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Why Is Allegiant Travel (ALGT) Down 5.3% Since Last Earnings Report?
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A month has gone by since the last earnings report for Allegiant Travel (ALGT - Free Report) . Shares have lost about 5.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Allegiant Travel due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Earnings Beat at Allegiant in Q1
Allegiant reported first-quarter 2023 earnings of $3.04 per share, surpassing the Zacks Consensus Estimate of $2.29. The company had reported loss in the year-ago reported quarter. Operating revenues of $649.7 million beat the Zacks Consensus Estimate of $628.2 million and increased 29.9% on a year-over-year basis.
Passenger revenues, which accounted for the bulk (93.7%) of the top line, increased around 31.3% on a year-over-year basis. Upbeat air travel demand can be correlated with such an increase.
Air traffic (measured in revenue passenger miles) for scheduled service increased 10.3% year over year in the quarter under review. Capacity (measured in available seat miles or ASMs) grew 1.4% from the year-ago reported figure. The load factor (percentage of seats filled by passengers) improved 6.9% to 85.8% in the reported quarter, as traffic surge outweighed capacity expansion.
Operating cost per available seat miles (CASM), excluding fuel, increased 9.8% year over year to 7.75 cents. Average fuel cost per gallon (scheduled) surged 13.6% to $3.42. Total scheduled service passenger revenue per available seat miles (TRASM) improved to 13.89 cents from the year-ago reported 10.78 cents.
Liquidity
As of Mar 31, 2023, Allegiant Travel’s total unrestricted cash and investments totaled $1,077 million compared with $1,018.4 million at the end of December 2022. Long-term debt and finance lease obligations (net of current maturities and related costs) was $2,105.9 million compared with $2,097 million reported at the end of 2022. Debt, net of unrestricted cash and investments, came in at $1,028.9 million compared with $1,078.6 million at December 2022 end. .
2023 Expectations
For 2023, ASM (for scheduled service) is now expected to increase 0-3% (prior view: 2-6%) on a year-over-year basis. Total system ASM is now expected to rise 0-3% (prior view: 2-6%) on a year-over-year basis. Earnings per share (airline) are now expected in the $9.00 - $13.00 (prior view: $5.00-$9.00) range. Fuel cost per gallon is expected to be $3.00 (prior view: $3.60).
Interest expenses are still expected in the range of $150-$160 million.
For 2023, under Airline capex, aircraft, engines, induction costs and pre-delivery deposits are still expected in the $550-$570 million range. Capitalized deferred heavy maintenance is expected in the range of $50-$60 million. Other airline capital expenditures are expected between $130 million and $150 million.
Total project spending (Sunseeker Resorts Project) for 2023 is expected to be $695 million (prior view: $618 million). The company expects to expand its fleet size to 127 at 2023-end.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 37.17% due to these changes.
VGM Scores
Currently, Allegiant Travel has a strong Growth Score of A, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Allegiant Travel has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Allegiant Travel is part of the Zacks Transportation - Airline industry. Over the past month, SkyWest (SKYW - Free Report) , a stock from the same industry, has gained 15.2%. The company reported its results for the quarter ended March 2023 more than a month ago.
SkyWest reported revenues of $691.83 million in the last reported quarter, representing a year-over-year change of -5.9%. EPS of -$0.45 for the same period compares with $0.35 a year ago.
For the current quarter, SkyWest is expected to post a loss of $0.57 per share, indicating a change of -153.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -18% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for SkyWest. Also, the stock has a VGM Score of C.
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Why Is Allegiant Travel (ALGT) Down 5.3% Since Last Earnings Report?
A month has gone by since the last earnings report for Allegiant Travel (ALGT - Free Report) . Shares have lost about 5.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Allegiant Travel due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Earnings Beat at Allegiant in Q1
Allegiant reported first-quarter 2023 earnings of $3.04 per share, surpassing the Zacks Consensus Estimate of $2.29. The company had reported loss in the year-ago reported quarter. Operating revenues of $649.7 million beat the Zacks Consensus Estimate of $628.2 million and increased 29.9% on a year-over-year basis.
Passenger revenues, which accounted for the bulk (93.7%) of the top line, increased around 31.3% on a year-over-year basis. Upbeat air travel demand can be correlated with such an increase.
Air traffic (measured in revenue passenger miles) for scheduled service increased 10.3% year over year in the quarter under review. Capacity (measured in available seat miles or ASMs) grew 1.4% from the year-ago reported figure. The load factor (percentage of seats filled by passengers) improved 6.9% to 85.8% in the reported quarter, as traffic surge outweighed capacity expansion.
Operating cost per available seat miles (CASM), excluding fuel, increased 9.8% year over year to 7.75 cents. Average fuel cost per gallon (scheduled) surged 13.6% to $3.42. Total scheduled service passenger revenue per available seat miles (TRASM) improved to 13.89 cents from the year-ago reported 10.78 cents.
Liquidity
As of Mar 31, 2023, Allegiant Travel’s total unrestricted cash and investments totaled $1,077 million compared with $1,018.4 million at the end of December 2022. Long-term debt and finance lease obligations (net of current maturities and related costs) was $2,105.9 million compared with $2,097 million reported at the end of 2022. Debt, net of unrestricted cash and investments, came in at $1,028.9 million compared with $1,078.6 million at December 2022 end. .
2023 Expectations
For 2023, ASM (for scheduled service) is now expected to increase 0-3% (prior view: 2-6%) on a year-over-year basis. Total system ASM is now expected to rise 0-3% (prior view: 2-6%) on a year-over-year basis. Earnings per share (airline) are now expected in the $9.00 - $13.00 (prior view: $5.00-$9.00) range. Fuel cost per gallon is expected to be $3.00 (prior view: $3.60).
Interest expenses are still expected in the range of $150-$160 million.
For 2023, under Airline capex, aircraft, engines, induction costs and pre-delivery deposits are still expected in the $550-$570 million range. Capitalized deferred heavy maintenance is expected in the range of $50-$60 million. Other airline capital expenditures are expected between $130 million and $150 million.
Total project spending (Sunseeker Resorts Project) for 2023 is expected to be $695 million (prior view: $618 million). The company expects to expand its fleet size to 127 at 2023-end.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended upward during the past month.
The consensus estimate has shifted 37.17% due to these changes.
VGM Scores
Currently, Allegiant Travel has a strong Growth Score of A, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Allegiant Travel has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Allegiant Travel is part of the Zacks Transportation - Airline industry. Over the past month, SkyWest (SKYW - Free Report) , a stock from the same industry, has gained 15.2%. The company reported its results for the quarter ended March 2023 more than a month ago.
SkyWest reported revenues of $691.83 million in the last reported quarter, representing a year-over-year change of -5.9%. EPS of -$0.45 for the same period compares with $0.35 a year ago.
For the current quarter, SkyWest is expected to post a loss of $0.57 per share, indicating a change of -153.3% from the year-ago quarter. The Zacks Consensus Estimate has changed -18% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for SkyWest. Also, the stock has a VGM Score of C.