The Webjet Limited (ASX: WEB) share price has performed brilliantly over the past six months, rising by 30%.
The ASX travel share sector has seen robust performance overall as demand returns for destination travel.
But will Webjet be able to keep impressing investors?
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Strong recovery
A couple of months ago, the business announced its FY23 first-half result.
It said that total transaction value (TTV) had jumped 223% year over year to $2.14 billion. This helped revenue rise by 217% to $175.7 million and underlying earnings before interest, tax, deprecation, and amortisation (EBITDA) jump 557% to $72.5 million.
Webjet said that this result was underpinned by its efforts as soon as the pandemic hit to ensure that each business was "optimally positioned to recapture demand once travel returned. Recovery is substantially accelerating and WebBeds is leading the charge", according to the company.
WebBeds saw all regions achieve "significant" organic growth, particularly in Europe. In North America, the business is now three times bigger than before COVID-19 began.
Webjet also boasted that it was one of the most profitable online travel agents in the world before the pandemic, implying this could be the case with the recovery as well.
Can the Webjet share price keep performing?
Webjet suggested that WebBeds is picking up market share in all regions, with the capability to scale rapidly. It said that FY23 third-quarter bookings and TTV were tracking at more than 30% ahead of pre-pandemic levels. FY23 EBITDA is also "expected to be higher than it was pre-pandemic".
Webjet's online travel agency business has "increased its market share by 57% since the pandemic began". It thinks that new technology has "enormous potential" to increase its share of the international flights market.
With demand for travel reportedly strong, the restoration of airline capacity will drive profitability for the Webjet OTA [online travel agent] business.
Using Commsec estimates, the Webjet share price is valued at 22 times FY24's estimated earnings, showing that the business could generate a solid profit in the next financial year.
According to the consensus of analyst opinions that Commsec covers, it's rated as a buy by nine, rated as a hold by five, and only two currently rate it as a sell.
I believe that Webjet has a promising future, but I'd only start off with a small position at the current price level and consider buying more on any dips. It could start paying a dividend in FY24, which could be useful for boosting returns.
