Why did the Webjet (ASX:WEB) share price fall 7% last week

Webjet shares nosedived last week. Here’s why.

| More on:
A sad woman sits leaning on her suitcase in a deserted airport lounge as the Qantas share price falls

Image source: Getty Images

Key Points

  • Webjet shares impacted following latest announcements by the West Australian government
  • No definitive reopening of domestic borders
  • WebBeds business performing well in key overseas markets

The Webjet Limited (ASX: WEB) share price rapidly descended last week on the back of a broader market sell-off.

At Friday’s market close, the online travel agent’s shares tumbled 2.30% to $5.09 apiece. This means that its shares lost 6.78% since this time last week, reflecting a near 6-month low.

In contrast, the S&P/ASX 200 Index (ASX: XJO) dropped 2.27% to 7,175.8 points on Friday. The benchmark index sunk 3.99% for the week, which was a 7-month low.

What happened to Webjet shares?

Investors have continued to dump the Webjet share price following a sluggish recovery of the travel market.

A rise in COVID-19 cases across Australia has led the Western Australian government to delay the reopening of their borders. This has not only led domestic passengers to cancel holiday plans but has also affected international tourists.

Double vaccinated interstate and international travellers would have been able to enter Western Australia without quarantine from 5 February. However, with the border remaining closed indefinitely, it could be until easter before the restriction is lifted.

A reported 6,000 interstate and international passengers were expected to arrive at Perth Airport on the border reopening date.

Investor confidence has turned sour following COVID-19 outbreaks across the country. No doubt, this has caused a dent in potential Webjet earnings for the 2022 financial year.

Nonetheless, the company’s WebBeds business in North America is tracking ahead of pre-COVID total transaction value (TTV) volumes. On the other hand, Europe is forecasted to return to pre-COVID TTV levels in the second-half of FY23.

A retained global footprint, hotel supply relationships and global customer network have led the charge.

Looking ahead, Webjet is scheduled to report its FY22 results towards the backend of May 2022.

Webjet share price summary

Year to date, the Webjet share price has fallen by almost 2% following a surge in COVID-19 cases in Australia.

Based on valuation grounds, Webjet has a market capitalisation of around $1.94 billion, with approximately 380.51 million shares on issue.

Should you invest $1,000 in Webjet right now?

Before you consider Webjet, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Webjet wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of January 13th 2022

Motley Fool contributor Aaron Teboneras 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 has recommended Webjet Ltd. 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

plane flying across share markey graph, asx 200 travel shares, qantas share price
Travel Shares

Webjet share price tipped to rise: Broker says it ‘hasn’t wasted a crisis’

Webjet shares could be about to ascend according to one broker...

Read more »

Businesswoman whispering in male colleague's ear as he looks surprised
Travel Shares

‘Never waste a crisis’: Expert picks one ASX share he’d buy right now

Competitors have their hands tied behind their backs, and customers are climbing over each other. What more could a company…

Read more »

Two men shaking hands on a merger.
BNPL shares

Zip just joined forces with another ASX 200 company

A major airline now allows travellers to pay for their flight after they return home, in a landmark deal.

Read more »

A happy couple who are customers of Flight Centre wait for their flight at an airport lounge
Earnings Results

Webjet share price falls on earnings miss, but broker sees ‘results as a positive’

Webjet's earnings missed expectations but one leading broker remains positive...

Read more »

a tourist complete with suitcase and backpack with ticket in hand jumps for joy with his feet off the ground against a brightly coloured background.
Earnings Results

Webjet share price on watch amid 258% revenue jump in FY22

Webjet delivered strong top line growth in FY 2022...

Read more »

It's smiles all around as this couple take a selfie in their seats as their plane takes off and they travel overseas.
Travel Shares

Why is the Flight Centre share price among the ASX 200’s top performers today?

Are international airline stocks behind Flight Centre's latest surge?

Read more »

A happy couple who are customers of Flight Centre wait for their flight at an airport lounge
Travel Shares

Why is the Webjet share price outperforming on Monday?

Could this be boosting the online travel agent's stock today?

Read more »

A little boy runs around the playground lifting a toy aeroplane in the air above his head.
Travel Shares

What’s boosting the Flight Centre share price on Monday?

The ASX 200 travel share has retained a prestigious government contract.

Read more »