SkyWest (SKYW) AI Stock Analysis

• Market Cap: $3.80B
• Dividend Yield: N/A
• Average Volume (3M): 505.02K
• Price to Earnings (P/E): 10.7
• Beta (1Y): 1.14
• Revenue Growth: 20.53%
• EPS Growth: 217.24%
• Country: US
• Employees: 12,876
• Sector: Industrials
• Sector Strength: 79
• Industry: Airlines, Airports & Air Services
• EPS (TTM): 8.73
• Shares Outstanding: 40,467,240
• 10 Day Avg. Volume: 398,869
• 30 Day Avg. Volume: 505,024
• PEG Ratio: 0.05
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.46
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 7.01
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $118.67
• Price Target Upside: 26.50% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

SkyWest's overall stock score reflects strong financial performance and positive earnings outlook, supported by strategic fleet expansion and effective cash flow management. The technical indicators and valuation suggest a cautious but stable position, with challenges in macroeconomic conditions and operational bottlenecks posing potential risks. The company's strategic initiatives and solid financial foundation position it well for future growth, though investors should remain mindful of external uncertainties.

Positive Factors

Financial performance

SkyWest reported its 9th EPS beat in a row with adjusted EPS of $2.18, indicating strong financial performance.

Future growth prospects

Management raised guidance for future EPS and expects higher than prior consensus estimates.

Revenue growth

Revenue of $944mm was far ahead of our estimate of $900mm and up 25.6% y/y.

Negative Factors

Market conditions

Demand for its capacity remains strong despite the macro softening that mainline carriers are facing.

Operational capacity

SkyWest is focused on restoring service to underserved communities and placing new E175s into service, which are highly valued by mainline partners.

SkyWest Business Overview & Revenue Model

Company Description

SkyWest, 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 Money

SkyWest 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 exhibits strong financial health with solid revenue growth, efficient operations, and stable financial management. The company has effectively reduced leverage, enhancing its balance sheet stability. While cash flow management is robust, high capital expenditures could pose a challenge. Overall, SkyWest is well-positioned in the competitive airline industry, with a trajectory towards improved financial performance.

Income Statement

SkyWest has demonstrated strong revenue growth, evident in the TTM total revenue of $3.67 billion, a significant increase from previous years. The gross profit margin is robust at 35.10%, and the net profit margin is healthy at 9.89%, reflecting efficient operations. EBIT and EBITDA margins are solid, indicating good operational management. However, fluctuating net income in previous years suggests some historical volatility.

Balance Sheet

The company's debt-to-equity ratio of 0.03 in TTM shows low leverage, indicating conservative financial management. Return on equity is respectable at 14.68%, showcasing effective use of equity. The equity ratio stands at 34.77%, suggesting a stable capital structure. Nevertheless, past high debt levels highlight potential financial risk if not carefully managed.

Cash Flow

SkyWest's free cash flow is strong, with a TTM figure of $410 million. The free cash flow to net income ratio of 1.13 suggests good cash generation relative to earnings. Operating cash flow is consistently positive, indicating strong cash management. However, capital expenditures remain significant, which could affect future cash dynamics.

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
788.96M	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
7.50B	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
364.18M	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

• Technical Analysis Sentiment: Positive
• Last Price: 93.81
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 93.81 is above the 20-day moving average (MA) of 86.24, above the 50-day MA of 89.01, and below the 200-day MA of 93.82, indicating a neutral trend. The MACD of 0.30 indicates Negative momentum. The RSI at 61.00 is Neutral, neither overbought nor oversold. The STOCH value of 75.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SKYW.

SkyWest Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SKYW	73 Outperform	$3.80B	10.74	15.66%	―	20.53%	217.24%
ATSG	69 Neutral	$1.48B	55.88	1.92%	―	-5.25%	-49.90%
Sector *	64 Neutral	$4.28B	11.80	5.33%	250.46%	4.10%	-9.26%
ALK	63 Neutral	$5.53B	14.74	8.90%	―	20.82%	47.79%
ULCC	56 Neutral	$765.29M	9.11	12.71%	―	5.18%	―
ALGT	48 Neutral	$930.08M	―	-19.93%	5.03%	0.11%	-311.73%
JBLU	43 Neutral	$1.69B	―	-11.30%	―	-3.02%	66.90%