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Does SkyWest's Lower Valuation Indicate a Buying Opportunity?
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Key Takeaways
SkyWest had deferred revenues of $264.60 million under its flying contracts as of Dec. 31, 2025.
In a bid to modernize its fleet, SKYW has fleet-related deals with airline heavyweights like UAL, DAL and ALK.
A strong balance sheet enables the company to reward shareholders with share repurchases.
SkyWest, Inc. (SKYW - Free Report) looks cheap from a valuation standpoint. Considering the trailing 12-month price-to-book (P/B)ratio, SkyWest is trading at a discount compared to the industry.
The stock has a trailing 12-month P/B-TTM of 1.56X compared with 3.17X for the industry over the past five years. These factors indicate that the stock’s valuation is attractive. SKYW has a Value Score of A.
SKYW P/B Ratio (Trailing 12 months) Vs. Industry
Image Source: Zacks Investment Research
Now, the question is whether it is worth buying, holding, or selling the SkyWest stock at current prices. Let us delve deeper to find out.
Tailwinds Working in Favor of SKYW Stock
SkyWest's top line benefits from flying contract rate increases. As of Dec. 31, 2025, SkyWest had cumulative deferred revenues of $264.60 million under its flying contracts. Revenues from flying agreements (contributing 95.7% to the top line) grew 13.8% year over year during 2025. The airline carried 8.7% more passengers during 2025 on a year-over-year basis. Departures increased 12.6% on a year-over-year basis.
SkyWest's fleet-modernization efforts to cater to the improvement in travel demand are commendable. In a bid to modernize its fleet, SKYW has fleet-related agreements with airline heavyweights like United Airlines (UAL - Free Report) , Delta Air Lines (DAL - Free Report) and Alaska Airlines (ALK - Free Report) . SkyWest had five E175 aircraft deliveries during the fourth quarter of 2025.
Concurrent with its fourth-quarter 2025 results, SkyWest also announced that it had inked a multi-year contract extension with United Airlines for 40 E175 aircraft in January 2026. SkyWest also reached a multi-year contract extension with Delta Air Lines for 13 E175 aircraft in January 2026. Further, UAL is scheduled to deliver eight E175 planes in 2026. Alaska Airlines is expected to deliver one E175 in 2026. DAL is likely to deliver 10 E175 planes in 2027 and six in 2028. By 2028-end, SkyWest anticipates having nearly 300 E175 aircraft in its fleet. As previously announced, SkyWest entered into a purchase agreement with Embraer, which secures delivery positions for 44 additional E175s from 2028 through 2032 for potential future flying opportunities. SkyWest also secured purchase rights on 50 additional E175s from Embraer.
SkyWest’s solid balance sheet increases financial flexibility. The company ended fourth-quarter 2025 with cash and marketable securities of $706.9 million, higher than the current debt level of $546.81 million. This implies that the company has sufficient cash to meet its current debt obligations. Meanwhile, long-term debt level has decreased to $1.84 billion (which translates into a debt-to-capitalization of 46.6%) at the end of fourth-quarter 2025 from $2.14 billion (which translates into a debt-to-capitalization of 52.6%) at fourth-quarter 2024-end.
Long-Term Debt to Capitalization
Image Source: Zacks Investment Research
A strong balance sheet enables the company to reward shareholders with share repurchases. As a reflection of its shareholder-friendly stance, in May 2025, SKYW's existing repurchase plan was increased by $250 million. SkyWest repurchased 268,000 shares for $27 million during the fourth quarter of 2025. As of Dec. 31, 2025, SkyWest had $213 million available under its current share repurchase program. Buybacks not only reduce the total outstanding share count, thereby increasing earnings per share, but also signal management's belief in the intrinsic value of the stock.
What Do Earnings Estimates Say for SkyWest?
The positive sentiment surrounding SKYW stock is evident from the fact that the Zacks Consensus Estimate for full-year 2026 and 2027 earnings has been revised upward in the past 90 days. The consensus mark for second-quarter 2026 earnings has also been projected northward in the past 90 days.
Image Source: Zacks Investment Research
The favorable estimate revisions indicate brokers’ confidence in the stock.
Time to Buy SKYW Stock
It is understood that SKYW stock is attractively valued, and an increase in flying contracts is contributing to SKYW’s top line. Fleet modernization techniquesand consistent shareholder-friendly initiatives act as other tailwinds. We believe that the positives surrounding the stock (as highlighted throughout the write-up) outweigh the concerns regarding macro-economic uncertainty, escalating operating expenses and pilot shortages (bothering regional carriers like SkyWest). We, therefore, suggest investors add SKYW stock to their portfolios for healthy returns. The company’s Zacks Rank #2 (Buy) further supports our thesis. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Does SkyWest's Lower Valuation Indicate a Buying Opportunity?
Key Takeaways
SkyWest, Inc. (SKYW - Free Report) looks cheap from a valuation standpoint. Considering the trailing 12-month price-to-book (P/B)ratio, SkyWest is trading at a discount compared to the industry.
The stock has a trailing 12-month P/B-TTM of 1.56X compared with 3.17X for the industry over the past five years. These factors indicate that the stock’s valuation is attractive. SKYW has a Value Score of A.
SKYW P/B Ratio (Trailing 12 months) Vs. Industry
Now, the question is whether it is worth buying, holding, or selling the SkyWest stock at current prices. Let us delve deeper to find out.
Tailwinds Working in Favor of SKYW Stock
SkyWest's top line benefits from flying contract rate increases. As of Dec. 31, 2025, SkyWest had cumulative deferred revenues of $264.60 million under its flying contracts. Revenues from flying agreements (contributing 95.7% to the top line) grew 13.8% year over year during 2025. The airline carried 8.7% more passengers during 2025 on a year-over-year basis. Departures increased 12.6% on a year-over-year basis.
SkyWest's fleet-modernization efforts to cater to the improvement in travel demand are commendable. In a bid to modernize its fleet, SKYW has fleet-related agreements with airline heavyweights like United Airlines (UAL - Free Report) , Delta Air Lines (DAL - Free Report) and Alaska Airlines (ALK - Free Report) . SkyWest had five E175 aircraft deliveries during the fourth quarter of 2025.
Concurrent with its fourth-quarter 2025 results, SkyWest also announced that it had inked a multi-year contract extension with United Airlines for 40 E175 aircraft in January 2026. SkyWest also reached a multi-year contract extension with Delta Air Lines for 13 E175 aircraft in January 2026. Further, UAL is scheduled to deliver eight E175 planes in 2026. Alaska Airlines is expected to deliver one E175 in 2026. DAL is likely to deliver 10 E175 planes in 2027 and six in 2028. By 2028-end, SkyWest anticipates having nearly 300 E175 aircraft in its fleet. As previously announced, SkyWest entered into a purchase agreement with Embraer, which secures delivery positions for 44 additional E175s from 2028 through 2032 for potential future flying opportunities. SkyWest also secured purchase rights on 50 additional E175s from Embraer.
SkyWest’s solid balance sheet increases financial flexibility. The company ended fourth-quarter 2025 with cash and marketable securities of $706.9 million, higher than the current debt level of $546.81 million. This implies that the company has sufficient cash to meet its current debt obligations. Meanwhile, long-term debt level has decreased to $1.84 billion (which translates into a debt-to-capitalization of 46.6%) at the end of fourth-quarter 2025 from $2.14 billion (which translates into a debt-to-capitalization of 52.6%) at fourth-quarter 2024-end.
Long-Term Debt to Capitalization
A strong balance sheet enables the company to reward shareholders with share repurchases. As a reflection of its shareholder-friendly stance, in May 2025, SKYW's existing repurchase plan was increased by $250 million. SkyWest repurchased 268,000 shares for $27 million during the fourth quarter of 2025. As of Dec. 31, 2025, SkyWest had $213 million available under its current share repurchase program. Buybacks not only reduce the total outstanding share count, thereby increasing earnings per share, but also signal management's belief in the intrinsic value of the stock.
What Do Earnings Estimates Say for SkyWest?
The positive sentiment surrounding SKYW stock is evident from the fact that the Zacks Consensus Estimate for full-year 2026 and 2027 earnings has been revised upward in the past 90 days. The consensus mark for second-quarter 2026 earnings has also been projected northward in the past 90 days.
The favorable estimate revisions indicate brokers’ confidence in the stock.
Time to Buy SKYW Stock
It is understood that SKYW stock is attractively valued, and an increase in flying contracts is contributing to SKYW’s top line. Fleet modernization techniquesand consistent shareholder-friendly initiatives act as other tailwinds. We believe that the positives surrounding the stock (as highlighted throughout the write-up) outweigh the concerns regarding macro-economic uncertainty, escalating operating expenses and pilot shortages (bothering regional carriers like SkyWest). We, therefore, suggest investors add SKYW stock to their portfolios for healthy returns. The company’s Zacks Rank #2 (Buy) further supports our thesis. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.