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Here's Why Investors Should Avoid Hawaiian Holdings (HA) Now
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Hawaiian Holdings (HA - Free Report) faces financial instability due to high operating expenses and low liquidity. The strain on the company's bottom line is exacerbated by elevated labor and maintenance costs. Additionally, low liquidity impedes its ability to meet obligations, making it a less appealing option for investors' portfolios.
Let’s delve deeper.
Southward Earnings Estimate Revision: The Zacks Consensus Estimate for current-quarter earnings has been revised 22.6% downward over the past 90 days. For the current year, the consensus mark for earnings has moved 15% south in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.
Weak Zacks Rank: HA currently carries a Zacks Rank #4 (Sell).
Poor Price Performance: Hawaiian Holdings shares have declined 1.1% year to date against its industry’s 9.2% rise.
Image Source: Zacks Investment Research
Unimpressive Earnings Surprise History: The company has a discouraging track record with respect to the earnings surprise, having missed the Zacks Consensus Estimate in each of the trailing four quarters. The average miss is 12.2%.
Bearish Industry Rank: The industry to which Hawaiian Holdings belongs currently has a Zacks Industry Rank of 231 (out of 251). Such an unfavorable rank places it in the bottom 8% of Zacks Industries.Studies show that 50% of a stock price movement is directly related to the performance of the industry group it belongs to.
A mediocre stock within a strong group is likely to outclass a robust stock in a weak industry. Therefore, reckoning the industry’s performance becomes imperative.
Other Headwinds: The northward movement in operating expenses is adversely impacting Hawaiian Holdings’bottom line. This surge in operating expenses is primarily driven by the increase in labor costs and maintenance, materials and repairs.
In the second quarter of 2024,labor costs, comprising salaries and benefits (accounting for 33.2% of the total operating expenses), rose by 11.5% year over year to $237.68 million.
Rising fuel costs are also hindering Hawaiian Holdings’bottom line. This trend is primarily due to the ongoing production cuts adopted by Saudi Arabia and Russia. The fuel price per gallon is anticipated to be $2.71 for the third quarter of 2024 and also for the full year of 2024.
Stocks to Consider
Some better-ranked stocks for investors’ consideration in the Zacks Transportation sector include C.H. Robinson Worldwide (CHRW - Free Report) and Kirby Corporation (KEX - Free Report) .
The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average surprise of 7.3%. Shares of CHRW have risen 3.5% in the past year.
KEX holds a Zacks Rank #2 (Buy) at present and has an expected earnings growth rate of 40% for the current year.
The company has an encouraging track record with respect to the earnings surprise, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 8.7%. Shares of Kirby have climbed 40.9% in the past year.
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Here's Why Investors Should Avoid Hawaiian Holdings (HA) Now
Hawaiian Holdings (HA - Free Report) faces financial instability due to high operating expenses and low liquidity. The strain on the company's bottom line is exacerbated by elevated labor and maintenance costs. Additionally, low liquidity impedes its ability to meet obligations, making it a less appealing option for investors' portfolios.
Let’s delve deeper.
Southward Earnings Estimate Revision: The Zacks Consensus Estimate for current-quarter earnings has been revised 22.6% downward over the past 90 days. For the current year, the consensus mark for earnings has moved 15% south in the same time frame. The unfavorable estimate revisions indicate brokers’ lack of confidence in the stock.
Weak Zacks Rank: HA currently carries a Zacks Rank #4 (Sell).
Poor Price Performance: Hawaiian Holdings shares have declined 1.1% year to date against its industry’s 9.2% rise.
Image Source: Zacks Investment Research
Unimpressive Earnings Surprise History: The company has a discouraging track record with respect to the earnings surprise, having missed the Zacks Consensus Estimate in each of the trailing four quarters. The average miss is 12.2%.
Bearish Industry Rank: The industry to which Hawaiian Holdings belongs currently has a Zacks Industry Rank of 231 (out of 251). Such an unfavorable rank places it in the bottom 8% of Zacks Industries.Studies show that 50% of a stock price movement is directly related to the performance of the industry group it belongs to.
A mediocre stock within a strong group is likely to outclass a robust stock in a weak industry. Therefore, reckoning the industry’s performance becomes imperative.
Other Headwinds: The northward movement in operating expenses is adversely impacting Hawaiian Holdings’bottom line. This surge in operating expenses is primarily driven by the increase in labor costs and maintenance, materials and repairs.
In the second quarter of 2024,labor costs, comprising salaries and benefits (accounting for 33.2% of the total operating expenses), rose by 11.5% year over year to $237.68 million.
Rising fuel costs are also hindering Hawaiian Holdings’bottom line. This trend is primarily due to the ongoing production cuts adopted by Saudi Arabia and Russia. The fuel price per gallon is anticipated to be $2.71 for the third quarter of 2024 and also for the full year of 2024.
Stocks to Consider
Some better-ranked stocks for investors’ consideration in the Zacks Transportation sector include C.H. Robinson Worldwide (CHRW - Free Report) and Kirby Corporation (KEX - Free Report) .
C.H. Robinson Worldwide currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. CHRW has an expected earnings growth rate of 27.4% for the current year.
The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average surprise of 7.3%. Shares of CHRW have risen 3.5% in the past year.
KEX holds a Zacks Rank #2 (Buy) at present and has an expected earnings growth rate of 40% for the current year.
The company has an encouraging track record with respect to the earnings surprise, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 8.7%. Shares of Kirby have climbed 40.9% in the past year.