Originally Posted by
winner69
Forbar have UNDERPERFORM on SKO
Part of piece in NBR -
Lindsay said in his note he believed the market was “inappropriately pricing a high degree of certainty around the long-term outlook” for Serko’s key partnership with Booking.com for Business (B4B) which is responsible for about 60% of its revenue.
Serko, which is due to report full-year financials next Tuesday, announced a renewal of the B4B partnership at the end of April, although with a revised revenue sharing arrangement giving it lower commission at higher quantities of ‘completed room nights’ (CRN).
The note said the structure of the new contract would mean sustaining elevated levels of revenue growth would be increasingly challenging at higher levels of CRNs, and it would be more difficult to generate operational leverage due to a deteriorating gross margin profile.