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Here's Why Investors Should Buy Allegiant (ALGT) Stock Now
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Allegiant Travel Company (ALGT - Free Report) performed well in the past six months and has the potential to sustain the momentum. If you haven’t taken advantage of its share price appreciation yet, it’s time you add the stock to your portfolio.
Let’s take a look at the factors that make the stock an attractive pick.
An Outperformer: A glimpse at the company’s price trend reveals that its shares have surged 43.3% in the past six months compared with an 8.2% rise of the industry it belongs to.
Image Source: Zacks Investment Research
Solid Rank & VGM Score: Allegiant currently sports a Zacks Rank #1 (Strong Buy) and has a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best investment opportunities. Thus, the company seems to be an appropriate investment proposition at the moment.
Northward Estimate Revisions: Five estimates for 2023 moved north in the past 60 days versus no southward revision, reflecting analysts’ confidence in the company. The Zacks Consensus Estimate for 2023 earnings has moved up 42.4% in the past 60 days.
Positive Earnings Surprise History: Allegiant has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in two of the trailing four quarters (one miss and one meet), delivering an earnings surprise of 79.8%, on average.
Strong Growth Prospects: The Zacks Consensus Estimate for 2023 earnings is pegged at $9.14, which reflects year-over-year growth of 192%. Moreover, earnings are expected to register 28% growth in 2024.
Driving Factors: With air-travel demand rising in the United States, operating revenues improved 8.5% year over year in 2022. Management expects revenues to remain strong in 2023. In first-quarter 2023, operating revenues increased 29.9% on a year-over-year basis. Passenger revenues, which accounted for the bulk (93.7%) of the top line, increased around 31.3% on a year-over-year basis. Upbeat air travel demand can be correlated with such an increase. Riding on upbeat air-travel demand, ALGT has been reporting upbeat traffic numbers for the past few months.
ALGT has a strong cash position. Cash and cash equivalent of $317.6 million at the end of the first quarter of 2023 was higher than the current debt figure of $289.7 million. This implies that the company has enough cash to meet its debt burden.
Other Stocks to Consider
Some other top-ranked stocks for investors interested in the Zacks Transportation sector are Copa Holdings, S.A. (CPA - Free Report) and Triton International Limited .
Copa Holdings, which presently sports a Zacks Rank #1, is aided by improved air-travel demand. We are encouraged by the company’s initiatives to modernize its fleet. CPA's focus on its cargo segment is also impressive. You can seethe complete list of today’s Zacks #1 Rank stocks here.
For second-quarter and full-year 2023, CPA’s earnings are expected to register 765.6% and 75.4% growth, respectively, on a year-over-year basis.
Triton, currently carrying a Zacks Rank #2, benefits from its consistent efforts to reward its shareholders through dividends and share repurchases.
Triton has an impressive liquidity position. Its current ratio (a measure of liquidity) was 3.97 at the end of first-quarter 2023. A current ratio of more than 1 often indicates that the company will be easily paying off its short-term obligations.
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Here's Why Investors Should Buy Allegiant (ALGT) Stock Now
Allegiant Travel Company (ALGT - Free Report) performed well in the past six months and has the potential to sustain the momentum. If you haven’t taken advantage of its share price appreciation yet, it’s time you add the stock to your portfolio.
Let’s take a look at the factors that make the stock an attractive pick.
An Outperformer: A glimpse at the company’s price trend reveals that its shares have surged 43.3% in the past six months compared with an 8.2% rise of the industry it belongs to.
Image Source: Zacks Investment Research
Solid Rank & VGM Score: Allegiant currently sports a Zacks Rank #1 (Strong Buy) and has a VGM Score of A. Our research shows that stocks with a VGM Score of A or B, when combined with a Zacks Rank #1 or 2 (Buy), offer the best investment opportunities. Thus, the company seems to be an appropriate investment proposition at the moment.
Northward Estimate Revisions: Five estimates for 2023 moved north in the past 60 days versus no southward revision, reflecting analysts’ confidence in the company. The Zacks Consensus Estimate for 2023 earnings has moved up 42.4% in the past 60 days.
Positive Earnings Surprise History: Allegiant has an impressive earnings surprise history. The company outpaced the Zacks Consensus Estimate in two of the trailing four quarters (one miss and one meet), delivering an earnings surprise of 79.8%, on average.
Strong Growth Prospects: The Zacks Consensus Estimate for 2023 earnings is pegged at $9.14, which reflects year-over-year growth of 192%. Moreover, earnings are expected to register 28% growth in 2024.
Driving Factors: With air-travel demand rising in the United States, operating revenues improved 8.5% year over year in 2022. Management expects revenues to remain strong in 2023. In first-quarter 2023, operating revenues increased 29.9% on a year-over-year basis. Passenger revenues, which accounted for the bulk (93.7%) of the top line, increased around 31.3% on a year-over-year basis. Upbeat air travel demand can be correlated with such an increase. Riding on upbeat air-travel demand, ALGT has been reporting upbeat traffic numbers for the past few months.
ALGT has a strong cash position. Cash and cash equivalent of $317.6 million at the end of the first quarter of 2023 was higher than the current debt figure of $289.7 million. This implies that the company has enough cash to meet its debt burden.
Other Stocks to Consider
Some other top-ranked stocks for investors interested in the Zacks Transportation sector are Copa Holdings, S.A. (CPA - Free Report) and Triton International Limited .
Copa Holdings, which presently sports a Zacks Rank #1, is aided by improved air-travel demand. We are encouraged by the company’s initiatives to modernize its fleet. CPA's focus on its cargo segment is also impressive. You can see the complete list of today’s Zacks #1 Rank stocks here.
For second-quarter and full-year 2023, CPA’s earnings are expected to register 765.6% and 75.4% growth, respectively, on a year-over-year basis.
Triton, currently carrying a Zacks Rank #2, benefits from its consistent efforts to reward its shareholders through dividends and share repurchases.
Triton has an impressive liquidity position. Its current ratio (a measure of liquidity) was 3.97 at the end of first-quarter 2023. A current ratio of more than 1 often indicates that the company will be easily paying off its short-term obligations.