Sabre Corporation (SABR) DCF Valuation & Fundamental Primer
Sabre Corporation (SABR) trades at $25.73 with a market enterprise value of $13.83B and generated $2.85B in TTM revenue and -$13.6M in free cash flow (filed 2026-08-06 (period ended 2026-06-30)). Our 5-year DCF model estimates an implied intrinsic value of -$9.61 per diluted share (Grade: C · 44/100 · Capital Intensive / Low Margin).
SEC 10-K/10-Q DCF teardown of Sabre Corporation (SABR): $2.85B TTM revenue (13.2% growth), 31.8% GAAP gross margin, -0.5% FCF margin, 1.7% SBC/revenue, and Rule of 40 score of 12.7%.
Sabre Corporation (SABR) earns a "Watch" rating and an institutional Quality Score of 44/100 (Grade C). On $2.85B in baseline revenue (13.2% growth, 31.8% gross margin, -0.5% FCF margin), our 5-year DCF yields an Enterprise Value of -$284.5M (-$9.61/share vs. $25.73 market price). On the R&D Return Benchmark, SABR ranks #1 of 174 (Harvesters · Grade AAA, 119758422.60× return).
Gross Margin & Unit Economics: Sabre Corporation operates at a 31.8% gross margin on $2.85B revenue (40.6 pts below the Software - Infrastructure median of 72.4%).
R&D Productivity (Harvesters · Grade AAA): Investing 0.0% of revenue in R&D ($0) generates $119758422.60 of incremental gross profit per R&D dollar (Rank #1 of 174).
Rule of 40 & Cash Conversion: Combining 13.2% top-line growth with -0.5% FCF margin yields a 12.7% Rule of 40 score (vs. 38.4% cohort median) and -$284.5M DCF Enterprise Value.
3-Statement Financial Schedule & 5-Year Horizon
Synchronized directly with the 3-Year Operating Statement (31.8% Gross Margin · 13.2% Growth)
| Income Statement Line | Year 1 (2026) | Year 2 (2027) | Year 3 (2028) |
|---|---|---|---|
| Revenue | $2.85B | $3.23B | $3.66B |
| Cost of Revenue (COGS) | ($1.95B) | ($2.19B) | ($2.46B) |
| Gross Profit & Margin | $908.8M (31.8%) | $1.04B (32.3%) | $1.20B (32.8%) |
| Research & Development (R&D) | $0 | $155.0M | $168.2M |
| Sales & Marketing (S&M) | $421.3M | $457.8M | $496.5M |
| General & Administrative (G&A) | $163.8M | $178.0M | $193.1M |
| Operating EBIT | $323.7M (11.3%) | $253.9M (7.9%) | $342.9M (9.4%) |
| Adjusted EBITDA | $432.1M (15.1%) | $376.6M (11.7%) | $481.8M (13.2%) |
3 Key Underwriting Risks
Structural sensitivities monitored in the 3-Statement Financial Engine
Value-Creation Levers · Quantified Statement Impact
Apply any lever below to write its operating assumptions directly into the 3-Statement Model
Automate cloud hosting & support workflows to lift gross margin from 31.8% to 36.8%.
Align R&D intensity and ASC 350-40 capitalization to the R&D Compounders cohort median, recapturing $57.1M in annual EBITDA.
Lift net dollar retention and expansion velocity by +300 bps, compounding Year 3 revenue to $3.85B.
Sabre Corporation (SABR) 3-Scenario DCF Valuation Range
Stress-test SABR's 5-year growth, target FCF margin, WACC, terminal methodology, and SBC/dilution friction in real time.
Simulate how deploying Gemini workflow automation and autonomous engineering expands SABR's Gross Margin, FCF Margin, DCF share price, and 2x2 R&D Return Quadrant.
Split between 5-Year Explicit Cash Flows and Discounted Terminal Value
2D Institutional Valuation Sensitivity Heatmap
Implied share price & upside/downside spread across 25 valuation states (Current Price: $25.73).
| WACC \ Terminal | 1.5% | 2.0% | 2.5% | 3.0% | 3.5% |
|---|---|---|---|---|---|
| 8.5% | $7.98 -69% | $9.03 -65% | $10.26 -60% | $11.71 -54% | $13.45 -48% |
| 9.3% | $6.26 -76% | $7.09 -72% | $8.04 -69% | $9.15 -64% | $10.44 -59% |
| 10.0% | $4.85 -81% | $5.51 -79% | $6.27 -76% | $7.13 -72% | $8.13 -68% |
| 10.8% | $3.67 -86% | $4.21 -84% | $4.82 -81% | $5.51 -79% | $6.30 -76% |
| 11.5% | $2.66 -90% | $3.12 -88% | $3.62 -86% | $4.18 -84% | $4.81 -81% |
Institutional Software Quality Scorecard (44/100 · Grade C)
Weak cash conversion, substantial dilution drag, or constrained financial flexibility.
Negative free cash flow; business consumes cash to sustain operations
Minimal dilution friction; management compensation aligned with shareholders
Sub-par gross margins; higher cost of delivery or hardware/services mix
Leveraged balance sheet coupled with cash burn; heightened refinancing risk
Core Investment Strengths & Moats
- Low dilution friction: SBC is only 1.7% of revenue
Key Operational & Dilution Risks
- Negative free cash flow burn of -$13.6M over trailing twelve months
- Lower software gross margins (31.8%), indicating higher hosting or service delivery drag
- Balance sheet vulnerability: Net debt of $3.55B while operating with cash burn
Compare Sabre Corporation (SABR) against the software universe on the 2x2 R&D Return vs. R&D Intensity matrix.
Reverse-DCF Solver: What Growth is Priced Into SABR?
The current share price demands 24.1% 5-year CAGR (31.0% net of SBC & dilution)—a +11.0% acceleration over historical run-rate (13.2%). Any growth slowdown risks valuation multiple contraction.
Headline Reverse-DCF ignores Stock-Based Compensation (1.7% of revenue) and annual share dilution (5.1%/yr). Accounting for both requires 31.0% 5-year revenue CAGR to justify $25.73/sh on a true per-share economic cash flow basis.
Sabre Corporation (SABR) 5-Year Fundamental Forecast
| Statement Line Item | TTM Audited Base | TTM | Y1 | Y2 | Y3 | Y4 | Y5 |
|---|---|---|---|---|---|---|---|
| Revenue | $2.85B | $2.85B | $3.23B | $3.66B | $4.14B | $4.68B | $5.30B |
| Gross Profit | $908.8M | $908.7M | $1.03B | $1.16B | $1.32B | $1.49B | $1.69B |
| Operating Income (EBIT) | $323.7M | $323.6M | $366.3M | $414.6M | $469.2M | $531.1M | $601.1M |
| Stock-Based Compensation (SBC) | $48.3M | $48.2M | $54.6M | $61.8M | $69.9M | $79.1M | $89.6M |
| Unlevered Free Cash Flow (FCF) | -$13.6M | -$13.4M | -$15.2M | -$17.2M | -$19.4M | -$22.0M | -$24.9M |
| SBC-Adjusted True Cash Flow | -$61.9M | -$61.6M | -$69.8M | -$79.0M | -$89.4M | -$101.2M | -$114.5M |
Software - Infrastructure Peer Comparables & Rule of 40 Regression
Rule of 40 vs. EV / Revenue Multiple Regression
OLS Fit: EV/Rev = 6.9 + 0.05 × (Rule of 40) · R² = 12%Stocks below the gold regression line trade at a discount relative to their Rule of 40 compounding efficiency.
| Company | Ticker | Market Cap | TTM Revenue | Gross Margin | FCF Margin | Rule of 40 | SBC % Rev | EV / Rev |
|---|---|---|---|---|---|---|---|---|
| Sabre Corporation | SABR | $10.28B | $2.85B | 31.8% | -0.5% | 12.7% | 1.7% | 4.8× |
| Block, Inc. | XYZ | $41.67B | $25.04B | 46.4% | 15.5% | 23.7% | 4.8% | 1.6× |
| CoreWeave, Inc. | CRWV | $35.80B | $1.92B | 74.2% | -80.0% | 0.0% | 1.6% | 23.5× |
| VeriSign, Inc. | VRSN | $22.52B | $1.56B | 87.7% | 56.1% | 61.5% | 3.9% | 15.5× |
| CORPAY, INC. | CPAY | $22.17B | $3.97B | 78.1% | 44.4% | 52.1% | 2.9% | 7.2× |
| NetApp, Inc. | NTAP | $21.02B | $7.39B | 70.6% | 22.3% | 24.6% | 5.4% | 3.0× |
| Joint Stock Co Kaspi.kz | KSPI | $11,481.85B | $2,520.93B | 62.3% | 19.3% | 59.8% | — | 4.4× |
| Peer Cohort Median Benchmark (N=6) | 72.4% | 20.8% | 38.4% | 3.9% | 5.8× | |||
EV / Revenue Multiple Compression Stress Test
| Multiple Scenario | EV / Revenue | Implied Enterprise Value | Implied Equity Value | Implied Share Price | Delta vs Current |
|---|---|---|---|---|---|
| Current Multiple | 4.8× | $13.83B | $10.28B | $25.73 | 0.0% |
| -20% Multiple Compression | 3.9× | $11.06B | $7.51B | $18.80 | -20.0% |
| -35% Multiple Compression | 3.1× | $8.99B | $5.43B | $13.61 | -35.0% |
| Software Baseline Floor (5.0× EV/Rev) | 5.0× | $14.27B | $10.72B | $26.83 | +3.2% |
Frequently Asked Questions: Sabre Corporation (SABR) Valuation
What is Sabre Corporation (SABR)'s intrinsic DCF valuation and implied share price?
Based on audited SEC 10-K/10-Q filings and a 5-year 3-statement discounted cash flow (DCF) model, Sabre Corporation (SABR) has a Base Case implied value of -$9.61 per share (with a Bear Case of -$9.25 and a Bull Case of -$10.08), compared to its current price of $25.73. The model discounts projected free cash flows at a 10.0% WACC and a 2.5% terminal growth rate.
What is Sabre Corporation (SABR)'s Rule of 40 score and Free Cash Flow margin?
Sabre Corporation achieves a Rule of 40 score of 12.7%, combining a 13.2% revenue growth run-rate with a -0.5% TTM free cash flow margin on $2.85B in trailing twelve-month revenue. In the Software - Infrastructure peer cohort, the median Rule of 40 benchmark is 38.4%.
What revenue growth rate is priced into SABR stock according to Reverse-DCF analysis?
At $25.73 per share (Enterprise Value of $13.83B), our Reverse-DCF solver indicates the market is pricing in a 5-year implied revenue CAGR of 24.1%, compared to Sabre Corporation's historical CAGR of 13.2%. Overall market expectations are rated as "Aggressive Growth Expectations Priced In".
What is Sabre Corporation (SABR)'s R&D Return Score and innovation productivity?
Sabre Corporation (SABR) recorded N/A in FY R&D expense (tracked from SEC filings) and $1.56B in FY gross profit. It is currently unranked on the letter-grade leaderboard (pending full multi-year XBRL R&D history).
How does Sabre Corporation compare to Software - Infrastructure peers?
Sabre Corporation (SABR) earns an institutional Software Quality Score of 44/100 (Grade C — Capital Intensive / Low Margin). Across its Software - Infrastructure peer group (XYZ, CRWV, VRSN, CPAY, NTAP), the cohort trades at a median EV/TTM Revenue multiple of 5.8× and a median gross margin of 72.4%.
How does Stock-Based Compensation (SBC) impact Sabre Corporation (SABR)'s valuation?
Sabre Corporation recorded $48.3M in TTM stock-based compensation (1.7% of revenue). When treating SBC as a cash-equivalent compensation expense, Sabre Corporation's SBC-adjusted free cash flow yield is -0.6%, scoring 25/25 on our Shareholder Dilution Friction pillar.