The Flight Centre Travel Group Ltd (ASX: FLT) share price is almost at an all-time high of $57.79.
After such a strong performance over the past year, is it a buy?
It would be hard to believe the Flight Centre share price has delivered a return of 103% over the last year. Share prices do somewhat match earnings performance and the Flight Centre report last month was exceptional.
Global total transaction value (TTV) increased by 8.7% to $10.16 billion, profit before tax increased by 28% to $139 million and earnings per share increased by 37%.
Flight Centre said that it managed to successfully control the cost growth to boost the net margin.
The business is growing well in all areas and almost 50% of TTV was generated overseas.
The past is good to look at but it's the future that decides where the share price will go over time.
Flight Centre thinks it will be able to grow its revenue through organic growth, acquisitions, new products, new geographies, new sectors and new business models. That's a lot of different ways to grow the business
The corporate travel sector is growing at a decent rate every year. There is an increasing number of Australians who are reaching retirement and who want to start using their retirement funds to travel the world. Earnings have good tailwinds for the future.
The only question I have about Flight Centre is its large bricks and mortar network and online disruption, but Flight Centre is also developing its online capabilities, so it should be able to refocus its earnings there.
Foolish takeaway
Management upgraded the full-year profit before tax guidance from the original $350 million to $380 million to the upgraded guidance of $360 million to $385 million. I think there's a chance Flight Centre could be a decent buy today, but I've never personally been a huge fan of the business model, so I wouldn't invest at today's price.
