The Webjet Limited (ASX: WEB) share price is having a strong year.
Since the start of 2021, the online travel agent's shares have risen 19% to $6.13.
Where next for the Webjet share price?
Ahead of the release of the company's half year results next week, the team at Goldman Sachs has reaffirmed its bullish view on the Webjet share price.
According to the note, the broker has a buy rating and $7.00 price target on its shares.
Based on the current Webjet share price, this implies potential upside of over 14% for investors over the next 12 months.
What did the broker say?
Goldman revealed what it is expecting from Webjet when it releases its results next week.
Goldman expects total transaction value (TTV) to increase 611% to $668.6 million during the half, with the WebBeds business a key driver of this. Goldman has forecast a 534% lift in WebBeds TTV to $456.3 million.
In respect to revenue, the broker expects this TTV growth to underpin revenue of $52.5 million.
However, it is still too soon for Webjet to make a profit according to the broker. Goldman has pencilled in an EBITDA loss of $13.4 million and a net loss of $35.5 million.
What else should you look out for?
Given how Webjet has been posting losses during the pandemic, its balance sheet has become a key focus for investors. Positively, Goldman expects the company to end the period with a strong cash position.
It commented: "While the worst should be behind us, the Balance Sheet positioning is still important for WEB. Management guided to a positive Operating Cash Flow for 1H22 (GSe at A$6.8mn). We expect the Net cash position to be at A$117mn at the end of 1H22 (includes treatment of the 2nd Convertible Note as a debt instrument rather than Equity given that the option was only in-the-money post the end of September 2021)."
Another key item for investors to watch out for is the OTA business' market share.
Goldman explained: "While we expect the OTA business to have remained light into September 2021 (bookings already discussed over Apr-Aug), a trading update into the recovery and indication of market share into October will be a key data point to watch for from our perspective. As noted in the Kayak data charts, international bookings has significantly accelerated since the Federal government's announcement of international border reopenings. WEB's market share in this business will be an important forward-looking indicator of their positioning to capture the international business where they have historically been under weighted."
All in all, the broker is expecting a much-improved result and remains positive on its outlook and the Webjet share price at the current level.
