Yet Another Value Podcast

Pershing Square Challenge 2026 Finalists Pitch Amadeus $AMS | the Toll Booth on Global Travel

The Pershing Square Challenge finalists presented a deep‑dive pitch on Amadeus (AMS), the global “toll booth” for airline bookings and hospitality reservations. The team highlighted Amadeus’s dominant position—about a 50% share in its core distribution, IT solutions, and hotel‑management segments—and its steady 7% revenue growth with 11% EPS compounding. Key insights centered on the dual nature of AI: it could disintermediate Amadeus’s distribution platform and enable airlines to build cheaper in‑house passenger service systems, creating a downside risk. Despite a 30% share‑price decline, the stock now trades around 15‑times earnings, a discount from its historical 22‑23× range, suggesting potential undervaluation. However, the company’s sizable share‑based compensation—approximately $700 million—dilutes equity and tempers the cheapness narrative. Host Andrew Walker noted the market’s “multiple compression” and praised a slide showing the stock’s price trajectory from the low $70s to mid‑$50s, while also pointing out recent share‑buybacks that signal confidence. The team’s rigorous, semester‑long research, including professor feedback and competitive analysis, underscored Amadeus’s classification as a “SAS‑proof” business, resilient to broader software‑as‑a‑service volatility. For investors, the pitch suggests a nuanced opportunity: a market‑leader with solid cash flow and a modest valuation, yet exposed to AI‑driven disruption and equity dilution. Assessing whether the AI risk is already priced will be critical in deciding if Amadeus can deliver the compound returns its peers enjoy.