A month has gone by since the last earnings report for Allegiant Travel (ALGT). Shares have lost about 21.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Allegiant Travel due for a breakout? 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.
Allegiant has reported fourth-quarter 2024 earnings per share of $2.10, which surpassed the Zacks Consensus Estimate of $1.88. The company reported earnings of 11 cents per share in the year-ago quarter.
Operating revenues of $627.7 million surpassed the Zacks Consensus Estimate of $624.8 million and improved 2.7% on a year-over-year basis.
Passenger revenues, which accounted for the bulk (88.2%) of the top line, fell 0.4% on a year-over-year basis. Air traffic (measured in revenue passenger miles) for scheduled services dipped 2.2% year over year in the quarter under review. Capacity (measured in available seat miles or ASMs) grew 1.7% from the year-ago number. The load factor (percentage of seats filled by passengers) decreased to 80.2% in the reported quarter from 83.3% in the year-ago quarter, as traffic did not outperform capacity.
Operating costs per available seat miles, excluding fuel, fell 2.5% year over year to 8.29 cents. The average fuel cost per gallon (scheduled) decreased 22.2% year over year to $2.49. Total scheduled service passenger revenue per available seat miles fell to 13.01 cents from 13.16 cents a year ago.
As of Dec. 31, 2024, Allegiant’s total unrestricted cash and investments were $832.8 million compared with $804.6 million at the prior-quarter end. Long-term debt and finance lease obligations (net of current maturities and related costs) totaled $1.61 billion compared with $1.77 billion at the prior-quarter end.
For the first quarter of 2025, ASM (for scheduled service) is expected to increase 14% on a year-over-year basis. Total system ASM is projected to gain 13.5% on a year-over-year basis.
The operating margin is expected to be between 8% and 11%. Adjusted EPS (airline) is anticipated to be in the $1.75-$2.75 range. First-quarter adjusted consolidated EPS is expected to lie between $1.50 and $2.50. The fuel cost per gallon is suggested to be $2.60.
For 2025, ASM (for scheduled service) is expected to increase 17% on a year-over-year basis. Total system ASM is projected to rise 16% on a year-over-year basis.
Interest expenses are forecasted to be in the range of $130-$140 million. The fuel cost per gallon is suggested to be $2.60. The tax rate is expected to be 24%.
Under airline capex, aircraft-related capital expenditures are expected in the $285-$315 million band. Capitalized deferred heavy maintenance is anticipated to be between $85 million and $95 million. Other airline capital expenditures are expected to be between $115 and $135 million.
The company aims to expand its fleet size to 125 at the end of first-quarter 2025, 127 each at the end of second and third quarters and 122 at the end of fourth-quarter 2025.
It turns out, estimates revision have trended downward during the past month.
The consensus estimate has shifted -21.11% due to these changes.
At this time, Allegiant Travel has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
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 #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Allegiant Travel belongs to the Zacks Transportation - Airline industry. Another stock from the same industry, LATAM (LTM), has gained 6.9% over the past month. More than a month has passed since the company reported results for the quarter ended December 2024.
LATAM reported revenues of $3.34 billion in the last reported quarter, representing a year-over-year change of +3.9%. EPS of $0.90 for the same period compares with $0 a year ago.
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This article originally published on Zacks Investment Research (zacks.com).
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