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Moderate Fuel Costs Aid Allegiant (ALGT) Amid High Debt

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We have recently updated a report on Allegiant Travel Company (ALGT - Free Report) .

Due to lacklustre air-travel demand, the company’s operating revenues declined 31.8% year over year in the first quarter of 2021. With traffic being at a low level, passenger revenues declined 32.3%.  Air traffic for scheduled services declined 25.9%. Also, capacity at the end of March-end quarter dropped 1.1% year on year.

Moreover, Allegiant’s cash position is bland. The carrier exited first-quarter 2021 with cash and cash equivalents of $301.6 million, whereas its long-term debt and finance lease obligations (net of current maturities and related costs) were $1,459.6 million. This implies that the company does not have enough cash to meet debt burden.

Meanwhile, moderate fuel costs partly offset coronavirus-led revenue declines. Evidently, average fuel cost per gallon (scheduled) declined 0.5% to $1.86 in first-quarter 2021. Low fuel costs supported the company’s bottom line in the March-end quarter.

Zacks Rank & Stocks to Consider

Allegiant currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Zacks Transportation sector include Landstar System, Inc. (LSTR - Free Report) , Triton International Limited (TRTN - Free Report) and Herc Holdings Inc. (HRI - Free Report) . Herc Holdings and Landstar sport a Zacks Rank #1 (Strong Buy), while Triton carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term (three to five years) expected earnings per share growth rate for Landstar, Triton and Herc Holdings is projected at 12%, 10% and 42.9%, respectively.

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