On Wednesday the Webjet Limited (ASX: WEB) share price edged lower to finish the day at $11.81.
This latest decline means the online travel agent's shares have now fallen 22% over the last three months.
Why is the Webjet share price sliding lower?
There appear to have been a few catalysts for Webjet's share price slide over the last three months.
The first has been concerns over its partnership with the struggling Thomas Cook. When Webjet released its full year results in August it revised its Thomas Cook Total Transaction Value (TTV) expectations for FY 2020 to be between $150 million to $200 million, down from $300 million to $450 million.
This ultimately led to management downgrading its WebBeds earnings estimates. It said: "We expect between $27 to $33 million additional EBITDA in FY20 (revised from at least $40 million at 1H19)."
Another catalyst has been the emergence of Google as a competitor.
Google Flights and Hotels are growing rapidly and some investors appear concerned that they could steal market share away from Webjet and limit its future growth.
This leads us onto the third catalyst for its share price decline – short sellers. Six months ago Webjet had just 0.5% of its shares held short, whereas this has now increased to 5.3%. This appears to demonstrate that a growing number of short sellers believe Webjet's shares could still go lower from here due to the aforementioned reasons.
Should you invest?
With its shares changing hands at a lowly 15x estimated FY 2020 earnings, I think Webjet looks attractively priced even when accounting for the Thomas Cook and Google concerns.
In light of this, I would still class its shares as a buy. Though, I do feel it would be worth watching out for any signs that Google is negatively impacting its business.
For now, though, it remains my preferred pick in the industry ahead of Flight Centre Travel Group Ltd (ASX: FLT) and Helloworld Travel Ltd (ASX: HLO).
