The Webjet Limited (ASX: WEB) share price has been range bound since November last year when Pfizer released its initial COVID-19 vaccine trial results.
Webjet shares have struggled to hold above $6 but managed to find plenty of buying support around the mid-$4 level.
Encouragingly, Webjet shares have pushed 5% higher in September and are testing the upper bound of the range.
In an article featured on Livewire, Nathan Hughes from Perpetual Limited (ASX: PPT) and Mike Murray from Australian Ethical Investment Limited (ASX: AEF) were asked about their thoughts on the Webjet share price.
What do experts think about the Webjet share price?
Murray was cautiously optimistic about Webjet, slating it as a "reopening play" but concerned about how much of that was already priced into today's share price.
"I just wonder how much of the heavy lifting has already been done. There are probably twice as many shares on issue now than there were a couple of years ago."
"The enterprise value would have recovered back to really pre-COVID levels. And so I don't really want to pay the current price for it, but it's an interesting business," he said.
Perhaps a lower Webjet share price might have earned a more positive view from Murray, but he ultimately said it was a "hold".
Hughes said that "there's no doubt they'll [Webjet] enjoy a really strong recovery" but was far more critical about the company's valuation and balance sheet.
"But I think those salient points Mike made around the enterprise value and just how much of the recovery is baked into today's share price. There are a lot more shares on issue and there's also some convertible debt on the balance sheet, as well, so that gives me some pause," he said.
Hughes also pointed at Webjet's business model as a potential red flag in the long-term.
".. a trend we've seen in a lot of industries, is a lot of businesses are going more direct to consumer and controlling their own distribution. And so, from that perspective, I just wonder about the long-term sustainability of Webjet's B2B model," he added.
