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Here's Why You Should Avoid Frontier Group Stock for Now

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Key Takeaways

  • ULCC earnings estimates plunged, with the 2025 forecast cut by 230% in 60 days.
  • Shares sank 31.1% mention the time period, while the Transportation - Airline industry gained 11.7%.
  • Q2 CASM rose 8% as lower aircraft utilization and fleet timing drove costs.

Frontier Group (ULCC - Free Report) is facing mounting pressureon its bottom lineas rising costs and operational inefficiencies weigh on its financial performance, making it an unattractive choice for investors’ portfolios.

Let’s delve deeper.

ULCC: Key Risks to Watch

Southward Bottom Line Estimate Revision: The Zacks Consensus Estimate for the current-quarter loss, currently pegged at 35 cents per share, has widened from a loss of 9 cents, 30 days ago. Meanwhile, the Zacks Consensus Estimate for 2025 loss stands at 66 cents per share, much wider than the loss of 40 cents a month ago.

The unfavorable estimate revision indicates brokers’ lack of confidence in the stock.

Dim Price Performance:  The company’s price trend reveals that its shares have declined 31.1% in the year-to-date period compared with the Transportation - Airline industry’s 11.7% growth.

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Unimpressive Earnings Surprise: ULCC has a mixed earnings surprise history, having outpaced the Zacks Consensus Estimate in two of the trailing four quarters and missing the mark on the other occasions, with the average miss being 17.54%.

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

Other Headwinds: Frontier Airlines faced multiple headwinds in the second quarter of 2025 despite maintaining its commitment toward growth. The 8% year-over-year rise in CASM to 9.73 cents, driven primarily by a 13% decline in average daily aircraft utilization, lower sale-lease back gains, and fleet growth timing, pressured cost performance. Even CASM excluding fuel climbed sharply to 7.50 cents from 6.24 cents in the prior-year quarter, signalling broad-based cost pressures beyond just fuel prices.

Additionally, a net loss of $70 million underscores profitability challenges as expenses outpaced revenue growth despite efficiency gains like higher ASMs per gallon. The lower-capacity deployment is likely to hurt revenues in the near term, further magnifying cost impacts.

Airline Stocks to Consider

Investors interested in the airline industry may consider LATAM Airlines Group (LTM - Free Report) and SkyWest (SKYW - Free Report) .

LTM currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

LTM has an expected earnings growth rate of 45% for the current year. The company has a mixed earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in two of the trailing four quarters, missed once and met in the remaining one, delivering an average beat of 4.04%.

SKYW currently sports a Zacks Rank #1.

SkyWest has an expected earnings growth rate of 28.06% for the current year. The company has an encouraging earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 21.92%.


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SkyWest, Inc. (SKYW) - free report >>

LATAM Airlines Group S.A. (LTM) - free report >>

Frontier Group Holdings, Inc. (ULCC) - free report >>

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