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SkyWest (SKYW)
NASDAQ:SKYW
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SkyWest
(NASDAQ:SKYW)
63Neutral
Positive Factors
Financial Performance
SkyWest reported another set of impressive results with EPS of $2.16 topping consensus estimates.
Future Growth Expectations
Management raised guidance for future EPS and expects higher than prior consensus estimates.
Revenue Growth
Revenue of $944mm was far ahead of analyst estimates and up 25.6% year-over-year.
Negative Factors
Block Hour Production
While increased pilot availability allows for higher asset utilization, there remains pressure to achieve significant growth in block hours.
Pilot Staffing
Pilot staffing continues to improve but may still pose challenges to reaching pre-COVID utilization levels.
SkyWest (SKYW) vs. S&P 500 (SPY)
Market Cap
$3.80B
Dividend YieldN/A
Average Volume (3M)548.58K
Price to Earnings (P/E)12.0
Beta (1Y)1.31
Revenue Growth20.18%
EPS Growth794.72%
CountryUS
Employees12,876
SectorIndustrials
Sector Strength70
IndustryAirlines, Airports & Air Services
Share Statistics
EPS (TTM)7.77
Shares Outstanding40,621,773
10 Day Avg. Volume656,489
30 Day Avg. Volume548,575
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)N/A
Price to Sales (P/S)1.04
Price to Cash Flow (P/CF)4.90
P/FCF Ratio4.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$124.00Price Target Upside32.88% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
SkyWest Business Overview & Revenue Model
Company DescriptionSkyWest, Inc., through its subsidiaries, operates a regional airline in the United States. The company operates through two segment, SkyWest Airlines and SkyWest Leasing. It also leases regional jet aircraft and spare engines to third parties. As of December 31, 2021, the company's fleet consisted of 629 aircraft; and provided scheduled passenger and air freight services with approximately 2,080 total daily departures to various destinations in the United States, Canada, Mexico, and the Caribbean. In addition, it offers airport customer and ground handling services for other airlines. SkyWest, Inc. was incorporated in 1972 and is headquartered in St. George, Utah.
How the Company Makes MoneySkyWest makes money primarily through its contractual relationships with major airlines, known as code-share agreements. Under these agreements, SkyWest operates flights on behalf of larger carriers, which provide a steady revenue stream through fixed-fee arrangements. The airline is compensated based on various factors such as the number of completed flights, block hours, and other performance metrics, rather than directly from ticket sales. Additionally, SkyWest Leasing generates income by leasing aircraft to its operating partners, contributing to the company's earnings. These partnerships and the leasing operations form the core of SkyWest's revenue model, allowing the company to focus on operational efficiency and fleet management.
SkyWest Financial Statement Overview
Summary
SkyWest showed strong financial recovery in 2024 with significant revenue and profit margin improvements. The reduction in leverage and better return on equity indicate improved financial management. However, the lack of total asset data and moderate EBIT margin suggest room for operational enhancements.Income Statement
SkyWest demonstrated a strong recovery with a significant increase in revenue from $2.93 billion in 2023 to $3.53 billion in 2024, indicating a revenue growth rate of 20.2%. The gross profit margin improved substantially from 12.7% to 58.5%, reflecting enhanced operational efficiency. The net profit margin also saw a remarkable improvement from 1.2% in 2023 to 9.2% in 2024, highlighting increased profitability. However, the EBIT margin, while improving from 3.5% to 14.0%, was still lower than pre-2020 levels. EBITDA margin increased from 18.9% to 19.9%, showing solid earnings before interest, taxes, depreciation, and amortization.75
Positive
Balance Sheet
The debt-to-equity ratio decreased from 1.46 in 2023 to 1.29 in 2024, indicating a reduction in leverage and improved financial stability. However, total assets were not available for 2024, making it difficult to analyze asset growth fully. Return on equity improved significantly to 13.4% from 1.6% in 2023, suggesting better returns on shareholder investments. Despite these positives, the absence of total asset data limits a full assessment of financial health.65
Positive
Cash Flow
Operating cash flow remained strong, though slightly decreasing from $736 million in 2023 to $692 million in 2024. Free cash flow improved substantially from $420 million to $692 million, indicating robust cash generation and better capital expenditure management. The free cash flow to net income ratio was positive, reflecting efficient cash conversion. However, the operating cash flow to net income ratio dropped, suggesting potential reinvestment needs or changes in working capital.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.53B | 2.94B | 3.00B | 2.71B | 2.13B | Gross Profit |
| 2.06B | 372.19M | 499.31M | 193.72M | -13.89M | EBIT |
| 494.66M | 104.07M | -174.89M | -81.87M | -359.11M | EBITDA |
| 930.36M | 554.35M | 627.10M | 377.99M | 238.27M | Net Income Common Stockholders |
| 322.96M | 34.34M | 72.95M | 111.91M | -8.52M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 801.63M | 835.22M | 1.05B | 860.41M | 825.91M | Total Assets |
| 7.14B | 7.03B | 7.41B | 7.13B | 6.89B | Total Debt |
| 2.76B | 3.09B | 3.54B | 3.35B | 3.49B | Net Debt |
| 2.53B | 2.94B | 3.44B | 3.09B | 3.28B | Total Liabilities |
| 4.73B | 4.91B | 5.07B | 4.86B | 4.75B | Stockholders Equity |
| 2.41B | 2.11B | 2.35B | 2.27B | 2.14B |
| Cash Flow | Free Cash Flow | |||
| 692.46M | 420.01M | -202.22M | 150.42M | 185.64M | Operating Cash Flow |
| 692.46M | 736.33M | 480.38M | 831.82M | 633.56M | Investing Cash Flow |
| -228.63M | -23.23M | -904.89M | -698.52M | -683.47M | Financing Cash Flow |
| -384.75M | -667.81M | 269.08M | -90.60M | 178.43M |
SkyWest Technical Analysis
Positive
93.32
Price Trends
102.43
Negative
104.95
Negative
93.09
Positive
Market Momentum
-2.47
Negative
48.61
Neutral
85.01
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SKYW, the sentiment is Positive. The current price of 93.32 is above the 20-day moving average (MA) of 90.20, below the 50-day MA of 102.43, and above the 200-day MA of 93.09, indicating a neutral trend. The MACD of -2.47 indicates Negative momentum. The RSI at 48.61 is Neutral, neither overbought nor oversold. The STOCH value of 85.01 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SKYW.
SkyWest Risk Analysis
SkyWest disclosed 41 risk factors in its most recent earnings report. SkyWest 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
SkyWest Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $26.26B | 8.37 | 28.63% | ― | 6.23% | 20.08% | |
68 Neutral | $6.60B | 17.63 | 9.31% | ― | 12.56% | 69.33% | |
67 Neutral | $20.55B | 46.19 | 4.50% | 2.08% | 5.34% | -6.20% | |
63 Neutral | $3.80B | 12.01 | 14.28% | ― | 20.18% | 794.72% | |
62 Neutral | $8.33B | 14.18 | 2.58% | 3.07% | 3.83% | -14.77% | |
50 Neutral | $1.03B | ― | -19.93% | 4.35% | 0.11% | -311.73% | |
47 Neutral | $1.91B | ― | -26.60% | ― | -3.50% | -148.99% |
* Industrials Sector Average
Performance Comparison
SKYW
SkyWest
93.32
24.24
35.09%
ALK
Alaska Air
53.81
10.82
25.17%
ALGT
Allegiant Travel Company
55.92
-18.50
-24.86%
JBLU
JetBlue Airways
5.33
-2.09
-28.17%
LUV
Southwest Airlines
34.39
5.88
20.62%
UAL
United Airlines Holdings
77.87
29.99
62.64%
SkyWest Earnings Call Summary
Earnings Call Date: Jan 30, 2025 | % Change Since: -20.08% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance, contract extensions, and improvements in pilot staffing, which are positive indicators for the company's future. However, the tragic aviation incident and ongoing maintenance challenges were significant concerns. Despite these challenges, the overall sentiment leans towards optimism due to robust financial results and growth strategies.Highlights
Strong Financial Performance
SkyWest reported a net income of $97 million for Q4 2024 and $323 million for the full year, with earnings per share of $2.34 and $7.77 respectively.
Increased Block Hour Production
The company anticipates a 12% increase in block hour production for 2025 compared to 2024, approaching pre-COVID utilization levels.
Contract Extensions and Fleet Growth
SkyWest extended its contract with American Airlines for 74 CRJ700s and announced it will have 278 total E-175s by the end of 2026.
Improved Pilot Staffing
Pilot staffing balance and outlook have improved, with measures ensuring long-term stabilization.
Strong Cash Flow and Debt Reduction
Generated over $500 million in free cash flow in 2024, repaid significant debt, and reduced leverage ratios to the lowest point in over a decade.
Recognition and Industry Leadership
SkyWest was named one of Fortune's World's Most Admired Companies for 2025, being the only regional airline on the list.
Lowlights
Tragic Aviation Incident
A military aircraft collided with an American Eagle aircraft, claiming the lives of all on board, impacting the aviation community.
Maintenance and MRO Challenges
SkyWest continues to face challenges in its third-party MRO network, including labor and parts shortages, impacting maintenance expenses.
Deferred Revenue Recognition
The company deferred $322 million of cumulative revenue, which will be recognized in future periods, affecting current financial results.
Company Guidance
During the SkyWest, Inc. Fourth Quarter and Full Year 2024 Results Call, the company provided several key metrics and guidance for the coming year. SkyWest reported a fourth-quarter net income of $97 million or $2.34 per diluted share, with a total annual net income of $323 million or $7.77 per diluted share. The total revenue for Q4 2024 was $944 million, up 26% from the same quarter in 2023, with contract revenue comprising $786 million. The company highlighted a 12% increase in block hour production expected for 2025, which would approach pre-COVID utilization levels. SkyWest plans to receive 16 new E175 aircraft by 2026, bringing the total to 278, and expects a 12% increase in block hours for 2025 compared to 2024. Additionally, SkyWest has extended its contract with American Airlines for 74 CRJ700s and completed agreements with United and Delta for CRJ550s. The company forecasts a 2025 Capital Expenditure of approximately $600 million, including the purchase of 8 new E-175s. SkyWest also plans to repay over $400 million in debt in 2025, aiming for an EPS of around $9 per share if its strategies are successfully executed.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.