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What's in Store for Allegiant (ALGT) This Earnings Season?
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Allegiant Travel Company (ALGT - Free Report) is scheduled to report fourth-quarter 2020 results on Feb 3, after market close.
The company has a mediocre earnings track record. Its bottom line surpassed estimates in two of the last four quarters and lagged estimates in the other two. It has a trailing four-quarter earnings surprise of 57.3%, on average.
The Zacks Consensus Estimate for the December-quarter bottom line has widened to a loss of $2.44 from $2.40 loss in the past 60 days.
Against this backdrop, let’s take a look at the factors that are expected to have impacted the company’s fourth-quarter performance.
Low air travel demand due to COVID-19 is likely to have dented Allegiant’s fourth-quarter performance and hurt passenger revenues. The consensus estimate for passenger revenues suggests a decline 43.6% from the year-ago quarter’s reported number.
To tackle low demand, the company resorted to capacity cuts. The Zacks Consensus Estimate for capacity (measured in available seat miles) and traffic (measured in revenue passenger miles) for scheduled services reflects a 14% and 39.2% plunge from the year-ago quarter’s reported number, respectively. Since expected decline in traffic outweighs expected capacity contraction, load factor (% of seats filled by passengers) for scheduled services is likely to have declined in the to-be-reported quarter. Notably, the Zacks Consensus Estimate for load factor in the December quarter is currently pegged at 53%, which suggests a fall from 82% reported in the fourth quarter of 2019.
With coronavirus affecting demand significantly, low fuel prices are expected to have partly offset the adversities and contributed to the bottom line in the fourth quarter. The consensus mark for average fuel cost per gallon (for total system statistics) indicates 28% decline from the year-ago quarter’s reported figure.
Earnings Whispers
Our proven model does not predict an earnings beat for Allegiant this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise, which, however, is not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Allegiant has an Earnings ESP of +11.04%. The Most Accurate Estimate is at a loss of $2.17, narrower than the Zacks Consensus Estimate of a loss of $2.44. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
In third-quarter 2020, Allegiant incurred a loss (excluding $2.46 from non-recurring items) of $4.28 per share, narrower than the Zacks Consensus Estimate of a loss of $4.81. Results were hurt by coronavirus-induced weakness in air-travel demand. Moreover, operating revenues of $201 million plunged 54% year over year but surpassed the Zacks Consensus Estimate of $192.2 million. The downside was due to 53.5% fall in passenger revenues, which accounted for bulk (90.5%) of the top line.
Stocks to Consider
Investors interested in the broader Transportation sector may consider Air Lease Corporation (AL - Free Report) , Copa Holdings, S.A. (CPA - Free Report) and SkyWest, Inc. (SKYW - Free Report) , as these stocks possess the right combination of elements to beat on earnings this reporting cycle.
Air Lease has an Earnings ESP of +6.11% and a Zacks Rank #3. The company will release fourth-quarter earnings numbers on Feb 22.
Copa Holdings has an Earnings ESP of +14.39% and a Zacks Rank of 3. The company will announce fourth-quarter results on Feb 10.
SkyWest has an Earnings ESP of +18.63% and a Zacks Rank #1. The company is scheduled to release fourth-quarter earnings figures on Feb 4.
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What's in Store for Allegiant (ALGT) This Earnings Season?
Allegiant Travel Company (ALGT - Free Report) is scheduled to report fourth-quarter 2020 results on Feb 3, after market close.
The company has a mediocre earnings track record. Its bottom line surpassed estimates in two of the last four quarters and lagged estimates in the other two. It has a trailing four-quarter earnings surprise of 57.3%, on average.
The Zacks Consensus Estimate for the December-quarter bottom line has widened to a loss of $2.44 from $2.40 loss in the past 60 days.
Against this backdrop, let’s take a look at the factors that are expected to have impacted the company’s fourth-quarter performance.
Allegiant Travel Company Price and EPS Surprise
Allegiant Travel Company price-eps-surprise | Allegiant Travel Company Quote
Low air travel demand due to COVID-19 is likely to have dented Allegiant’s fourth-quarter performance and hurt passenger revenues. The consensus estimate for passenger revenues suggests a decline 43.6% from the year-ago quarter’s reported number.
To tackle low demand, the company resorted to capacity cuts. The Zacks Consensus Estimate for capacity (measured in available seat miles) and traffic (measured in revenue passenger miles) for scheduled services reflects a 14% and 39.2% plunge from the year-ago quarter’s reported number, respectively. Since expected decline in traffic outweighs expected capacity contraction, load factor (% of seats filled by passengers) for scheduled services is likely to have declined in the to-be-reported quarter. Notably, the Zacks Consensus Estimate for load factor in the December quarter is currently pegged at 53%, which suggests a fall from 82% reported in the fourth quarter of 2019.
With coronavirus affecting demand significantly, low fuel prices are expected to have partly offset the adversities and contributed to the bottom line in the fourth quarter. The consensus mark for average fuel cost per gallon (for total system statistics) indicates 28% decline from the year-ago quarter’s reported figure.
Earnings Whispers
Our proven model does not predict an earnings beat for Allegiant this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of a positive surprise, which, however, is not the case here. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Allegiant has an Earnings ESP of +11.04%. The Most Accurate Estimate is at a loss of $2.17, narrower than the Zacks Consensus Estimate of a loss of $2.44. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Allegiant carries a Zacks Rank #5 (Strong Sell), currently.
Highlights of Q3
In third-quarter 2020, Allegiant incurred a loss (excluding $2.46 from non-recurring items) of $4.28 per share, narrower than the Zacks Consensus Estimate of a loss of $4.81. Results were hurt by coronavirus-induced weakness in air-travel demand. Moreover, operating revenues of $201 million plunged 54% year over year but surpassed the Zacks Consensus Estimate of $192.2 million. The downside was due to 53.5% fall in passenger revenues, which accounted for bulk (90.5%) of the top line.
Stocks to Consider
Investors interested in the broader Transportation sector may consider Air Lease Corporation (AL - Free Report) , Copa Holdings, S.A. (CPA - Free Report) and SkyWest, Inc. (SKYW - Free Report) , as these stocks possess the right combination of elements to beat on earnings this reporting cycle.
Air Lease has an Earnings ESP of +6.11% and a Zacks Rank #3. The company will release fourth-quarter earnings numbers on Feb 22.
Copa Holdings has an Earnings ESP of +14.39% and a Zacks Rank of 3. The company will announce fourth-quarter results on Feb 10.
SkyWest has an Earnings ESP of +18.63% and a Zacks Rank #1. The company is scheduled to release fourth-quarter earnings figures on Feb 4.
Zacks Names “Single Best Pick to Double”
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
You know this company from its past glory days, but few would expect that it’s poised for a monster turnaround. Fresh from a successful repositioning and flush with A-list celeb endorsements, it could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in a little more than 9 months and Nvidia which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>