Amadeus IT Group: Overblown Fears Of AI Create A Huge Buy Opportunity
Summary
Amadeus IT Group remains a buy despite a 30% stock decline driven by AI-related fears, which are viewed as overblown.
AI is more an opportunity than a threat for AMADY, leveraging its vast operational data and high switching costs in Airline IT and GDS.
Operational metrics are improving: sales and margins are expanding, with EBITDA CAGR of 8% and free cash flow CAGR of 5.2% from 2024.
The base price target is $66.85 (17% upside), but fair value is $91.88 (60% upside), with current sentiment mispricing AI risks.
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In September, I reiterated my buy rating for Amadeus IT Group (AMADF) (AMADY). Since then, the stock has fallen over 30% on a broader software and enterprise software sell-off on fears that
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This article was written by
Dhierin-Perkash Bechai is an aerospace, defense and airline analyst. Dhierin runs the investing group The Aerospace Forum, whose goal is to discover investment opportunities in the aerospace, defense and airline industry. With a background in aerospace engineering, he provides analysis of a complex industry with significant growth prospects, and offers context to developments as they occur, describing how they might affect investment theses. His investing ideas are driven by data informed analysis. The investing group also provides direct access to data analytics monitors. Learn more.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
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