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Here's Why Investors Should Avoid Hawaiian Holdings (HA) Now

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Hawaiian Holdings’ (HA - Free Report) financial stability is challenged by high operating expenses and low liquidity. High fuel costs exacerbate the strain on the company's bottom line. Also, low liquidity impedes its ability to meet obligations, thereby making it an unattractive choice for investors’ portfolios.

Let’s delve deeper.

Southward Earnings Estimate Revision: The Zacks Consensus Estimate for current-quarter earnings has been revised 145.3% downward over the past 60 days. For the current year, the consensus mark for earnings has moved 43.2% south in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.

Weak Zacks Rank: HA currently carries a Zacks Rank #4 (Sell).

Unimpressive Price Performance: Hawaiian Holdings has declined 9.5% year to date against its sector’s 9.9% growth.

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Other Headwinds: Rising fuel costs are hindering Hawaiian Holdings’bottom line. This trend is primarily due to the ongoing production cuts adopted by Saudi Arabia and Russia. The fuel price per gallon is anticipated to be $2.85 for the second quarter of 2024 and $2.83 for the full year of 2024.

The northward movement in expenses on labor is also hurting HA's bottom line by pushing up operating costs.The company expects costs per available seat mile (excluding fuel & non-recurring items) in the second quarter of 2024 to increase 5-8% from the second-quarter 2023 actuals. Our estimate hints at a 6.2% increase.

Hawaiian Holdings ended the first quarter of 2024 with a current ratio (a measure of liquidity) of 0.89. A current ratio of less than 1 implies that the company does not have enough cash to meet its debt burden, raising liquidity concerns.

Stocks to Consider

Some better-ranked stocks for investors’ consideration in the Zacks Transportationsector include SkyWest (SKYW - Free Report) and Kirby Corporation (KEX - Free Report) , each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

SkyWest has an expected earnings growth rate of 787% for the current year.

SKYW has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 128%. Shares of SkyWest have jumped 104.1% in the past year.

KEX has an expected earnings growth rate of 42.2% for the current year.

The company has an encouraging track record with respect to the earnings surprise, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 10.3%. Shares of Kirby have climbed 59.2% in the past year.

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