Allegiant Travel Company (ALGT) AI Stock Analysis

Compare

488 Followers

Top Page

Allegiant Travel Company

(NASDAQ:ALGT)

Rating:59Neutral

Price Target:

$61.00

▲(4.72%Upside)

Allegiant Travel Company's overall stock score is driven by a mix of strong operational performance and strategic adaptability against a backdrop of financial challenges. The company's earnings call and corporate events support a positive outlook, but financial and valuation concerns weigh on the score. Technical analysis suggests short-term bullish momentum, but the negative P/E ratio and high leverage remain risks.

Positive Factors

Fleet Expansion

Management is positive on benefits from increasing the number of MAX aircraft in the fleet and growing premium seat mix to drive better ancillary performance.

Market Recovery

The stock has rebounded significantly from its August lows, reflecting strong recovery momentum.

Revenue Growth

Revenue should benefit from growth in the Allegiant Extra product and regained functionality from the Navitaire cutover.

Negative Factors

Capacity Growth Challenges

ALGT stock dropped 15% largely driven by their surprising announcement to grow capacity significantly by year end, which flew in the face of the industry trend to prioritize RASM over growth-driven margin expansion.

Revenue and EPS Outlook

The 2Q unit revenue and EPS outlooks were below expectations.

Utilization Risks

There is risk that their plans to increase utilization do not pan out as intended and that RASM dilution may be worse than management expects.

Allegiant Travel Company (ALGT) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$1.06B

Dividend Yield1.03%

Average Volume (3M)441.86K

Price to Earnings (P/E)―

Beta (1Y)1.31

Revenue Growth1.54%

EPS Growth-466.46%

CountryUS

Employees6,057

SectorIndustrials

Sector Strength92

IndustryAirlines, Airports & Air Services

Share Statistics

EPS (TTM)1.81

Shares Outstanding18,254,744

10 Day Avg. Volume336,557

30 Day Avg. Volume441,857

Financial Highlights & Ratios

PEG Ratio<0.01

Price to Book (P/B)0.90

Price to Sales (P/S)0.00

P/FCF Ratio305.93

Enterprise Value/Market Cap2.69

Enterprise Value/Revenue0.29

Enterprise Value/Gross Profit9.42

Enterprise Value/Ebitda2.48

Forecast

1Y Price Target

$61.44

Price Target Upside5.48% Upside

Rating ConsensusHold

Number of Analyst Covering9

Allegiant Travel Company Business Overview & Revenue Model

Company DescriptionAllegiant Travel Company (ALGT) is a leisure-focused travel company that operates in the United States. Its core business includes scheduled and charter air transportation and it is known for offering low-cost flights primarily to smaller, underserved cities. Allegiant also provides travel-related services, such as hotel room bookings, rental car reservations, and other ancillary services to enhance the travel experience of its customers.

How the Company Makes MoneyAllegiant Travel Company makes money primarily through passenger ticket sales for its air transportation services, which constitute the bulk of its revenue. Additionally, Allegiant generates significant income from ancillary services, including baggage fees, seat selection fees, and onboard purchases. The company also earns revenue through commissions on hotel bookings, rental car reservations, and the sale of travel packages that combine flights with other travel services. Allegiant's strategy of serving underserved markets with limited competition allows it to maintain a solid pricing power, contributing to its profit margins. Partnerships with hotels, car rental agencies, and other travel-related businesses further bolster its revenue through commission-based arrangements.

Allegiant Travel Company Earnings Call Summary

Earnings Call Date:May 06, 2025

(Q1-2025)

% Change Since: 17.89%|

Next Earnings Date:Jul 30, 2025

Earnings Call Sentiment Neutral

Allegiant demonstrated strong operational performance and achieved significant milestones, such as record passenger numbers and improved operating margins. However, economic uncertainty and demand fluctuations led to strategic capacity adjustments and highlighted challenges, such as increased revenue pressure and a base closure. Despite these challenges, the company's strategic initiatives and adaptability have positioned it to navigate the current environment.

Q1-2025 Updates

Positive Updates

Record Passenger Numbers and High Completion Rate

Allegiant achieved a controllable completion rate of 99.9% on 32,000 departures, with over 4.4 million passengers flying, marking a first-quarter record.

Increase in Active Loyalty Cardholders

The number of active cardholders in Allegiant's loyalty program increased by nearly 7% year-over-year.

Improved Operating Margin

The airline reported an operating margin of 9.3% for the first quarter, up three percentage points from the previous year.

Sunseeker Resort Performance

Sunseeker's financial performance exceeded expectations with an EBITDA of $4.8 million, compared to a loss of $4.6 million the previous year.

Negative Updates

Economic Uncertainty Impacting Demand

Economic uncertainty weighed on consumer confidence, leading to a need to adjust capacity due to demand softness during shoulder and off-peak periods.

Second Quarter Revenue Pressure

Second quarter TRASM is expected to face greater year-over-year pressure than in the first quarter, with a mid-single-digit variance from expected revenue.

Strategic Base Closure

Closure of the Los Angeles base due to rising airport costs and to optimize network efficiency.

Capacity Reduction

Over 7.5 points of capacity were removed from May through August, with significant cuts to off-peak day flying.

Company Guidance

During Allegiant Travel Company's first quarter 2025 earnings call, several key metrics were highlighted, indicating strong company performance amidst economic challenges. The airline achieved a controllable completion rate of 99.9% across 32,000 departures, a 14% increase from the previous year, while flying a record 4.4 million passengers, 75% of whom were repeat customers. The airline's operating margin improved to 9.3%, up three percentage points from last year, within the initial guidance range. Allegiant's loyalty program saw a 7% year-over-year increase in active cardholders. Capacity increased by 14.2%, with aircraft utilization rising 19% to 7.5 hours per day. Ancillary revenue per passenger reached a record $79.28, a 5% year-over-year increase. Despite a challenging demand environment, Allegiant maintained a robust financial outlook, with total first-quarter airline revenue of $668 million, up 6% from the previous year. The airline's balance sheet remained strong, with $1.2 billion in liquidity and a net leverage ratio of 2.6. Allegiant's Sunseeker Resort also showed financial promise, with first-quarter EBITDA reaching $4.8 million, compared to a loss of $4.6 million in the previous year.

Allegiant Travel Company Financial Statement Overview

Summary

Allegiant Travel Company is experiencing financial turbulence with profitability challenges. Despite revenue growth, profitability metrics like net income are under stress. The company faces high leverage risks, but cash flow management is showing improvement.

Income Statement

Negative

The company has faced a challenging year with a negative net income and EBIT, reflecting operational difficulties. Despite a slight increase in total revenue, the significant decline in gross profit margin and negative net profit margin highlight profitability concerns. Historical comparisons show inconsistent performance, particularly in profitability metrics.

Balance Sheet

Neutral

The balance sheet reveals moderate financial stability with a substantial amount of debt. The debt-to-equity ratio is high, indicating potential leverage risks. However, the company maintains a reasonable equity ratio, showing some balance between liabilities and equity. The decline in stockholders' equity is a concern, reflecting potential risk in financial structure.

Cash Flow

Neutral

Cash flow from operations remains positive, indicating operational cash generation despite net losses. The transition from negative to positive free cash flow is a positive sign, though it remains modest. The operating cash flow to net income ratio is not favorable given the negative net income, but cash management shows improvement.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
2.51B	2.51B	2.30B	1.71B	990.07M
	Gross Profit
1.57B	664.37M	340.47M	231.54M	-4.34M
	EBIT
-239.98M	220.98M	-54.91M	98.06M	-146.75M
	EBITDA
60.86M	490.24M	305.57M	446.06M	-128.37M
	Net Income Common Stockholders
-240.24M	117.60M	2.49M	151.85M	-184.09M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
781.13M	814.67M	955.10M	1.18B	685.30M
	Total Assets
4.43B	4.87B	4.51B	3.99B	685.30M
	Total Debt
2.15B	2.36B	2.21B	1.88B	1.78B
	Net Debt
1.86B	2.22B	1.98B	1.51B	1.62B
	Total Liabilities
3.34B	3.54B	2.10B	2.77B	-14.10M
	Stockholders Equity
1.09B	1.33B	1.22B	1.22B	699.40M
Cash Flow		Free Cash Flow
38.30M	-447.39M	-131.64M	232.66M	-45.70M
	Operating Cash Flow
338.46M	423.09M	303.05M	488.20M	234.50M
	Investing Cash Flow
5.58M	-721.88M	-491.42M	-593.28M	-365.69M
	Financing Cash Flow
-201.30M	212.92M	33.12M	285.47M	164.60M

Allegiant Travel Company Technical Analysis

Technical Analysis Sentiment

Positive

Last Price58.25

Price Trends

50DMA

50.97

Positive

100DMA

65.29

Negative

200DMA

65.69

Negative

Market Momentum

MACD

1.30

Negative

RSI

59.15

Neutral

STOCH

75.54

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALGT, the sentiment is Positive. The current price of 58.25 is above the 20-day moving average (MA) of 55.65, above the 50-day MA of 50.97, and below the 200-day MA of 65.69, indicating a neutral trend. The MACD of 1.30 indicates Negative momentum. The RSI at 59.15 is Neutral, neither overbought nor oversold. The STOCH value of 75.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ALGT.

Allegiant Travel Company Risk Analysis

Allegiant Travel Company disclosed 30 risk factors in its most recent earnings report. Allegiant Travel Company reported the most risks in the “Production” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 1 New Risks

Our low-cost structure is one of our primary competitive advantages, and many factors could affect our ability to control our costs. Q4, 2024

Allegiant Travel Company Peers Comparison

Overall Rating

UnderperformOutperform

Sector (66)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SNCY	74 Outperform	$624.66M	12.01	9.46%	―	2.24%	-20.24%
Sector *	66 Neutral	$4.50B	12.28	5.32%	248.52%	4.13%	-12.36%
VLRS	65 Neutral	$564.02M	13.32	14.19%	―	-7.43%	-62.49%
ULCC	62 Neutral	$913.34M	13.56	12.71%	―	5.99%	―
ALGT	59 Neutral	$1.06B	―	-17.12%	1.03%	1.54%	-466.46%
JBLU	48 Neutral	$1.78B	―	-11.30%	―	-3.02%	66.90%
UP	47 Neutral	$1.06B	―	-2416.94%	―	-29.68%	95.14%

* Industrials Sector Average

Performance Comparison

ALGT

Allegiant Travel Company

58.25

5.15

9.70%

JBLU

JetBlue Airways

5.01

-0.58

-10.38%

VLRS

Controladora Vuela Compania de Aviacion SAB de CV

4.86

-2.25

-31.65%

Wheels Up Experience

1.51

-0.52

-25.62%

SNCY

Sun Country Airlines Holdings

11.74

1.13

10.65%

ULCC

Frontier Group Holdings

4.01

-1.43

-26.29%

Allegiant Travel Company Corporate Events

Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures

Allegiant Travel Appoints Tyler Hollingsworth as COO

Positive

May 6, 2025

Allegiant Travel Company announced the appointment of Tyler Hollingsworth as the chief operating officer, effective May 1, 2025, following his interim role since March 2025. Hollingsworth has been with the company since 2010, holding various leadership roles in flight operations and safety. The company also reported strong financial results for the first quarter of 2025, with a notable increase in operating margin and earnings per share despite economic uncertainties impacting the airline industry. Allegiant has adjusted its capacity growth plans to maintain profitability amid volatile demand, demonstrating resilience in challenging market conditions.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.