FLT share price in focus
Founded in Sydney in 1982, Flight Centre is a global travel agency with operations across more than 80 countries, operating under various brand names.
The company serves both the retail and corporate sectors, offering a range of services including tour operations, travel experiences, and hotel management.
Flight Centre differentiates itself by providing a personal touch that many online travel agencies can’t match. Their consultants manage all aspects of travel planning and are often able to secure exclusive deals for customers, fostering loyalty and repeat business.
The key metrics
For investors, FLT’s revenue, gross margin, and profit can provide valuable insights into the company’s performance.
FLT last reported an annual revenue of $2,708m with a compound annual growth rate (CAGR) over the last 3 years of 89.8% per year. While the absolute number is useful to know, the key point is the trend. We want to see a consistent, upward trajectory in revenue.
Gross margin measures profitability before taking into account overhead costs – it reflects the strength of the company’s core business operations. FLT’s latest reported gross margin stood at 42.4%.
Finally, the number we’re most interested in – profit. Last financial year Flight Centre Travel Group Ltd reported a profit of $140m. Three years ago they made a profit of $433m, representing a CAGR of -31.4%.
Financial health of FLT shares
Profitability is important, but equally important is the capital health of the company. We want to know about the company’s leverage, their capacity to pay debts, and their ability to generate a return on assets. One measure we can look at is net debt. This is simply the total debt minus the company’s cash holdings.
Flight Centre Travel Group Ltd’s net debt currently sits at $283m. Higher debt levels can increase sensitivity to interest rate changes and economic cycles.
Another figure we can look at is the debt/equity percentage. This tells us how much debt the company has relative to shareholder equity – this is also known as leverage. FLT has more equity than debt, with a debt/equity ratio of 84.1%.
Finally, we can look at the return on equity (ROE). The ROE tells us how efficiently the company is turning shareholder equity into profit – high numbers indicate the company is generating a lot of value for investors, while a low number raises concerns that capital isn’t necessarily being allocated efficiently. FLT generated an ROE of 11.9% in FY24.
What to make of FLT shares?
With a high ROE and strong revenue growth over the last 3 years, the FLT share price looks like one to watch in 2025. However, take note of the negative trend in profits – this is something to keep an eye on.
Please keep in mind this should only be the beginning of your research. It’s important to get a good grasp of the company’s financials and compare it to its peers. It’s also important to make sure the company is priced fairly. To learn more about share price valuation, you can sign up for one of our many free online investing courses.
