The Webjet Limited (ASX: WEB) share price has continued its slide again today and fell to a 2017 low of $10.20.
Whilst this may only mean its shares are down 3.5% year-to-date, they are down almost 23% from their 52-week high.
Is this a buying opportunity?
I think it is. Based on its earnings per share generated from continuing operations of 34 cents in FY 2017, Webjet's shares are trading at 30x earnings.
Whilst this is a premium over the market average, I believe the online travel agent's strong long-term growth prospects justify this.
After all, earnings from continuing operations grew 29.8% in FY 2017 thanks to strong bookings growth from all of its segments.
Furthermore, FY 2018 appears to have started just as strongly. As of its full-year results release, Webjet had seen B2C bookings up 25% on the prior corresponding period and B2B bookings up a massive 78% on the prior corresponding period.
I expect this trend to continue in the future as more and more consumers opt to book their flights and accommodation online.
What are the risks?
While Webjet has had a strong start to the year, it won't provide its FY 2018 guidance until its annual general meeting in November.
Should its guidance be weaker-than-expected then there is a risk that its shares could tumble lower.
Furthermore, this morning Morgan Stanley retained its underweight rating for Flight Centre Travel Group Ltd (ASX: FLT) and cut its price target to $38.00 amid concerns that home owners may cut back on travelling as mortgage rates rise.
I feel it is reasonably fair to say that Webjet would be equally impacted if this were to occur.
Should you invest?
But all in all, at the current share price I believe the risk/reward on offer for buy and hold investors is compelling and makes Webjet one of the better growth shares on the market today.
As a result, I would class it as a buy.
