantas shares

Qantas shares hit a new all-time high today.

Read more »

Happy woman trying to close suitcase.
Travel Shares

Guess which ASX travel stock Macquarie just named as its top pick with 32% upside?

While Macquarie sees value across the sector, it named a clear favourite. 

Read more »

A man in a dark blue suit walks through an airport past floor-to-ceiling windows with a Qantas plane flying in the distance
Travel Shares

Up 16% this year, does Macquarie rate Corporate Travel Management shares a buy, hold or sell?

Does the travel stock have further to fly?

Read more »

A group of young people lean over the rails overlooking Sydney's Circular Quay and check out the sights of the city around them.
Travel Shares

Can these two battered ASX travel shares bounce back?

Ahead of important tourism data this week, these two travel companies could be buy low candidates. 

Read more »

Man sitting in a plane looking through a window and working on a laptop.
Travel Shares

Did Flight Centre, Air New Zealand, or Qantas shares fly highest in FY25?

How did these ASX travel shares perform last financial year?

Read more »

Man waiting for his flight and looking at his phone.
Travel Shares

The Virgin Australia share price just slipped back below IPO levels. Should I buy shares today?

A leading expert offers his forecast on the struggling Virgin Australia share price.

Read more »