This report is an updated version of the report published on 28 May 2025 at 11:34 AM AEST.

WEB Travel Group Limited (ASX: WEB)

WEB Travel Group Limited (ASX: WEB), formerly Webjet Limited, is an Australia-based global business to business (B2B) travel distribution company. The Company connects travel sellers with travel buyers across all major global markets.

Recommendation Rationale – SELL at AUD 5.49

• Surpassed Resistance: WEB’s share price surpassed its R2 level recommended on 28 April 2025. Therefore, WEB can face correction at the current levels.
• Technical Standpoint: The momentum oscillator, 14-day RSI (~75.23) indicates that share price is trading in the overbought zone; therefore, retracement can be expected at the current levels.
• Overvalued Multiples: On a forward 12-month basis – key trading multiples (EV/Sales, EV/EBITDA, P/E, Price/Book and Price/Cash Flow) are higher than the median of Consumer Cyclicals industry.
• Financial Performance: Group Underlying EBITDA declined to AUD 120.6 million, representing a 13% decrease YoY, while Underlying Net Profit After Tax fell by 22% YoY to AUD 79.2 million in FY25. Due to the lower-than-expected revenue and EBITDA performance, no short-term incentives (STIs) will be awarded for FY25
• Emerging Risks: WEB's revenue is closely tied to consumer and business travel demand, which is vulnerable to economic fluctuations. Economic downturns or recessions can lead to reduced discretionary spending on travel. Additionally, WEB depends on airlines, hotels, and other service providers, and disruptions, supplier failures, or unfavourable contract changes can impact its offerings and pricing.
  

WEB Daily Chart

WEB Daily Technical Chart, Data Source: REFINITIV

Valuation Methodology: P/E Approach (FY March'26E) (Illustrative)

Considering the expected TTV of AUD 10 billion by FY30, focus on stabilizing its customer, geographic, and supplier mix, expected EBITDA margin of ~50% by FY26, diversified revenue source, etc., the stock might trade at a slight premium to its peers.

For valuation, few peers like Corporate Travel Management Ltd (ASX: CTD), Flight Centre Travel Group Ltd (ASX: FLT), Collins Foods Ltd (ASX: CKF), and others have been considered.
Considering that the stock has surpassed its R2 level, rally in share price movement, current trading level, and risks associated, the share price can face consolidation at the current levels. Hence, a ‘Sell’ recommendation is given on the stock at the current price of AUD 5.49 (as of 28 May 2025, at 10:20 AM AEST). 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical issues prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 28 May 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.    

Note 4: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice. 

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: In general, it is a level to protect further losses in case of any unfavourable movement in the stock prices.