I am always on the lookout for opportunities that look like strong long-term ideas. At the current time, I think the Corporate Travel Management Ltd (ASX: CTD) share price looks like a compelling idea in the ASX travel share space.
As the name may suggest, it's a leading business in corporate travel. There are a few factors the company says put it ahead of many other competitors. These include its value proposition, its global scale, and its financial strength. Corporate Travel believes all are highly relevant during the COVID-19 recovery period.
But there's more to why I think the business is looking like a good value opportunity than just what it does.
Better valuation
It sounds pretty simple, but I prefer being able to buy a business at a lower price than a higher price.
How much cheaper is the business? It depends on when you look at the price changes but since 29 April 2022, the Corporate Travel Management share price has dropped around 30%.
While it's not quite as simple as saying the business is now 30% better value, I think the company is a lot more appealing considering travel is returning in volume.
Looking at the earnings estimate on CMC Markets, the ASX travel share is projected to generate earnings per share (EPS) of 79 cents in FY23. That puts it at 23 times FY23's estimated earnings.
Strong market share gains
The company claims that it is recovering well ahead of consensus and is ahead of its peers. To me, this is a sign of the quality of the company and how strong it is in the market, which is probably a good omen for the future.
Management thinks that the company will reach 100% recovery faster than the wider corporate travel industry.
The company says that it has made "strong market share gains" thanks to its value proposition of service, technology, and the fact that a return on investment (ROI) is highly relevant. Corporate Travel Management also noted that there are little to no recovery impediments existing in North America, the European Union, and Australia and New Zealand.
Profitable recovery
The company has made "transformational" acquisitions during the COVID-19 period which can help it generate much more profit.
Corporate Travel Management said it's targeting earnings before interest, tax, depreciation and amortisation (EBITDA) of $265 million at full recovery. This would be 76% more than it was before COVID-19 hit. The company's FY22 fourth-quarter revenue was expected to exceed what was generated in 2019.
The company has been making underlying EBITDA profit since March 2021. But, it was expecting the FY22 fourth quarter would provide strong momentum going into the 2023 financial year.
Foolish takeaway
When you put all those factors together, I think the Corporate Travel Management share price looks much more attractive as it works towards a full recovery of volume and much greater profitability.
