For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.

Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.

What if you'd invested in SkyWest (SKYW) ten years ago? It may not have been easy to hold on to SKYW for all that time, but if you did, how much would your investment be worth today?

SkyWest's Business In-Depth

With that in mind, let's take a look at SkyWest's main business drivers.

SkyWest, founded in 1972, is based in St. George, UT and operates as a regional airline in the United States through its subsidiary SkyWest Airlines.
SkyWest is also the holding company of an aircraft leasing company. In January 2019, SkyWest completed the sale of its erstwhile subsidiary, ExpressJet Airlines, to United Airlines joint venture — ManaAir LLC.

SkyWest Airlines offers high-quality regional service to airports located primarily in the Midwestern and Western United States as well as Mexico and Canada. The carrier primarily operates from Chicago (O’Hare), Denver, Houston, Los Angeles, Minneapolis, Phoenix, Salt Lake City, San Francisco and Seattle airports.

Offering scheduled regional airline service under code-share agreements (a deal between airlines allowing them to use each other’s codes on flights among other things) with its airline partners, forms the basis of the company’s operating model. On a daily basis, SkyWest is responsible for operating more than 2,100 flights to multiple destinations in North America.

SkyWest provides regional operations to its major airline partners under long-term, fixed-fee, code-share agreements. The company has codeshare agreements with key airline players like Delta Air Lines, American Airlines, United and Alaska Airlines.

The fixed-fee agreement with these companies obligate the respective major airline partner to refund the amount of fuel costs SkyWest incurs under those agreements.

Under the prorate agreements with Delta, United Airlines, and American Airlines, SkyWest is liable to cover the costs including fuel expenses of operating the concerned flights. Going by historical evidence, these multiple agreements consisting of a mix of fixed-fee and prorate flying arrangements should bolster the company’s operating results.

In 2023, 96.5% of the company's operating revenues of $3 billion came from flying agreements. The rest came from airport customer services and others.  As of December 31, 2023, SKYW had a total of 485 aircraft in scheduled service or under contract (which includes 237 E175s, 41 CRJ900s, 118 CRJ700s and 89 CRJ200s in its fleet).

Bottom Line

Putting together a successful investment portfolio takes a combination of research, patience, and a little bit of risk. For SkyWest, if you bought shares a decade ago, you're likely feeling really good about your investment today.

According to our calculations, a $1000 investment made in January 2015 would be worth $8,905.23, or a gain of 790.52%, as of January 15, 2025, and this return excludes dividends but includes price increases.

The S&P 500 rose 190.51% and the price of gold increased 109.40% over the same time frame in comparison.

Analysts are forecasting more upside for SKYW too.

Shares of SKYW have gained 100.8% in the past year, outperforming the 32.8% surge of the industry it belongs to. SKYW's shareholder-friendly approach through share buybacks boost investor confidence and positively impacts the company's bottom line. SkyWest's fleet-modernization efforts are commendable. SKYW has fleet-related agreements with other airline heavyweights like United Airlines and Alaska Airlines. By 2026-end, SKYW is scheduled to operate 278 E175 aircraft. On the flip side, higher operating expenses (due to an increase in employee compensation, which includes higher labor pay scales, increased maintenance as well as fuel costs) are hurting SKYW's bottom line. Considering all these factors, investors are advised to wait for a better entry point. For those who already own the stock, it will be prudent to stay invested.

Shares have gained 5.49% over the past four weeks and there have been 2 higher earnings estimate revisions for fiscal 2024 compared to none lower. The consensus estimate has moved up as well.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

SkyWest, Inc. (SKYW) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research