Despegar Story

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DESP -- USA Stock  

USD 12.53  0.17  1.34%

Despegar Corp Asset Turnover is very stable at the moment as compared to the past year. Despegar Corp reported last year Asset Turnover of 0.60. As of 11th of March 2021, Book Value per Share is likely to grow to 3.47, while Invested Capital Average is likely to drop (6 M). In this article, we will recap Despegar Corp as a potential position in addition to your existing holdings. We will focus on why it could be a game-changer for Despegar Corp insiders.
Published over a month ago
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Does Despegar Corp (NYSE:DESP) create value for insiders?
The company has a beta of 1.627. Let's try to break down what Despegar's beta means in this case. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, Despegar Corp will likely underperform. The beta indicator helps investors understand whether Despegar Corp moves in the same direction as the rest of the market, and how volatile (i.e., risky) it is compared to the market (i.e., selected benchmark). In other words, if Despegar deviates very little from the market, it does not add much risk to the portfolio, but it also doesn't increase the expected returns.
There are currently many different techniques concerning forecasting the market as a whole as well as predicting future values of individual securities such as Despegar Corp. Regardless of method or technology, to accurately forecast the stock market is more a matter of luck rather than a particular technique. Nevertheless, trying to predict the stock market accurately is still an essential part of the overall investment decision process. Using different forecasting techniques and comparing the results might improve your chances of accuracy even though unexpected events may often change the market sentiment and impact your forecasting results.

Predictive Modules for Despegar Corp

Sophisticated investors, who have witnessed many market ups and downs, frequently view the market will even out over time. This tendency of Despegar Corp's stock price to converge to an average value over time is called mean reversion. However, historically, high market prices usually discourage investors that believe in mean reversion to invest, while low prices are viewed as an opportunity to buy. Please use the tools below to analyze the current value of Despegar Corp in the context of predictive analytics.
Please note, it is not enough to conduct a financial or market analysis of a single entity such as Despegar Corp. Your research has to be compared to or analyzed against Despegar Corp's peers to derive any actionable benefits. When done correctly, Despegar Corp's competitive analysis will give you plenty of quantitative and qualitative data to validate your investment decisions or develop an entirely new strategy towards taking a position in Despegar Corp.

How important is Despegar Corp's Liquidity

Despegar Corp financial leverage refers to using borrowed capital as a funding source to finance Despegar Corp ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. Despegar Corp financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Please check the breakdown between Despegar Corp's total debt and its cash.

How Despegar utilizes its cash?

To perform a cash flow analysis of Despegar Corp, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Despegar Corp is receiving and how much cash it distributes out in a given period. The Despegar Corp cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.
Despegar Corp Net Cash Flow from Operations is very stable at the moment as compared to the past year. Despegar Corp reported last year Net Cash Flow from Operations of 50.87 Million

Another Deeper Perspective

The recent indifference towards the small price fluctuations of Despegar Corp could raise concerns from insiders as the firm it trading at a share price of 12.13 on 289,310 in volume. The company management teams did not add any value to Despegar Corp investors in February. However, most investors can still diversify their portfolios with Despegar Corp to hedge their inherited risk against high-volatility market scenarios. The stock standard deviation of daily returns for 30 days investing horizon is currently 3.53. The above-average risk is mostly attributed to market volatility and speculations regarding some of the upcoming earning calls from Despegar Corp partners.

Margin Breakdown

EBITDA Margin0.0774
Gross Margin0.79
Profit Margin(0.0472)

Will Despegar Corp retake control in April?

Despegar Corp recent downside deviation upswings over 3.84. Despegar Corp shows above-average downside volatility for the selected time horizon. We advise investors to inspect Despegar Corp further and ensure that all market timing and asset allocation strategies are consistent with the estimation of Despegar Corp future alpha. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Despegar Corp's stock risk against market volatility during both bullying and bearish trends. The higher level of volatility that comes with bear markets can directly impact Despegar Corp's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

Our Conclusion on Despegar Corp

Although some other entities in the travel services industry are either recovering or due for a correction, Despegar may not be as strong as the others in terms of longer-term growth potentials. With a somewhat neutral outlook on your 30 days horizon, it may be better to hold off any trading activity and neither buy new shares of Despegar nor sell your existing holdings in the Stock. It seems the expected volatility has not yet been fully factored into the current price. Please use our equity advice module to run different scenarios to ensure your current risk level and investment horizon are fully reflective of your current investing preferences in regards to Despegar Corp.

About Contributor

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Despegar Corp. Please refer to our Terms of Use for any information regarding our disclosure principles.

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