Azul SA (AZUL) AI Stock Analysis

• Market Cap: $148.19M
• Dividend Yield: N/A
• Average Volume (3M): N/A
• Price to Earnings (P/E): ―
• Beta (1Y): 0.43
• Revenue Growth: -5.34%
• EPS Growth: -125.18%
• Country: US
• Employees: 15,367
• Sector: Industrials
• Sector Strength: 84
• Industry: Airlines, Airports & Air Services
• EPS (TTM): -0.34
• Shares Outstanding: 298,679,930
• 10 Day Avg. Volume: N/A
• 30 Day Avg. Volume: N/A
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 41.97
• Enterprise Value/Revenue: 0.31
• Enterprise Value/Gross Profit: 0.99
• Enterprise Value/Ebitda: 1.19
• 1Y Price Target: $0.50
• Price Target Upside: -3.85% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 4

• Rating: 44 Neutral
• Price Target: $0.50 ▼(-3.85% Downside)

Azul's overall stock score is driven by financial vulnerability due to high leverage and ongoing losses. While operational improvements and revenue growth are positive, technical indicators and valuation concerns weigh heavily. Challenges from currency devaluation and operational disruptions further impact the outlook.

Positive Factors

Liquidity Improvement

Liquidity is expected to improve with actions taken to secure additional funding, including a government-guaranteed credit line.

Merger Potential

AZUL and Abra Group, the majority investor of Gol and Avianca, reached a non-binding MoU on a potential merger between GOL and AZUL.

Revenue Performance

Revenue and demand are tracking well, with operational, FX, and fuel trends moving in a favorable direction since March.

Negative Factors

BRL and Oil Risks

Analyst reiterates an Underperform rating as Azul offers an unattractive risk-return considering BRL/oil risks and a potential large dilution ahead.

Cost Pressures

Costs proved disappointing due to the impact of the Brazilian real’s depreciation against the U.S. dollar and a temporary increase in irregular operations.

Equity Dilution

Further dilution is now inevitable and shares cannot reflect the underlying fundamentals until the $200M optional equity raise is completed and the level of dilution is clear.

Azul SA Business Overview & Revenue Model

Company Description

Azul 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 Money

Azul 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 on a recovery path with revenue growth and operational improvements, but it still faces challenges with heavy losses, high leverage, and negative equity. Positive cash flow from operations provides some stability, but the overall financial situation is precarious due to reliance on debt and persistent net losses.

Income Statement

Azul SA has shown a significant increase in total revenue from 2020 to TTM 2025, indicating a strong recovery trajectory. However, the company continues to experience heavy losses, with a negative net income throughout the years, resulting in a negative net profit margin. The gross profit margin has improved, showcasing efficiency in cost management, but the EBIT and EBITDA margins reflect the ongoing struggle with operational profitability.

Balance Sheet

The balance sheet reflects high leverage with a debt-to-equity ratio that is uncomfortably high, compounded by negative stockholders' equity. This suggests financial instability and potential risk if market conditions worsen. The negative equity ratio highlights the company's extreme reliance on debt financing, which could pose a threat to financial sustainability.

Cash Flow

Cash flow from operations has been positive, indicating the company can generate cash from its core business activities. However, the high capital expenditures and negative free cash flow growth in recent years point to challenges in maintaining liquidity. The operating cash flow to net income ratio is robust, but the free cash flow to net income ratio remains a concern due to consistent net losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	20.24B	19.53B	18.55B	15.95B	9.98B	5.74B
Gross Profit	6.28B	5.15B	3.13B	3.17B	1.81B	-531.82M
EBITDA	5.24B	3.56B	4.62B	5.22B	566.33M	-6.55B
Net Income	-7.08B	-9.15B	-2.38B	-722.37M	-4.21B	-10.83B
Balance Sheet
Total Assets	25.55B	26.27B	20.53B	18.72B	18.53B	15.79B
Cash, Cash Equivalents and Short-Term Investments	1.60B	1.28B	1.90B	668.35M	3.08B	3.16B
Total Debt	35.88B	37.54B	26.34B	23.97B	24.91B	19.88B
Total Liabilities	54.00B	56.71B	41.86B	37.73B	36.87B	29.94B
Stockholders Equity	-28.45B	-30.44B	-21.33B	-19.01B	-18.33B	-14.15B
Cash Flow
Free Cash Flow	1.51B	1.53B	2.64B	1.18B	-934.90M	633.16M
Operating Cash Flow	2.54B	2.79B	3.44B	2.44B	-310.62M	976.23M
Investing Cash Flow	-1.37B	-1.57B	-874.48M	-639.85M	-684.89M	-403.83M
Financing Cash Flow	-2.04B	-1.92B	-1.39B	-4.20B	812.63M	933.51M

Azul SA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UAL	80 Outperform	$28.91B	8.95	27.70%	―	4.23%	13.13%
LTM	72 Outperform	$13.17B	11.24	161.29%	2.36%	5.64%	63.23%
Sector *	64 Neutral	$10.66B	16.26	6.50%	2.14%	2.69%	-21.81%
AAL	59 Neutral	$7.67B	14.94	-21.27%	―	1.50%	―
JBLU	51 Neutral	$1.57B	―	-15.12%	―	-1.90%	61.06%
LUV	49 Neutral	$15.56B	44.54	4.30%	2.48%	1.64%	284.24%
AZUL	44 Neutral	$148.19M	―	17.49%	―	-5.34%	-125.18%