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Azul SA (AZUL)
NYSE:AZUL
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Azul SA
(NYSE:AZUL)
46Neutral
Positive Factors
Merger Potential
A potential merger with GOL prompted an upgrade for AZUL shares.
Synergies
Synergies from the revenue side look feasible, as companies’ network would likely improve connectivity and generate higher income from passengers and the cargo businesses.
Negative Factors
Antitrust Approval
Antitrust approval seems challenging.
Equity Dilution
Significant dilution expected to current shareholders.
Macroeconomic Risks
Azul offering an unattractive risk-return considering macro risks associated with BRL and oil price.
Azul SA (AZUL) vs. S&P 500 (SPY)
Market Cap
$238.81M
Dividend YieldN/A
Average Volume (3M)8.25M
Price to Earnings (P/E)―
Beta (1Y)0.67
Revenue Growth-2.65%
EPS Growth-250.90%
CountryUS
Employees15,367
SectorIndustrials
Sector Strength82
IndustryAirlines, Airports & Air Services
Share Statistics
EPS (TTM)0.11
Shares Outstanding143,983,300
10 Day Avg. Volume22,999,071
30 Day Avg. Volume8,253,415
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$4.75Price Target Upside642.19% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Azul SA Business Overview & Revenue Model
Company DescriptionAzul S.A., together with its subsidiaries, provides passenger and cargo transportation services in Brazil. As of December 31, 2021, the company operated 850 daily departures to 125 destinations through a network of 259 non-stop routes with a fleet of 179 aircraft. It is also involved in the loyalty programs, travel packages, investment fund, logistics solutions, and aircraft financing activities. The company was incorporated in 2008 and is headquartered in Barueri, Brazil.
How the Company Makes MoneyAzul SA generates revenue primarily through the sale of airline tickets for passenger transportation, which constitutes the majority of its income. The company also makes money through cargo services, transporting goods and packages across its network. Additionally, Azul leverages ancillary services such as in-flight sales, seat selection fees, and loyalty programs to boost its earnings. Partnerships with other airlines and agreements with tourism and travel service providers further contribute to its revenue streams. These partnerships often result in code-sharing agreements and shared marketing initiatives, enhancing Azul's market presence and operational reach.
Azul SA Financial Statement Overview
Summary
Azul SA is experiencing revenue growth and operational efficiency, but faces significant profitability challenges due to large net losses. The balance sheet reflects high leverage and financial instability, while the cash flow statement shows strong operating cash flows but declining free cash flow.Income Statement
Azul SA has shown a significant increase in revenue over recent years, with a revenue growth rate of approximately 5.24% from 2023 to 2024. However, the company is struggling with profitability, as evidenced by a negative net profit margin of -46.88% in 2024, despite a relatively healthy gross profit margin of 26.38%. The EBIT margin stands at 17.36%, indicating operational efficiencies, but overall profitability is severely impacted by high net losses.―
Balance Sheet
The balance sheet reveals financial instability, characterized by a negative stockholders' equity of -30.44 billion in 2024, resulting in a concerning debt-to-equity ratio. The company's liabilities exceed its assets, and the equity ratio is negative, reflecting a highly leveraged financial structure that poses substantial risks to financial stability.30
Cash Flow
Azul SA demonstrates strong operational cash flow generation, with an operating cash flow to net income ratio of -0.30 in 2024, indicating that cash flow is being generated despite net losses. However, the free cash flow has decreased from the previous year, leading to a free cash flow growth rate of -42.04%. The free cash flow to net income ratio is -0.17, which shows challenges in converting net income into cash flow.―
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 19.53B | 18.55B | 15.95B | 9.98B | 5.74B | Gross Profit |
| 5.15B | 3.13B | 3.17B | 1.81B | -531.82M | EBIT |
| 3.39B | 1.66B | 1.43B | 54.80M | -1.40B | EBITDA |
| 3.56B | 4.62B | 5.22B | 566.33M | -6.55B | Net Income Common Stockholders |
| -9.15B | -2.38B | -722.37M | -4.21B | -10.83B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.28B | 1.90B | 668.35M | 3.08B | 3.16B | Total Assets |
| 26.27B | 20.53B | 18.72B | 18.53B | 15.79B | Total Debt |
| 37.54B | 26.34B | 23.97B | 24.91B | 19.88B | Net Debt |
| 36.33B | 24.44B | 23.30B | 21.84B | 16.82B | Total Liabilities |
| 56.71B | 41.86B | 37.73B | 36.87B | 29.94B | Stockholders Equity |
| -30.44B | -21.33B | -19.01B | -18.33B | -14.15B |
| Cash Flow | Free Cash Flow | |||
| 1.53B | 2.64B | 1.18B | -934.90M | 633.16M | Operating Cash Flow |
| 2.79B | 3.44B | 2.44B | -310.62M | 976.23M | Investing Cash Flow |
| -1.57B | -874.48M | -639.85M | -684.89M | -403.83M | Financing Cash Flow |
| -1.92B | -1.39B | -4.20B | 812.63M | 933.51M |
Azul SA Technical Analysis
Negative
0.64
Price Trends
1.47
Negative
1.73
Negative
2.43
Negative
Market Momentum
-0.26
Positive
22.41
Positive
19.14
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AZUL, the sentiment is Negative. The current price of 0.64 is below the 20-day moving average (MA) of 1.09, below the 50-day MA of 1.47, and below the 200-day MA of 2.43, indicating a bearish trend. The MACD of -0.26 indicates Positive momentum. The RSI at 22.41 is Positive, neither overbought nor oversold. The STOCH value of 19.14 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AZUL.
Azul SA Risk Analysis
Azul SA disclosed 65 risk factors in its most recent earnings report. Azul SA reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Azul SA Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $9.95B | 9.07 | 138.69% | 1.90% | 6.41% | 49.58% | |
76 Outperform | $24.01B | 6.70 | 33.57% | ― | 5.31% | 35.95% | |
64 Neutral | $4.30B | 11.84 | 5.23% | 249.82% | 4.06% | -10.21% | |
59 Neutral | $17.00B | 35.72 | 5.63% | 2.32% | 3.26% | 27.77% | |
58 Neutral | $6.88B | 12.04 | -21.27% | ― | 1.92% | 36.07% | |
46 Neutral | $238.81M | ― | 17.49% | ― | -2.65% | -250.90% | |
43 Neutral | $1.56B | ― | -11.30% | ― | -3.02% | 66.90% |
* Industrials Sector Average
Performance Comparison
AZUL
Azul SA
0.64
-5.69
-89.89%
JBLU
JetBlue Airways
4.88
-0.89
-15.42%
LUV
Southwest Airlines
31.18
4.46
16.69%
UAL
United Airlines Holdings
77.27
24.55
46.57%
AAL
American Airlines
11.11
-3.29
-22.85%
LTM
LATAM Airlines Group SA Sponsored ADR
33.43
8.71
35.23%
Azul SA Earnings Call Summary
Earnings Call Date:Feb 24, 2025
(Q4-2024)
| % Change Since: -64.84%|
Next Earnings Date:May 14, 2025
Earnings Call Sentiment Positive
Despite significant operational and financial challenges, Azul demonstrated strong revenue growth and strategic advancements. The successful capital restructuring and operational efficiencies position the company for future profitability, outweighing the lowlights.Q4-2024 Updates
Positive Updates
Record Revenue and Profitability
Azul reported a record revenue of BRL5.5 billion, up 10% year-over-year, with a strong RASK of BRL0.45. The company also achieved record quarterly EBITDA of BRL2 billion with a margin of 35.2% and EBIT of BRL1.2 billion.
Strategic Network and Capacity Growth
Azul’s unique network allows it to be the only carrier in 82% of its routes. The capacity increased by 11% year-over-year, with expectations for further revenue improvements as Porto Alegre fully reopened.
Diversification and Growth Beyond the Metal
Azul's high-margin business units' contribution to RASK grew to 23% in 4Q '24. The loyalty program now has over 18 million members, and the vacations business saw 63% growth in gross billings in 2024.
Operational Efficiency Improvements
Aircraft utilization increased by almost 13%, and productivity improved by 10% in terms of ASKs per FTE. The CASK was down 6.5% year-over-year.
Successful Capital Restructuring
Azul eliminated almost BRL8.5 billion in debt and raised $500 million of new capital, significantly improving liquidity and cash generation.
Negative Updates
Operational and Financial Challenges
Azul faced supply chain and engine challenges, resulting in over BRL1 billion in financial impact. Extreme weather and currency devaluation also posed significant challenges.
Currency Devaluation Impact
The Brazilian real experienced an 18% devaluation in the fourth quarter, which, along with inflation, added pressure on the company's cost structure.
Company Guidance
During Azul's fourth quarter earnings call for fiscal year 2024, the company provided robust guidance and disclosed record financial metrics. Azul reported a record revenue of BRL5.5 billion, representing a 10% year-over-year increase, and a record EBITDA of BRL2 billion with a 35.2% margin. The company maintained a strong RASK of BRL0.45, despite an 11% capacity growth and a 17% drop in fuel prices. The airline's EBIT reached BRL1.2 billion, reflecting its competitive advantages and low unit costs. Azul's diversification strategy, called "Beyond the Metal," contributed significantly, with high-margin business units impacting RASK and accounting for 24% of the 2024 EBITDA. The company's Elevate plan enhanced aircraft utilization by nearly 13% and improved productivity by 10%. For 2025, Azul reaffirmed its guidance, projecting a record EBITDA of BRL7.4 billion, driven by significant revenue growth and a strengthened capital structure after a comprehensive debt restructuring that eliminated BRL6.3 billion in debt and optimized cash generation.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.