Education
About Us
Working with TipRanks
Follow Us
SkyWest (SKYW)
NASDAQ:SKYW
Top Page
SkyWest
(NASDAQ:SKYW)
Select Model
Select Model
Rating:69Neutral
Price Target:
$111.00
▲(15.00% Upside)
The score is driven mainly by solid fundamentals (strong margins, improving leverage, and growing free cash flow) and an attractive earnings valuation (P/E ~9.7). These positives are tempered by mixed technicals (below the 200-day and negative MACD) and earnings-call noted near-term pressures from seasonality and elevated maintenance/MRO costs despite constructive 2026 guidance.
Positive Factors
Free Cash Flow Generation
Consistent, sizable free cash flow across 2024–2025 provides durable funding for fleet investment, debt reduction, and share repurchases. Strong cash generation supports capital allocation flexibility and resilience through industry cycles over the next several quarters.
Improved Leverage & Balance Sheet
Material debt reduction and meaningful unencumbered equipment increase financial flexibility and reduce interest burden. Stronger balance sheet supports ongoing capex, fleet commitments and opportunistic buybacks while lowering default and refinancing risk over the medium term.
Secured Fleet Commitments & Contracts
Long‑term contract extensions and a large E175 orderbook anchor future revenue and capacity growth. Firm commitments with major carriers reduce fleet deployment risk, support predictable cash flows and strengthen competitive positioning in regional markets over coming years.
Negative Factors
Elevated Maintenance & MRO Pressures
Sustained third‑party MRO shortages and the heavy workload to return stored aircraft raise recurring maintenance costs and operational complexity. Higher maintenance expense can compress margins and cash flow for multiple quarters as aircraft are reactivated and third‑party capacity normalizes.
Concentration on Capacity Purchase Agreements
Dependence on a handful of large airline partners concentrates counterparty and contract renewal risk. Changes in partner capacity needs, pricing, or contract terms could materially affect revenue and utilization dynamics across several quarters.
Fleet Return Timing Offsets Growth
Incoming returns of less‑efficient CRJ900s will offset some E175 growth, complicating capacity mix and yield improvement. Managing reactivations and retired fleet timing can depress unit economics and utilization for multiple quarters as the fleet transition occurs.
SkyWest (SKYW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.87B
Dividend YieldN/A
Average Volume (3M)237.84K
Price to Earnings (P/E)9.3
Beta (1Y)1.05
Revenue Growth19.27%
EPS Growth78.26%
CountryUS
Employees12,876
SectorIndustrials
Sector Strength72
IndustryAirlines, Airports & Air Services
Share Statistics
EPS (TTM)2.21
Shares Outstanding40,103,900
10 Day Avg. Volume269,154
30 Day Avg. Volume237,842
Financial Highlights & Ratios
PEG Ratio0.01
Price to Book (P/B)1.67
Price to Sales (P/S)1.14
P/FCF Ratio11.07
Enterprise Value/Market Cap1.01
Enterprise Value/Revenue0.98
Enterprise Value/Gross Profit4.09
Enterprise Value/Ebitda3.92
Forecast
1Y Price Target
$128.50Price Target Upside33.13% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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 generates revenue primarily through its capacity purchase agreements with major airlines, where it operates regional flights on behalf of these partners. Under these agreements, SkyWest is reimbursed for operating expenses and receives a fee per flight, which provides a stable and predictable revenue stream. Additionally, the company earns revenue from ticket sales for flights operated under its own brand, as well as ancillary services such as baggage fees and in-flight sales. The company benefits from its strategic partnerships with major airlines, which enhance its market reach and allow it to leverage the existing networks of these airlines to fill seats, thus driving profitability.
SkyWest Key Performance Indicators (KPIs)
Any
Total Aircraft in Service or Under Contract
Indicates fleet size and capacity, reflecting the company's operational scale and ability to meet demand.
Indicates fleet size and capacity, reflecting the company's operational scale and ability to meet demand.
Data provided by:
The Fly
The FlySkyWest Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Positive
The call presented multiple strong financial and operational wins — notable profit growth (31% pretax increase), robust EBITDA, meaningful free cash flow, significant debt reduction, active share buybacks, and major E175 contract extensions and orderbook expansion — while acknowledging near-term headwinds from a government shutdown impact, elevated maintenance/MRO pressures, sharper seasonality (Q1 EPS pressure), and the workload of returning parked aircraft to service. On balance, the company’s durable cash generation, strengthened balance sheet, fleet commitments, and demonstrated operating leverage outweigh the near-term challenges.Q4-2025 Updates
Positive Updates
Strong Full-Year Profitability
2025 net income of $428 million or $10.35 per diluted share; Q4 GAAP net income of $91 million or $2.21 per diluted share; Q4 pretax income $125 million and full-year pretax income $506 million, up 31% year-over-year.
Production Growth and Operating Leverage
Full-year block hours increased 15% versus 2024 and the model converted that production growth into a 31% increase in pretax income, demonstrating strong operating leverage.
Improved EBITDA and Cash Generation
2025 EBITDA of $982 million (up over $100 million versus 2024) and free cash flow of over $400 million for 2025; nearly $1 billion in free cash flow generated over the last two years.
Debt Reduction and Balance Sheet Strengthening
Repaid $492 million of debt in 2025; total debt down to $2.4 billion from $2.7 billion at 12/31/2024 (roughly a 10% reduction year-over-year); total debt ~$1 billion lower than end of 2022; unencumbered equipment of approximately $1.5 billion.
Share Repurchase Activity
Share repurchases of $85 million in 2025 (nearly 850,000 shares, a 50% increase in shares repurchased versus 2024); Q4 repurchases of 268,000 shares for $27 million; $213 million remaining under current authorization.
Fleet Commitments and Contract Extensions
Multiyear extensions for 40 E175s with United and 13 E175s with Delta; no major E175 contract expirations until late 2028; firm order for 69 E175s (25 allocated to majors, 44 unassigned); expect nearly 300 E175s by 2028.
Planned Capacity and CapEx
Expect mid-single-digit percentage growth in block hours for 2026 and anticipated full-year EPS in the mid-$11 area; anticipate 9 E175 deliveries in 2026 and approximately $600–$625 million in total CapEx for 2026 (roughly flat with 2025).
Operational Performance
Achieved more than 250 days of 100% controllable completion in 2025, regularly ran over 2,500 daily scheduled departures, and continue strong completion and reliability metrics versus peers.
Negative Updates
Government Shutdown Impact
Mandated flight cancellations from the November government shutdown reduced Q4 results by approximately $7 million (about $0.13 per share), including roughly 2,000 cancelled flights and 3,000 cancelled block hours.
Seasonality and Near-Term EPS Pressure
Management expects sharper seasonality in 2026 with Q1 EPS flat to down versus Q4 2025, reflecting return to pre-COVID seasonality and strong summer concentration of production.
Elevated Maintenance Costs and MRO Challenges
Ongoing third-party MRO network challenges (labor and parts) elevated maintenance expense; bringing aircraft out of long-term storage increases near-term maintenance spend and maintenance expense expected to remain at 2025 levels into 2026.
Cash Balance Decline
Ending Q4 cash of $707 million, down from $802 million a year earlier and from $753 million in Q3 2025, reflecting debt repayments, CapEx ($214 million in Q4) and share repurchases.
Deferred Revenue Recognition Changes
Q4 included recognition of $5 million in previously deferred revenue (down from $17 million in Q3 2025 and $20 million in Q4 2024); $265 million of cumulative deferred revenue remains to be recognized, and recent contract extensions pushed some recognition timing.
Parked Aircraft & Fleet Re-entry Workload
Approximately 20 parked dual-class CRJ aircraft and over 40 parked CRJ200s require heavy maintenance/return-to-service; this creates near-term operational and maintenance workload and expense before these aircraft generate revenue.
Offsetting Fleet Returns
Return of 19 Delta-owned CRJ900s over the next couple years will partially offset growth from new deliveries, though returns are expected at a slower cadence than previously anticipated.
Company Guidance
SkyWest’s 2026 guidance calls for mid‑single‑digit block‑hour growth versus 2025 and full‑year EPS in the mid‑$11s (Q1 EPS expected flat‑to‑down versus Q4 2025 GAAP EPS of $2.21, with Q2 and Q3 the strongest quarters); an effective tax rate of ~24% (lower in Q1) and maintenance expense roughly in line with 2025. Management expects nine E175 deliveries in 2026, to place 23 CRJ‑550s into service, to redeploy ~20 parked dual‑class CRJs (and has over 40 parked CRJ200s available), and projects the E175 fleet to approach nearly 300 by 2028. Capital spending is forecast at $600–625 million in 2026 (about flat with ~ $580 million in 2025), there is $265 million of deferred revenue remaining (modeling recognition roughly $20–25 million per quarter), and the company intends to continue debt reduction while funding fleet investment and opportunistic share repurchases.SkyWest Financial Statement Overview
Summary
Profitability is solid (TTM gross margin 34.16%, net margin 10.92%) with positive revenue growth (TTM +3.57%). Leverage has improved materially (debt-to-equity down to 0.23) and free cash flow growth is strong (TTM +28.19%), though cash conversion/retention is a bit weaker (OCF/NI 0.40; FCF/NI 0.27).Income Statement
SkyWest's income statement shows a solid performance with a notable improvement in gross profit margin and net profit margin over the years. The TTM data indicates a gross profit margin of 34.16% and a net profit margin of 10.92%, reflecting strong profitability. Revenue growth has been positive, with a 3.57% increase in the TTM period, indicating a recovery trend. EBIT and EBITDA margins are also healthy, suggesting efficient operations.75
Positive
Balance Sheet
The balance sheet reveals a significant reduction in debt-to-equity ratio from 1.63 in 2020 to 0.23 in the TTM period, indicating improved financial leverage. Return on equity has increased to 17.14% in the TTM period, showcasing enhanced profitability for shareholders. However, the equity ratio remains moderate, suggesting a balanced approach to financing.65
Positive
Cash Flow
SkyWest's cash flow statement highlights a robust free cash flow growth of 28.19% in the TTM period, demonstrating strong cash generation capabilities. The operating cash flow to net income ratio is 0.40, indicating efficient cash conversion. However, the free cash flow to net income ratio is relatively lower at 0.27, suggesting room for improvement in cash retention.70
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.98B | 3.53B | 2.94B | 3.00B | 2.71B | 2.13B |
| Gross Profit | 952.28M | 788.96M | 372.19M | 499.31M | 193.72M | -13.89M |
| EBITDA | 994.01M | 930.36M | 554.35M | 614.22M | 713.93M | 590.80M |
| Net Income | 434.56M | 322.96M | 34.34M | 72.95M | 111.91M | -8.52M |
Balance Sheet | ||||||
| Total Assets | 7.21B | 7.14B | 7.03B | 7.86B | 7.13B | 7.21B |
| Cash, Cash Equivalents and Short-Term Investments | 753.36M | 801.63M | 835.22M | 1.05B | 860.41M | 825.91M |
| Total Debt | 2.47B | 2.76B | 3.09B | 3.54B | 3.35B | 3.49B |
| Total Liabilities | 4.54B | 4.73B | 4.91B | 5.51B | 4.86B | 5.07B |
| Stockholders Equity | 2.68B | 2.41B | 2.11B | 2.35B | 2.27B | 2.14B |
Cash Flow | ||||||
| Free Cash Flow | 324.86M | 364.18M | 420.01M | -202.22M | 150.42M | 185.64M |
| Operating Cash Flow | 894.76M | 692.46M | 736.33M | 480.38M | 831.82M | 633.56M |
| Investing Cash Flow | -628.83M | -228.63M | -23.23M | -904.89M | -698.52M | -683.47M |
| Financing Cash Flow | -399.00M | -384.75M | -667.81M | 269.08M | -90.60M | 178.43M |
SkyWest Technical Analysis
Negative
96.52
Price Trends
100.70
Negative
100.71
Negative
102.98
Negative
Market Momentum
-0.58
Positive
43.50
Neutral
26.84
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SKYW, the sentiment is Negative. The current price of 96.52 is below the 20-day moving average (MA) of 99.73, below the 50-day MA of 100.70, and below the 200-day MA of 102.98, indicating a bearish trend. The MACD of -0.58 indicates Positive momentum. The RSI at 43.50 is Neutral, neither overbought nor oversold. The STOCH value of 26.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $3.87B | 9.33 | 16.62% | ― | 19.27% | 78.26% | |
69 Neutral | $937.58M | 16.71 | 9.99% | ― | 4.27% | 28.47% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
55 Neutral | $5.90B | 58.06 | 2.36% | ― | 31.50% | -49.15% | |
54 Neutral | $1.62B | -5.44 | -25.37% | ― | 3.29% | -983.31% | |
49 Neutral | $1.77B | -2.92 | -25.29% | ― | -2.49% | 47.88% | |
47 Neutral | $1.06B | -7.72 | -27.87% | ― | 1.77% | -1964.48% |
* Industrials Sector Average
SKYW
SkyWest
96.52
-21.67
-18.33%
ALK
Alaska Air
50.83
-22.66
-30.83%
ALGT
Allegiant Travel Company
88.63
-9.18
-9.39%
JBLU
JetBlue Airways
4.87
-1.17
-19.37%
SNCY
Sun Country Airlines Holdings
17.54
0.92
5.54%
ULCC
Frontier Group Holdings
4.64
-3.56
-43.41%
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.