Despegar.com (DESP) on 11/15 after gapping up big on earnings saw large unusual options activity as 5500 April $17.50 calls were bought, a position +6% valued at $1.6M currently. DESP is clearing a long-term $4.50/$15.50 zone that measures to a $26.50 target and also now above AVWAP from its 2017 IPO.

DESP has consistently screened as an attractive company, so time to take a closer look. DESP provides a range of travel and travel-related products in Latin America. The company operates through two segments, Air; and Packages, Hotels and Other Travel Products. It also provides a technology platform for its travel suppliers to manage the distribution of their travel products and access to traveler customers. DESP is focusing on expanding non-air and travel package sales, growing B2C and B2B verticals, leveraging its tech platform for growth and expanding the loyalty program and mobile app usage.

DESP has a market cap of $1.18B and trades 18.3X Earnings, 7.5X EBITDA and 1.7X EV/Sales with revenues seen rising 12.1% in FY25 and EPS growth of 31%. DESP is coming off a strong quarter with 35% Y/Y bookings growth and a record high take rate of 14.6%. DESP also recently signed a 10-year lodging outsourcing agreement with Expedia that takes effect in 2025. Pasaporte Despegar, the loyalty program, grew more than 50% year-over-year, reaching a milestone of 30 million loyalty members. DESP also saw 47% growth in app downloads and app-based transactions are now 51% of bookings, organic traffic.