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Allegiant Travel (ALGT) Down 7.9% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Allegiant Travel (ALGT - Free Report) . Shares have lost about 7.9% 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 its most recent earnings report in order to get a better handle on the important drivers.
Earnings Beat at Allegiant in Q4
Quarterly earnings per share came in at 11 cents against the Zacks Consensus Estimate’s loss of 67 cents. Operating revenues of $611 million outperformed the Zacks Consensus Estimate of $601.5 million but decreased marginally on a year-over-year basis.
Passenger revenues, which accounted for the bulk (91%) of the top line, fell 1.5% on a year-over-year basis. Air traffic (measured in revenue passenger miles) for scheduled service grew 3.2% year over year in the quarter under review. Capacity (measured in available seat miles or ASMs) rose 5.7% from the year-ago number. The load factor (percentage of seats filled by passengers) decreased to 83.3% from 85.3% in the reported quarter, as traffic did not outperform capacity.
Operating cost per available seat miles, excluding fuel, jumped 10.8% year over year to 8.50 cents. Average fuel cost per gallon (scheduled) decreased 10.6% to $3.20. Total scheduled service passenger revenue per available seat miles fell to 13.16 cents from 14.03 cents a year ago.
Liquidity
As of Dec 31, 2023, Allegiant’s total unrestricted cash and investments were $870.7 million compared with $1,007 million at the third-quarter end. Long-term debt and finance lease obligations (net of current maturities and related costs) totaled $1,819.7 million compared with $2,020 million at the prior-quarter end.
Guidance
For the first quarter of 2024, ASM (for scheduled service) is expected to increase 1% on a year-over-year basis. Total system ASM is projected to rise 1% on a year-over-year basis.
Operating margin is expected to be between 8% and 10%. EPS (airline) is anticipated to be in the range of $1.00-$2.00. Fuel cost per gallon is expected to be $2.85.
For 2024, ASM (for scheduled service) is expected to increase in the range of 2-6% on a year-over-year basis. Total system ASM is projected to rise 2-6% on a year-over-year basis.
Interest expenses are anticipated to be in the range of $140-$150 million.
Under airline capex, aircraft, engines, induction costs and pre-delivery deposits are expected to be in the $535-$555 million band. Capitalized deferred heavy maintenance is envisioned to be between $80 million and $90 million. Other airline capital expenditures are expected to be between $155 million and $165 million.
The company aims to expand its fleet size to 130 by 2024-end.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -32.25% due to these changes.
VGM Scores
At this time, Allegiant Travel has a poor Growth Score of F, a grade with the same score on the momentum front. However, 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 D. 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 belongs to the Zacks Transportation - Airline industry. Another stock from the same industry, Southwest Airlines (LUV - Free Report) , has gained 10.9% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Southwest reported revenues of $6.82 billion in the last reported quarter, representing a year-over-year change of +10.5%. EPS of $0.37 for the same period compares with -$0.38 a year ago.
For the current quarter, Southwest is expected to post a loss of $0.05 per share, indicating a change of +81.5% from the year-ago quarter. The Zacks Consensus Estimate has changed +42.3% over the last 30 days.
Southwest has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.
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Allegiant Travel (ALGT) Down 7.9% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Allegiant Travel (ALGT - Free Report) . Shares have lost about 7.9% 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 its most recent earnings report in order to get a better handle on the important drivers.
Earnings Beat at Allegiant in Q4
Quarterly earnings per share came in at 11 cents against the Zacks Consensus Estimate’s loss of 67 cents. Operating revenues of $611 million outperformed the Zacks Consensus Estimate of $601.5 million but decreased marginally on a year-over-year basis.
Passenger revenues, which accounted for the bulk (91%) of the top line, fell 1.5% on a year-over-year basis. Air traffic (measured in revenue passenger miles) for scheduled service grew 3.2% year over year in the quarter under review. Capacity (measured in available seat miles or ASMs) rose 5.7% from the year-ago number. The load factor (percentage of seats filled by passengers) decreased to 83.3% from 85.3% in the reported quarter, as traffic did not outperform capacity.
Operating cost per available seat miles, excluding fuel, jumped 10.8% year over year to 8.50 cents. Average fuel cost per gallon (scheduled) decreased 10.6% to $3.20. Total scheduled service passenger revenue per available seat miles fell to 13.16 cents from 14.03 cents a year ago.
Liquidity
As of Dec 31, 2023, Allegiant’s total unrestricted cash and investments were $870.7 million compared with $1,007 million at the third-quarter end. Long-term debt and finance lease obligations (net of current maturities and related costs) totaled $1,819.7 million compared with $2,020 million at the prior-quarter end.
Guidance
For the first quarter of 2024, ASM (for scheduled service) is expected to increase 1% on a year-over-year basis. Total system ASM is projected to rise 1% on a year-over-year basis.
Operating margin is expected to be between 8% and 10%. EPS (airline) is anticipated to be in the range of $1.00-$2.00. Fuel cost per gallon is expected to be $2.85.
For 2024, ASM (for scheduled service) is expected to increase in the range of 2-6% on a year-over-year basis. Total system ASM is projected to rise 2-6% on a year-over-year basis.
Interest expenses are anticipated to be in the range of $140-$150 million.
Under airline capex, aircraft, engines, induction costs and pre-delivery deposits are expected to be in the $535-$555 million band. Capitalized deferred heavy maintenance is envisioned to be between $80 million and $90 million. Other airline capital expenditures are expected to be between $155 million and $165 million.
The company aims to expand its fleet size to 130 by 2024-end.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -32.25% due to these changes.
VGM Scores
At this time, Allegiant Travel has a poor Growth Score of F, a grade with the same score on the momentum front. However, 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 D. 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 belongs to the Zacks Transportation - Airline industry. Another stock from the same industry, Southwest Airlines (LUV - Free Report) , has gained 10.9% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
Southwest reported revenues of $6.82 billion in the last reported quarter, representing a year-over-year change of +10.5%. EPS of $0.37 for the same period compares with -$0.38 a year ago.
For the current quarter, Southwest is expected to post a loss of $0.05 per share, indicating a change of +81.5% from the year-ago quarter. The Zacks Consensus Estimate has changed +42.3% over the last 30 days.
Southwest has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of A.