Web Travel Group Ltd (ASX: WEB) shares have surged more than 10% after the company announced strong revenue guidance for the first half of FY27 and a $90 million share buyback.
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Web Travel Group is bouncing back
In a statement to the ASX on Tuesday morning, the company said that its first-half revenue for FY27 was expected to be up 11% to 15% on the same period last year.
The company's underlying earnings were also likely to be up on the same period last year, with Web Travel predicting underlying EBITDA of $80 to $86 million despite currency headwinds compared with the first half last year.
For the first half last year, underlying EBITDA was $81.7 million.
The company also said its total transaction volume (TTV) margin was expected to be about 6.7%, up from 6.5%.
Web Travel also announced a buyback of up to $90 million worth of shares, saying, "The Board does not believe the current share price appropriately reflects the Company's trading performance, cash generation and medium-term earnings outlook''.
Web Travel Group Managing Director John Guscic said regarding the company's performance:
Our WebBeds business continues to deliver TTV growth with enhanced margin. 1H27 is on track to be the third consecutive 6-month period where TTV margins have improved over the prior corresponding period. The optimisation initiatives and investments we made in FY26 are delivering and AI-led investments continue to drive our operating leverage. The Company is focused on maximising shareholder value. We have strong liquidity following redemption of the convertible notes in April and a share buy-back demonstrates the Board and management's confidence in the Company's financial strength and outlook.
A further trading update will be provided at the company's annual general meeting on August 27, the company said.
The buyback will be targeting just less than 10% of the company's shares, given it is currently valued at $1.02 billion, and will be funded out of the company's cash reserves.
Web Travel Group shares have been underperforming
Web Travel Group shares have been on the slide recently, and over a 12-month period, are down 39.3%.
They were trading 11.4% higher at $3.12 on Tuesday morning.
Broker Morgans recently upgraded Web Travel Group, and has a $3.75 price target on the stock.
The broker said:
After material share price weakness, we upgrade WEB to a BUY rating. The company is worth materially more than the current share price. We know from past economic and geopolitical events, that after a downturn, travel demand rebounds and so will its earnings and share price.
