Why We Are Avoiding Despegar Despite Shares Looking Cheap

  • Despegar.com had a successful debut on Wall Street, with its stock closing 24% higher on its first day of trading. Since then, shares have fallen significantly.
  • The company appears to have a very low average customer satisfaction, with many negative reviews found on sites like Trustpilot.
  • While shares look cheap, we believe it could be a value trap and that the company will face increased competition from the likes of Airbnb and Booking.

Despegar.com (NYSE:DESP) is one of those companies that went public at a lofty valuation, and has since experienced a massive reduction in its share price. Its IPO price was $26, and it finished the day at $32, showing an impressive 24% gain on its