Yahoo Finance Why Is Allegiant Travel (ALGT) Up 1% Since Last Earnings Report?
It has been about a month since the last earnings report for Allegiant Travel (ALGT). Shares have added about 1% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Allegiant Travel due for a pullback? 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 catalysts.
Earnings Beat at Allegiant in Q1
Quarterly earnings per share of 57 cents beat Zacks Consensus Estimate of 51 cents but declined 81.3% year over year. Operating revenues of $656.4 million outperformed the Zacks Consensus Estimate of $648.4 million and increased 1% on a year-over-year basis.
Passenger revenues, which accounted for the bulk (88%) of the top line, fell 4.8% on a year-over-year basis. Air traffic (measured in revenue passenger miles) for scheduled service fell 1.1% year over year in the quarter under review. Capacity (measured in available seat miles or ASMs) grew 1.4% from the year-ago number. Load factor (percentage of seats filled by passengers) inched down to 83.8% from 85.8% in the reported quarter, as traffic did not outperform capacity.
Operating cost per available seat miles, excluding fuel, jumped 14.5% year over year to 8.87 cents. Average fuel cost per gallon (scheduled) decreased 12% to $3.01. Total scheduled service passenger revenue per available seat miles fell to 13.23 cents from 13.89 cents a year ago.
Liquidity
As of Mar 31, 2024, Allegiant’s total unrestricted cash and investments were $853.7 million compared with $870.7 million at the fourth-quarter end. Long-term debt and finance lease obligations (net of current maturities and related costs) totaled $1,789.6 million compared with $1,819.7 million at the prior-quarter end.
Guidance
For second-quarter 2024, ASM (for scheduled service) is expected to decrease 1% on a year-over-year basis. Total system ASM is projected to decline 1% on a year-over-year basis.
Operating margin is expected to be between 7% and 9%. EPS (airline) is anticipated to be in the $1.25-$1.75 range. Fuel cost per gallon is suggested to be $2.90.
For 2024, ASM (for scheduled service) is now expected to increase 2-4% on a year-over-year basis (prior view: up 2-6%). Total system ASM is now projected to increase 2-4% on a year-over-year basis (prior view: up 2-6%).
Interest expenses are now forecasted to be in the range of $135-$145 million (prior view: $140-$150 million).
Under airline capex, aircraft, engines, induction costs and pre-delivery deposits are now expected to be in the $230-$250 millionband(prior view: $535-$555 million). Capitalized deferred heavy maintenance is still envisioned to be between $80 million and $90 million. Other airline capital expenditures are expected to be between $160 and $170million (prior view: $155 - $165 million).
The company aims to expand its fleet size to 126 at the end of 2024 (prior view: 130).
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
The consensus estimate has shifted -53.83% due to these changes.
VGM Scores
At this time, Allegiant Travel has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Allegiant Travel has a Zacks Rank #3 (Hold). We expect an in-line 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, Southwest Airlines (LUV), a stock from the same industry, has gained 4.7%. The company reported its results for the quarter ended March 2024 more than a month ago.
Southwest reported revenues of $6.33 billion in the last reported quarter, representing a year-over-year change of +10.9%. EPS of -$0.36 for the same period compares with -$0.27 a year ago.
For the current quarter, Southwest is expected to post earnings of $0.51 per share, indicating a change of -53.2% from the year-ago quarter. The Zacks Consensus Estimate has changed -2.3% over the last 30 days.
Southwest has a Zacks Rank #5 (Strong Sell) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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