It certainly has been a disappointing few months for the Webjet Limited (ASX: WEB) share price.
Since the online travel agent's shares peaked at a record-high of $17.19 in May, they have lost 35% of their value and are now trading at a lowly $11.18.
Why has the Webjet share price been hammered?
There have been a couple of catalysts for Webjet's share price weakness over the last few months.
One has been concerns over its partnership with Thomas Cook. The UK-based travel company's underperformance had weighed on Webjet's guidance for FY 2020 before it ultimately went bust earlier this week.
Its collapse is now expected to reduce Webjet's WebBeds EBITDA growth this year by up to $7 million from between $27 million and $33 million to $20 million and $26 million.
Whilst this is disappointing, it is worth noting that this means segment EBITDA of $87.3 million to $93.3 million, which implies annual growth of 29.7% to 38.6% on FY 2019's $67.3 million. If the rest of the business also delivers growth, then Webjet's group EBITDA growth in FY 2020 should be very strong.
And certainly strong enough to justify a re-rating from the lowly 14x estimated forward earnings multiple that its shares trade on today.
What else has weighed on its shares?
Also weighing on its shares this year has been the emergence of Google as a competitor with its Google Flights and Hotels products. Some investors appear concerned that the tech giant could steal market share away from Webjet and limit its future growth.
But one person that doesn't appear concerned by this is Webjet's CEO, John Guscic.
According to two change of director's interest notices, Mr Guscic has been buying shares on-market this month. First a non-executive director picked up $97,440 worth of shares on September 13 and then the CEO snapped up almost $400,000 worth of shares on September 24 and 25 following the Thomas Cook collapse.
I suspect these directors know the business better than anyone, so I see these ~$500,000 share purchases as a big positive and a sign that now could be the time to pick up shares if you haven't done so already.
