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Qantas Airways (QABSY)
OTHER OTC:QABSY
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Qantas Airways
(OTC:QABSY)
Rating:70Outperform
Price Target:
$38.00
▼(-3.23% Downside)
Positive Factors
Revenue Growth
Qantas' robust revenue growth post-pandemic indicates strong market demand and effective recovery strategies, enhancing its competitive position.
Cash Generation
Strong cash generation relative to profits suggests efficient operations and financial health, supporting future investments and debt management.
Profit Margins
Improved profit margins reflect effective cost management and pricing strategies, enhancing long-term profitability and shareholder value.
Negative Factors
High Leverage
High leverage poses financial stability risks, potentially limiting flexibility and increasing vulnerability to economic downturns.
Volatile Free Cash Flow
Volatility in free cash flow growth can hinder long-term planning and investment, affecting the company's ability to capitalize on growth opportunities.
Low Equity Levels
Low equity levels, despite high ROE, indicate reliance on debt financing, which may not be sustainable and could impact financial resilience.
Qantas Airways (QABSY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$11.79B
Dividend Yield1.2%
Average Volume (3M)1.59K
Price to Earnings (P/E)11.5
Beta (1Y)0.82
Revenue Growth7.09%
EPS Growth37.26%
CountryUS
Employees20,000
SectorIndustrials
Sector Strength71
IndustryAirlines, Airports & Air Services
Share Statistics
EPS (TTM)1.52
Shares Outstanding302,639,860
10 Day Avg. Volume0
30 Day Avg. Volume1,595
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 Cap1.23
Enterprise Value/Revenue0.67
Enterprise Value/Gross Profit3.30
Enterprise Value/Ebitda3.65
Forecast
1Y Price Target
$38.00Price Target Upside-3.23% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering0
Qantas Airways Business Overview & Revenue Model
Company DescriptionQantas Airways Limited provides air transportation services in Australia and internationally. The company operates through Qantas Domestic, Qantas International, Jetstar Group, and Qantas Loyalty segments. It offers passenger flying, and air cargo and express freight services; and customer loyalty recognition programs. As of June 30, 2022, the company operated a fleet of 322 aircraft under the Qantas and Jetstar brands. Qantas Airways Limited was founded in 1920 and is based in Mascot, Australia.
How the Company Makes MoneyQantas Airways makes money through several key revenue streams. The primary source of revenue is its passenger services, which include both domestic and international flights operated under Qantas and its low-cost carrier, Jetstar. Freight services contribute to its earnings through Qantas Freight, which provides air cargo services. Additionally, the Qantas Loyalty program, which includes the popular Frequent Flyer program, generates significant revenue by partnering with various businesses to offer points and rewards to customers. Ancillary services, such as in-flight sales, airport lounge access, and travel-related services, also contribute to the company's revenue. Strategic partnerships and alliances, such as those within the Oneworld alliance, play a crucial role in expanding Qantas' network and enhancing its service offerings, thus contributing to its overall profitability.
Qantas Airways Earnings Call Summary
Earnings Call Date:Aug 27, 2025
(Q4-2024)
| % Change Since: |
Next Earnings Date:Feb 19, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements in financial performance, fleet renewal, and operational improvements, particularly for Jetstar and Qantas Loyalty. However, these were offset by challenges in the international segment and increased statutory costs. Overall, the company remains optimistic about future growth and fleet investments.Q4-2024 Updates
Positive Updates
Strong Financial Performance
Qantas reported an underlying profit of $2.08 billion for FY 2024, with an underlying EPS of $0.88 per share, showcasing the strength of its dual airline brands and Qantas Loyalty.
Record Result for Jetstar
Jetstar achieved a record underlying EBIT of $497 million, up 23% from the previous year, driven by strong demand for low-fare travel and new fleet benefits.
Qantas Loyalty Growth
Qantas Loyalty achieved an underlying EBIT of $511 million, with total points earned and redeemed growing at double-digit rates. Memberships increased by 8%, and active members grew by 19%.
Fleet Renewal Progress
Investment in fleet renewal saw 16 aircraft join the fleet this year, with plans for over 40 new aircraft in the next two years, enhancing cash generation and customer experience.
Improved Operational Performance
On-time performance and customer satisfaction significantly improved, with Jetstar's on-time performance up by ten points and NPS increasing by 24 points for Qantas Domestic.
Negative Updates
Decline in Qantas International EBIT
Qantas International, including freight, recorded a decline in underlying EBIT to $556 million, affected by declining freight yields and market capacity restoration.
Statutory Profit Decrease
Statutory profit after tax fell to $1.25 billion, down $493 million from the previous year, due to one-off impacts from ACCC settlements and legal provisions.
Challenges with Same Job Same Pay Costs
The Same Job Same Pay policy is expected to add $60 million in costs for FY 2025, posing a challenge to mitigate these without immediate productivity offsets.
Company Guidance
In the Qantas Q4 2024 earnings call, the company reported an underlying profit of $2.08 billion and an underlying EPS of $0.88 per share. The statutory profit after tax was $1.25 billion, with notable investments including $230 million in customer improvements and $3.1 billion in capital expenditures, resulting in a group operating margin of 10.4%. Jetstar achieved a record underlying EBIT of $497 million, supported by the delivery of 13 new A321LRs. Qantas Domestic recorded an EBIT of $1.06 billion, while Qantas International, including freight, reported $556 million. The group's net debt stood at $4.1 billion, and they announced a $400 million share buyback. Looking forward, Qantas anticipates stable travel demand and aims for a 10% EBIT growth in its Loyalty segment, while projecting $400 million in transformation initiatives for FY '25 to offset inflationary pressures.Qantas Airways Financial Statement Overview
Summary
Qantas Airways is experiencing a strong recovery post-pandemic with impressive revenue growth and improved profitability. However, high leverage and reliance on debt pose financial stability risks. While cash flows are robust, free cash flow growth is volatile.Income Statement
Qantas Airways has shown a strong recovery in revenue and profit margins after the pandemic, with the gross profit margin improving to 53.0% and a positive net profit margin of 5.8%. The revenue growth rate has rebounded impressively over the past few years, notably from 2022 to 2023. However, the EBIT margin has declined to 8.7% in the latest period, indicating some pressure on operating efficiency.72
Positive
Balance Sheet
The balance sheet reflects high leverage with a debt-to-equity ratio of 22.81, indicating potential financial risk. While return on equity has improved to 434.6% due to reduced equity, this is unsustainable and a result of low equity levels. The equity ratio is also low at 1.4%, highlighting a reliance on debt financing.48
Neutral
Cash Flow
The cash flow statement shows positive trends, with robust operating cash flow to net income ratio of 2.67 and a significant free cash flow to net income ratio of 0.54, indicating strong cash generation relative to profits. However, free cash flow growth has been volatile, reflecting fluctuating capital expenditures.65
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 21.62B | 21.62B | 19.52B | 8.70B | 5.72B | 14.05B |
| Gross Profit | 4.39B | 11.46B | 10.97B | 4.52B | 3.33B | 7.64B |
| EBITDA | 3.97B | 3.90B | 4.52B | 928.00M | -176.00M | 1.66B |
| Net Income | 1.25B | 1.25B | 1.75B | -860.00M | -1.73B | -1.96B |
Balance Sheet | ||||||
| Total Assets | 20.56B | 20.56B | 20.35B | 19.65B | 17.88B | 20.03B |
| Cash, Cash Equivalents and Short-Term Investments | 1.98B | 1.98B | 3.17B | 3.98B | 2.40B | 3.74B |
| Total Debt | 6.59B | 6.59B | 6.73B | 7.23B | 8.23B | 8.54B |
| Total Liabilities | 20.27B | 20.27B | 20.34B | 19.84B | 17.36B | 18.50B |
| Stockholders Equity | 289.00M | 289.00M | 5.00M | -197.00M | 513.00M | 1.52B |
Cash Flow | ||||||
| Free Cash Flow | 680.00M | 680.00M | 2.49B | 1.75B | -1.15B | -514.00M |
| Operating Cash Flow | 3.35B | 3.44B | 5.05B | 2.65B | -407.00M | 1.03B |
| Investing Cash Flow | -2.80B | -2.89B | -2.59B | -240.00M | -722.00M | -1.57B |
| Financing Cash Flow | -2.01B | -2.01B | -2.63B | -1.31B | -181.00M | 1.85B |
Qantas Airways Technical Analysis
Positive
39.27
Price Trends
36.38
Positive
34.21
Positive
31.15
Positive
Market Momentum
0.80
Negative
64.76
Neutral
82.10
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For QABSY, the sentiment is Positive. The current price of 39.27 is above the 20-day moving average (MA) of 37.77, above the 50-day MA of 36.38, and above the 200-day MA of 31.15, indicating a bullish trend. The MACD of 0.80 indicates Negative momentum. The RSI at 64.76 is Neutral, neither overbought nor oversold. The STOCH value of 82.10 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for QABSY.
Qantas Airways Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $34.89B | 10.59 | 27.70% | ― | 4.23% | 13.13% | |
80 Outperform | $40.08B | 8.90 | 30.07% | 1.04% | 3.01% | -0.90% | |
72 Outperform | $14.10B | 12.70 | 161.29% | 2.12% | 5.64% | 63.23% | |
70 Outperform | $11.79B | 11.53 | 296.72% | 1.20% | 7.09% | 37.26% | |
66 Neutral | $8.54B | 16.41 | -21.27% | ― | 1.50% | ― | |
63 Neutral | $10.70B | 15.26 | 7.37% | 2.02% | 2.87% | -14.59% | |
58 Neutral | $16.34B | 46.78 | 4.30% | 2.31% | 1.64% | 284.24% |
* Industrials Sector Average
Performance Comparison
QABSY
Qantas Airways
39.27
17.21
78.01%
DAL
Delta Air Lines
61.39
17.63
40.29%
LUV
Southwest Airlines
31.11
2.94
10.44%
UAL
United Airlines Holdings
107.51
59.04
121.81%
AAL
American Airlines
12.82
2.05
19.03%
LTM
LATAM Airlines Group SA Sponsored ADR
47.69
24.07
101.91%
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.