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Copa Holdings (CPA)
NYSE:CPA
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Copa Holdings
(NYSE:CPA)
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Rating:81Outperform
Price Target:
$136.00
▲(15.47% Upside)
Copa Holdings scores highly due to its strong financial performance and attractive valuation. The company's robust operational efficiency and strategic fleet expansion further enhance its position. While technical indicators show positive momentum, challenges such as declining yields and increased costs are noted but do not significantly detract from the overall positive outlook.
Positive Factors
Operational Efficiency
Copa's high operational efficiency, demonstrated by top-tier on-time performance and flight completion rates, strengthens its competitive position and customer satisfaction, supporting long-term business sustainability.
Financial Flexibility
Strong cash reserves and low debt levels provide Copa with significant financial flexibility, enabling strategic investments and resilience against economic fluctuations, ensuring long-term stability.
Fleet Expansion
Expanding the fleet with modern aircraft enhances Copa's operational capacity and efficiency, supporting growth and competitive positioning in the airline industry over the long term.
Negative Factors
Declining Passenger Yields
Decreasing passenger yields and unit revenues could pressure Copa's profitability, challenging its ability to maintain margins and necessitating strategic adjustments to sustain long-term growth.
Increased Costs Excluding Fuel
Rising costs, excluding fuel, may impact Copa's cost efficiency and profitability, requiring ongoing cost management and operational adjustments to maintain competitive advantage.
Market Challenges in Central America
Weakness in the Central America market, due to external factors like visa issues, could limit Copa's growth prospects in this region, necessitating strategic market diversification to mitigate risks.
Copa Holdings (CPA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.78B
Dividend Yield5.47%
Average Volume (3M)335.25K
Price to Earnings (P/E)7.5
Beta (1Y)0.68
Revenue Growth-0.69%
EPS Growth-5.49%
CountryUS
Employees7,909
SectorIndustrials
Sector Strength72
IndustryAirlines, Airports & Air Services
Share Statistics
EPS (TTM)3.61
Shares Outstanding30,234,830
10 Day Avg. Volume283,008
30 Day Avg. Volume335,245
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap1.17
Enterprise Value/Revenue1.62
Enterprise Value/Gross Profit4.49
Enterprise Value/Ebitda5.42
Forecast
1Y Price Target
$148.67Price Target Upside26.23% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
Copa Holdings Business Overview & Revenue Model
Company DescriptionCopa Holdings, S.A., through its subsidiaries, provides airline passenger and cargo services. The company offers approximately 204 daily scheduled flights to 69 destinations in 29 countries in North, Central, and South America, as well as the Caribbean from its Panama City hub. As of December 31, 2021, it operated a fleet of 91 aircraft comprising 77 Boeing 737-Next Generation aircraft and 14 Boeing 737 MAX 9 aircraft. Copa Holdings, S.A. was founded in 1947 and is based in Panama City, Panama.
How the Company Makes MoneyCopa Holdings generates revenue primarily through the sale of passenger tickets and cargo services. The company's revenue model is based on a combination of passenger fare income, ancillary services, and cargo transportation fees. Key revenue streams include ticket sales from domestic and international flights, which account for the majority of the company's earnings, as well as additional revenue from baggage fees, in-flight services, and partnerships with travel agencies and corporate clients. Furthermore, Copa Airlines benefits from strategic alliances with other airlines, enhancing its connectivity and enabling code-sharing agreements that broaden its market reach and generate incremental revenue.
Copa Holdings Earnings Call Summary
Earnings Call Date:Aug 06, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 12, 2025
Earnings Call Sentiment Positive
Copa Holdings reported strong financial and operational performance, with robust margins, fleet expansion, and industry recognition. However, challenges such as declining yields, increased costs excluding fuel, and weakness in specific markets like Central America were noted.Q2-2025 Updates
Positive Updates
Strong Financial Performance
Copa Holdings reported a 21% operating margin and a 17.7% net margin, among the best in the industry. Net profit was $149 million, or $3.61 per share, representing a 25% year-over-year increase.
Operational Excellence
Copa Airlines achieved a world-leading on-time performance of 91.5% and a flight completion factor of 99.8%.
Fleet Expansion
The company took delivery of 3 Boeing 737 MAX-8 aircraft, bringing the total fleet to 115 aircraft, with plans to expand to 125 by year's end. Financing for all 2025 deliveries has been secured.
Financial Flexibility
Copa Holdings ended the quarter with $1.4 billion in cash, representing 39% of the last 12-month revenue, and an industry-leading adjusted net debt-to-EBITDA ratio of 0.6x.
Recognition and Awards
Copa was recognized by Skytrax for the 10th consecutive year as the Best Airline in Central America and the Caribbean.
Negative Updates
Passenger Yield and Revenue Decline
Passenger yields decreased by 4.1% year-over-year, and unit revenues (RASM) declined by 2.8% to $0.107.
Increased Costs Excluding Fuel
CASM, excluding fuel, increased by 3.2% to $0.058, mainly due to nonrecurring benefits recorded in the second quarter of 2024.
Challenges in Central America Market
The Central America to U.S. market is currently weak, impacted by visa issues and increased capacity in the region.
Company Guidance
In the Copa Holdings Second Quarter Earnings Call, the company reported strong financial performance with a 21% operating margin and a 17.7% net margin. Capacity grew by 5.8% year-over-year, achieving a load factor of 87.3%, up 0.5 percentage points from Q2 2024. Despite a 4.1% decrease in passenger yields and a 2.8% decline in unit revenues (RASM) to $0.107, unit costs (CASM) fell by 4.6% to $0.085. CASM excluding fuel increased by 3.2% to $0.058. Copa maintained high operational efficiency with a 91.5% on-time performance and a 99.8% flight completion factor. Financially, Copa ended the quarter with $1.4 billion in cash, short-term, and long-term investments, representing 39% of the last 12-month revenue, and an adjusted net debt-to-EBITDA ratio of 0.6x. The company reaffirmed its full-year operating margin guidance of 21% to 23% and anticipated capacity growth of 7% to 8% year-over-year.Copa Holdings Financial Statement Overview
Summary
Copa Holdings demonstrates solid financial health with strong profitability, stable financial leverage, and robust cash flow generation. The company has rebounded effectively from previous years' challenges, positioning itself well for future growth and stability.Income Statement
Copa Holdings shows strong profitability with a consistent Gross Profit Margin of around 37% in TTM, indicating efficient cost management. The Net Profit Margin has improved significantly over the years, reaching about 17.7% in TTM, reflecting effective operational strategies. Revenue growth is stable, with minor fluctuations, and EBIT and EBITDA margins are healthy at 21.8% and 27.5% respectively, demonstrating robust operational performance.85
Very Positive
Balance Sheet
The company maintains a solid financial position, evidenced by a debt-to-equity ratio of 0.78 in TTM, indicating prudent financial leverage. The Return on Equity is impressive at 24.5%, showcasing strong profitability relative to shareholder equity. The equity ratio stands at 43.2%, reflecting a strong equity base. Overall, the balance sheet is stable with a healthy mix of debt and equity financing.80
Positive
Cash Flow
Copa Holdings exhibits strong cash flow management, with a significant Operating Cash Flow to Net Income Ratio of 1.6, suggesting excellent cash conversion efficiency. The Free Cash Flow to Net Income Ratio is also strong at 1.6, indicating effective use of capital. Free Cash Flow has grown substantially, reflecting improved cash generation capabilities.78
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.45B | 3.45B | 3.46B | 2.97B | 1.51B | 801.00M |
| Gross Profit | 1.24B | 1.23B | 1.27B | 1.07B | 550.06M | -229.00M |
| EBITDA | 1.03B | 1.12B | 1.08B | 741.68M | 370.51M | -298.40M |
| Net Income | 609.23M | 608.53M | 514.10M | 348.05M | 43.84M | -598.61M |
Balance Sheet | ||||||
| Total Assets | 5.75B | 5.74B | 5.20B | 4.69B | 4.25B | 3.85B |
| Cash, Cash Equivalents and Short-Term Investments | 916.35M | 1.20B | 915.18M | 934.75M | 1.02B | 889.88M |
| Total Debt | 1.94B | 2.00B | 1.75B | 1.68B | 1.60B | 1.39B |
| Total Liabilities | 3.27B | 3.37B | 3.07B | 3.20B | 2.95B | 2.57B |
| Stockholders Equity | 2.48B | 2.37B | 2.12B | 1.49B | 1.30B | 1.28B |
Cash Flow | ||||||
| Free Cash Flow | 974.21M | 340.51M | 214.91M | 90.26M | -32.71M | -100.00M |
| Operating Cash Flow | 1.00B | 996.85M | 1.04B | 740.95M | 462.61M | -39.52M |
| Investing Cash Flow | -782.86M | -343.14M | -543.00M | -555.91M | -373.04M | -93.76M |
| Financing Cash Flow | -197.05M | -219.65M | -394.03M | -273.69M | 2.44M | 93.61M |
Copa Holdings Technical Analysis
Positive
117.78
Price Trends
112.83
Positive
107.17
Positive
97.37
Positive
Market Momentum
1.11
Positive
57.07
Neutral
53.35
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CPA, the sentiment is Positive. The current price of 117.78 is above the 20-day moving average (MA) of 116.12, above the 50-day MA of 112.83, and above the 200-day MA of 97.37, indicating a bullish trend. The MACD of 1.11 indicates Positive momentum. The RSI at 57.07 is Neutral, neither overbought nor oversold. The STOCH value of 53.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CPA.
Copa Holdings Risk Analysis
Copa Holdings disclosed 50 risk factors in its most recent earnings report. Copa Holdings 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
Copa Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $4.78B | 7.52 | 26.60% | 5.47% | -0.69% | -5.49% | |
68 Neutral | 6.74B | 23.77 | 7.94% | ― | 27.81% | 43.03% | |
61 Neutral | 16.87B | 47.47 | 4.90% | 2.24% | 1.64% | 284.24% | |
58 Neutral | 8.23B | 16.05 | -14.65% | ― | 1.50% | 0.00% | |
50 Neutral | 1.84B | -4.65 | -16.03% | ― | -1.90% | 61.06% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
Performance Comparison
CPA
Copa Holdings
117.78
33.01
38.94%
ALK
Alaska Air
58.49
18.73
47.11%
ALGT
Allegiant Travel Company
62.06
19.22
44.86%
JBLU
JetBlue Airways
5.07
-0.65
-11.36%
SKYW
SkyWest
103.63
23.62
29.52%
ULCC
Frontier Group Holdings
5.42
1.03
23.46%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.