Why is the Webjet (ASX:WEB) share price underperforming Corporate Travel lately?

The market is boosting Corporate Travel's stock into the green while Webjet's suffers. We take a closer look

| More on:
Teenager holds model plane in the air against the background of a blue sky.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Both domestic and international travel is back on the cards for millions of Australians. So why is the Webjet Limited (ASX: WEB) share price struggling compared to that of its business-focused peer, Corporate Travel Management Ltd (ASX: CTD)?

Despite plenty of positive news regarding the Australian travel sector, the Webjet share price has fallen 4.3% over the past month. Shares in the online travel agent are currently trading for $6.33 apiece.

That's a notably worse performance than that of the Corporate Travel share price. It has gained 0.5% in the same time frame to reach $24.60.

Though, both are underperforming against the broader market. The S&P/ASX 200 Index (ASX: XJO) has gained 3% over the last month.

Australia's return to travel

On Monday, international borders reopened in Victoria and New South Wales after both states agreed to scrap quarantine for fully vaccinated arrivals. Additionally, residents eager to head overseas once more have been given the green light to do so.

And in more good news for wandering Aussies, travel between Victoria, New South Wales, and the ACT resumed today.

Though, the news hasn't been enough to boost the Webjet share price back into the green.

What's weighing on the Webjet share price?

There's no news on which to pin the recent poor performance of the Webjet share price compared to that of Corporate Travel.

It could be due to the market believing business travel will restart quicker than leisure travel. Though, that doesn't take into account the online travel agent's business-to-business branch, WebBeds, which services the travel industry.

Additionally, Webjet has previously predicted it will be turning a profit at the same time as Corporate Travel.

At Webjet's annual general meeting, the company's managing director said the business is expected to be cash-flow positive in the first half of financial year 2022.

Whereas, Corporate Travel recently predicted it will return to profitability in the final quarter of the 2021 calendar year.

Unfortunately, there's no clear answer as to why the Webjet share price is underperforming that of Corporate Travel.

But, at least Webjet's stock isn't alone in its struggles. Plenty of ASX travel shares are battling to get back into the green.

The Qantas Airways Limited (ASX: QAN) share price has fallen 2.1% over the last month, while that of Flight Centre Travel Group Ltd (ASX:  FLT) has slumped 17.6%.

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Corporate Travel Management Limited and Webjet Ltd. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Travel Shares

Bored woman waiting for her flight at the airport.
Travel Shares

Why is the Flight Centre share price falling today?

What's going on with this travel agent's shares?

Read more »

Man sitting in a plane seat works on his laptop.
Travel Shares

A 'once in a lifetime' opportunity for Qantas shares?

Can this stock fly higher?

Read more »

Two elderly men laugh together as they take a selfie with a mobile phone with a city scape in the background.
Travel Shares

Act fast if you want to receive the next Flight Centre dividend

It won't be long until this travel agent pays its next dividend.

Read more »

Man sitting in a plane looking through a window and working on a laptop.
Travel Shares

Why is the Webjet share price racing to a 52-week high today?

Webjet has been busy talking up its WebBeds business this morning.

Read more »

A businessman points a finger in accusation, indicating a share price or ASX company in trouble
Travel Shares

Qantas shares hit turbulence amid $250,000 fine for 'shameful' conduct

ASX 200 investors are bidding down the Qantas share price on Wednesday.

Read more »

A woman ponders a question as she puts money into a piggy bank with a model plane and suitcase nearby.
Travel Shares

Flight Centre shares plunge 7% despite return of the interim dividend

ASX 200 investors are sending the Flight Centre share price spiralling lower on Wednesday.

Read more »

Happy couple looking at a phone and waiting for their flight at an airport.
Earnings Results

Flight Centre share price on watch amid 565% half-year profit surge

Flight Centre shares could see some sizeable moves today after the ASX 200 travel stock reported on its half-year results.

Read more »

Two elderly men laugh together as they take a selfie with a mobile phone with a city scape in the background.
Travel Shares

Own Flight Centre shares? Here's what you need to know ahead of its results

The travel agent giant is releasing its results on Wednesday next week.

Read more »