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Sun Country Airlines Holdings (SNCY)
NASDAQ:SNCY
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Sun Country Airlines Holdings
(NASDAQ:SNCY)
60Neutral
Positive Factors
Earnings
Sun Country Airlines reported solid 3Q results with revenue in line with estimates and adjusted EBIT margin ahead.
Financial Performance
The airline has a strong balance sheet with net leverage around 2.7x and minimal CapEx commitments in the years ahead, with potential share repurchases considered for 2025.
Market Position
The outlook on the scheduled service side looks bright as many competitors are reducing capacity, potentially benefiting Sun Country Airlines in its core Minneapolis market.
Negative Factors
Cost Management
Management is optimistic about cost management, expecting only mid-single-digit increases in CASMex in 2025.
Debt Management
Management anticipates paying down debt this year but noted that a buyback is always on the table.
Sun Country Airlines Holdings (SNCY) vs. S&P 500 (SPY)
Market Cap
$684.14M
Dividend YieldN/A
Average Volume (3M)835.01K
Price to Earnings (P/E)13.5
Beta (1Y)0.68
Revenue Growth2.49%
EPS Growth-22.41%
CountryUS
Employees3,141
SectorIndustrials
Sector Strength66
IndustryAirlines, Airports & Air Services
Share Statistics
EPS (TTM)0.96
Shares Outstanding53,157,963
10 Day Avg. Volume745,821
30 Day Avg. Volume835,012
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.63
Price to Cash Flow (P/CF)1.90
P/FCF Ratio1.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$23.20Price Target Upside80.26% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Sun Country Airlines Holdings Business Overview & Revenue Model
Company DescriptionSun Country Airlines Holdings, Inc., an air carrier company, provides scheduled passenger, air cargo, charter air transportation, and related services in the United States, Latin America, and internationally. As of December 31, 2021, the company operated a fleet of 48 aircraft, including 36 passenger and 12 cargo aircraft. Sun Country Airlines Holdings, Inc. was founded in 1983 and is headquartered in Minneapolis, Minnesota.
How the Company Makes MoneySun Country Airlines generates revenue through multiple streams, primarily from its passenger travel services. The company earns money by offering scheduled flights and selling tickets to passengers. In addition to passenger services, Sun Country Airlines also operates charter services for groups, organizations, and other entities requiring private flight arrangements. Another significant revenue stream is its cargo operations, where the airline partners with logistics companies to transport freight, taking advantage of available capacity on passenger flights. Ancillary revenue, generated from services such as baggage fees, seat selection, and in-flight sales, also contributes to the company's earnings. Strategic partnerships with travel agencies and tour operators further enhance its revenue potential by expanding its customer reach and offering bundled travel packages.
Sun Country Airlines Holdings Financial Statement Overview
Summary
Sun Country Airlines shows strong revenue growth and improved operational efficiency, but high leverage and cash conversion challenges remain concerns.Income Statement
Sun Country Airlines shows a strong revenue growth trajectory with a 25% increase from 2021 to 2022 and continued growth into 2023 and 2024. The gross profit margin improved significantly in 2024, indicating enhanced operational efficiency. However, net profit margins declined due to a drop in net income, suggesting potential challenges in cost management.76
Positive
Balance Sheet
The company's debt-to-equity ratio remains high, which could pose financial risk. However, the company has shown improvement in stockholders' equity over the years. The equity ratio has improved, indicating a stronger asset base, but leverage remains a concern due to significant debt levels.65
Positive
Cash Flow
Operating cash flow has remained positive, but free cash flow has been negative in most recent periods, which may affect future investment capabilities. The free cash flow to net income ratio indicates challenges in converting net income into free cash flow, suggesting potential cash management issues.58
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.08B | 1.05B | 894.44M | 623.01M | 401.49M | Gross Profit |
| 748.96M | 269.17M | 177.74M | 135.22M | 18.11M | EBIT |
| 105.99M | 127.50M | -12.64M | 1.27M | 17.39M | EBITDA |
| 210.58M | 226.24M | 123.35M | 200.21M | 91.36M | Net Income Common Stockholders |
| 52.90M | 72.18M | 17.68M | 81.25M | -3.90M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 187.27M | 187.41M | 92.10M | 309.30M | 67.65M | Total Assets |
| 1.63B | 1.62B | 1.52B | 1.38B | 1.05B | Total Debt |
| 619.03M | 697.78M | 629.60M | 545.60M | 536.83M | Net Debt |
| 535.82M | 651.50M | 537.50M | 236.30M | 474.80M | Total Liabilities |
| 1.06B | 1.11B | 1.03B | 889.80M | 769.45M | Stockholders Equity |
| 570.37M | 514.40M | 492.70M | 486.80M | 283.82M |
| Cash Flow | Free Cash Flow | |||
| 117.53M | -44.04M | -60.50M | 35.70M | -95.92M | Operating Cash Flow |
| 164.86M | 174.12M | 127.40M | 152.00M | 374.00K | Investing Cash Flow |
| 8.40M | -171.23M | -349.30M | -117.00M | -96.03M | Financing Cash Flow |
| -136.47M | -42.14M | 7.00M | 212.40M | 101.54M |
Sun Country Airlines Holdings Technical Analysis
Negative
12.87
Price Trends
15.54
Negative
15.20
Negative
13.27
Negative
Market Momentum
-0.70
Negative
36.34
Neutral
46.39
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SNCY, the sentiment is Negative. The current price of 12.87 is below the 20-day moving average (MA) of 13.71, below the 50-day MA of 15.54, and below the 200-day MA of 13.27, indicating a bearish trend. The MACD of -0.70 indicates Negative momentum. The RSI at 36.34 is Neutral, neither overbought nor oversold. The STOCH value of 46.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SNCY.
Sun Country Airlines Holdings Risk Analysis
Sun Country Airlines Holdings disclosed 44 risk factors in its most recent earnings report. Sun Country Airlines 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
Sun Country Airlines Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
70 Outperform | $28.32B | 8.22 | 26.19% | 1.25% | 6.19% | -25.26% | |
67 Neutral | $19.91B | 44.53 | 4.50% | 2.14% | 5.34% | -6.20% | |
62 Neutral | $8.05B | 13.61 | 3.91% | 3.11% | 3.81% | -13.91% | |
61 Neutral | $1.09B | 13.02 | 15.12% | ― | 5.18% | ― | |
60 Neutral | $684.14M | 13.46 | 9.75% | ― | 2.49% | -22.41% | |
50 Neutral | $975.96M | ― | -19.93% | 4.51% | 0.11% | -311.73% | |
47 Neutral | $1.84B | ― | -26.60% | ― | -3.50% | -148.99% |
* Industrials Sector Average
Performance Comparison
SNCY
Sun Country Airlines Holdings
12.87
-2.10
-14.03%
ALGT
Allegiant Travel Company
53.22
-15.48
-22.53%
DAL
Delta Air Lines
43.84
-3.86
-8.09%
JBLU
JetBlue Airways
5.21
-1.88
-26.52%
LUV
Southwest Airlines
33.59
5.09
17.86%
ULCC
Frontier Group Holdings
4.80
-2.39
-33.24%
Sun Country Airlines Holdings Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: -22.56% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Sun Country's strong financial performance, record revenues, and strategic growth in the cargo segment. Despite challenges in scheduled service revenue and increased pilot costs, the company's diversified model and strategic decisions position it well for future growth.Highlights
Record Revenue and Profitability
Q4 2024 marked Sun Country's tenth consecutive quarter of profitability, with total revenue reaching $260.4 million and an adjusted operating margin of 10.6%, both the highest on record for the company.
Full Year Revenue Milestone
Sun Country achieved its highest full-year revenue of $1.08 billion in 2024, driven by strong performance in the charter and cargo segments.
Cargo Segment Growth
Cargo revenue grew by 13.1% in Q4 2024, reaching an all-time quarterly high of $28.6 million, despite a decrease in Cargo block hours. The company expects cargo revenue to roughly double by next year.
Strategic Fleet Expansion
Sun Country received its first cargo aircraft from a new agreement with Amazon, with plans to grow the cargo fleet to 20 by summer 2025, and expects to increase block hours by about 30% through 2027.
Union Agreements
The company reached agreements in principle with the unions of both flight attendants and dispatchers, expected to go to vote soon, promising improved rates and work rules.
Lowlights
Scheduled Service Revenue Challenges
Q4 scheduled service TRASM was down 1% despite a 3.5% increase in scheduled service ASMs, reflecting challenges in revenue optimization.
Caribbean Market Softness
The Caribbean market showed some weakness, although this was attributed to a significant increase in capacity as part of strategic growth.
Higher Pilot Costs
There was a notable increase in pilot pay in 2025, impacting the operating margin forecast for Q1 2025.
Company Guidance
During the Sun Country Airlines Fourth Quarter and Full Year 2024 Earnings Call, the company provided guidance highlighting several key metrics. For the first quarter of 2025, total revenue is expected to be between $330 million and $340 million, with block hour growth projected at 7% to 9%. They anticipate a fuel cost of $2.76 per gallon and an operating margin between 17% and 21%. Full-year 2025 total block hours are expected to increase by 9% to 10%, driven primarily by eight additional Amazon cargo aircraft, while scheduled service Available Seat Miles (ASMs) are projected to decline by 3% to 5% starting in Q2. Capital expenditures for 2025 are forecasted to be between $70 million and $80 million, focusing largely on spare engines. Overall, Sun Country expects to maintain high profitability with strong cash flow and operational excellence.Sun Country Airlines Holdings Corporate Events
Financial Disclosures
Sun Country Airlines Adjusts Q1 2025 Revenue Guidance
Negative
Mar 11, 2025
Sun Country Airlines Holdings has updated its financial guidance for the first quarter of 2025, adjusting its total revenue expectations to a range of $325 to $330 million, down from the original $330 to $340 million. The company also anticipates a lower operating income margin, aligning with the lower end of its original guidance. These adjustments reflect recent performance trends and economic conditions, impacting the company’s operational outlook and potentially influencing stakeholder expectations.
Private Placements and FinancingStock Buyback
Sun Country Airlines Announces Secondary Stock Offering
Neutral
Feb 10, 2025
On February 10, 2025, Sun Country Airlines Holdings announced a proposed secondary public offering of 6,346,105 shares of its common stock, owned by an affiliate of investment funds managed by Apollo Global Management. The company will not sell any shares or receive proceeds from this offering. Additionally, Sun Country authorized a share repurchase of approximately $10 million worth of common stock, which will be funded from existing cash, with the terms approved by its board of directors.
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.