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1. Company Snapshot

1.a. Company Description

Despegar.com, Corp., online travel company, provides a range of travel and travel-related products through its websites and mobile applications in Latin America.The company operates in two segments, Air; and Packages, Hotels and Other Travel Products.It offers airline tickets; and travel packages, hotel rooms, car rentals, bus tickets, cruise tickets, travel insurance, destination services, and other travel-related products, which enable consumers to find, compare, plan, and purchase travel products through its marketplace.


The company also provides a technology platform for its travel suppliers to manage the distribution of their travel products and access to traveler customers.In addition, it offers travel products and services under the Despegar, Decolar, Best Day, BD Experience, and HotelDo brands.Further, the company operates Koin, an online payment and consumer lending services platform.


Despegar.com, Corp.was founded in 1999 and is based in Buenos Aires, Argentina.

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1.b. Last Insights on DESP

Despegar.com's recent performance was driven by its agreement to be acquired by Prosus for $19.50 per share in an all-cash transaction, representing an enterprise value of approximately $1.7 billion. This deal comes as a significant positive development for the company, providing a premium to its shareholders. Additionally, Despegar's growth outlook has been viewed as fairly valued, with the company showing strong growth in Latin America, driven by market share gains, acquisitions, and B2B revenue growth.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Prosus and Despegar Complete Acquisition

May -15

Source: businesswire.com

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Prosus and Despegar Complete Acquisition

May -15

Source: businesswire.com

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Despegar.com: B2B Expansion, But Caution Due To Investigations In Brazil

Mar -27

Source: seekingalpha.com

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Despegar and HBX Group Enter Into a Strategic Partnership

Jan -29

Source: businesswire.com

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Assessing Prosus' Value After The Despegar Acquisition And Tencent's Correction

Jan -08

Source: seekingalpha.com

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$HAREHOLDER ALERT: The M&A Class Action Firm Investigates the Merger of Despegar.com, Corp. - DESP

Dec -30

Source: prnewswire.com

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Prosus buys Despegar for $1.7B, taking a bite out of Latin America's travel sector

Dec -23

Source: techcrunch.com

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Shareholder Alert: Ademi LLP investigates whether Despegar.com, Corp. is obtaining a Fair Price for its Public Shareholders

Dec -23

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.25%)

6. Segments

Packages, Hotels and Other Travel Products

Expected Growth: 12.0%

Despegar.com's 12.0% growth in Packages, Hotels and Other Travel Products is driven by increasing online travel bookings, strategic partnerships, and expansion into new markets. Additionally, the company's user-friendly platform, competitive pricing, and loyalty programs contribute to its growth. Furthermore, the rise of middle-class consumers in Latin America and increased travel demand also support this growth.

Air

Expected Growth: 10.0%

Despegar.com's 10.0% growth in Air segment is driven by increasing online travel bookings in Latin America, fueled by rising middle-class disposable income, improved internet penetration, and government investments in tourism infrastructure. Additionally, the company's strategic partnerships with airlines and hotels, as well as its user-friendly online platform, contribute to its market share expansion.

Financial Services

Expected Growth: 11.0%

Despegar.com's 11.0% growth in Financial Services is driven by increasing online travel bookings, expansion into new markets, and strategic partnerships. The company's diversified financial products, including travel insurance and payment solutions, also contribute to growth. Additionally, investments in digital marketing and user experience enhancements have improved customer engagement and retention, further fueling growth.

7. Detailed Products

Flight Tickets

Despegar.com offers a wide range of flight tickets from various airlines, allowing customers to book and compare prices for domestic and international flights.

Hotel Reservations

Despegar.com provides a vast selection of hotels worldwide, allowing customers to book accommodations that fit their budget and preferences.

Package Deals

Despegar.com offers bundled packages that include flights, hotels, and car rentals, providing customers with convenient and cost-effective travel solutions.

Car Rentals

Despegar.com partners with top car rental companies to offer a wide range of vehicles for rent, making it easy for customers to explore their destinations.

Travel Insurance

Despegar.com offers travel insurance policies that provide protection against unforeseen events, giving customers peace of mind during their trips.

8. Despegar.com, Corp.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Despegar.com, Corp. faces moderate threat from substitutes as customers have limited options for online travel agencies in Latin America, but the company's strong brand recognition and user-friendly platform help to mitigate this threat.

Bargaining Power Of Customers

Despegar.com, Corp. has a large customer base, which reduces the bargaining power of individual customers. Additionally, the company's user-friendly platform and competitive pricing make it difficult for customers to negotiate better deals.

Bargaining Power Of Suppliers

Despegar.com, Corp. has a moderate level of bargaining power over its suppliers, including airlines, hotels, and other travel service providers. While the company has some negotiating power due to its large customer base, suppliers also have some bargaining power due to the fragmented nature of the travel industry.

Threat Of New Entrants

Despegar.com, Corp. faces a high threat from new entrants, particularly from global online travel agencies looking to expand into Latin America. The company's strong brand recognition and established relationships with suppliers help to mitigate this threat, but new entrants could still disrupt the market.

Intensity Of Rivalry

Despegar.com, Corp. operates in a highly competitive market, with several established players vying for market share. The company's strong brand recognition and competitive pricing help to maintain its market position, but the intense rivalry among competitors drives up marketing and advertising expenses.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 80.44%
Debt Cost 14.12%
Equity Weight 19.56%
Equity Cost 14.12%
WACC 14.12%
Leverage 411.29%

11. Quality Control: Despegar.com, Corp. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

19.5$

Current Price

19.5$

Potential

-0.00%

Expected Cash-Flows