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Sun Country Airlines Holdings (SNCY)
NASDAQ:SNCY
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Sun Country Airlines Holdings
(NASDAQ:SNCY)
Rating:75Outperform
Price Target:
$13.00
▲(19.16%Upside)
Positive Factors
Capital Allocation
Sun Country remains in an enviable position from a capital allocation standpoint with limited CapEx needs and low net leverage.
Operational Efficiency
Sun Country has been able to post industry-leading margins that spar with those of the majors.
Revenue Growth
The shift in growth focus from scheduled services to the Cargo segment is paying off, with significant revenue growth and fleet expansion expected.
Negative Factors
Management Turnover
Management turnover is noted as a potential challenge, but it's not expected to hinder the achievement of normalized earnings targets.
Sun Country Airlines Holdings (SNCY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$580.50M
Dividend YieldN/A
Average Volume (3M)790.77K
Price to Earnings (P/E)11.2
Beta (1Y)1.03
Revenue Growth2.24%
EPS Growth-20.24%
CountryUS
Employees3,124
SectorIndustrials
Sector Strength87
IndustryAirlines, Airports & Air Services
Share Statistics
EPS (TTM)0.72
Shares Outstanding53,207,687
10 Day Avg. Volume826,518
30 Day Avg. Volume790,771
Financial Highlights & Ratios
PEG Ratio-0.66
Price to Book (P/B)1.87
Price to Sales (P/S)0.00
P/FCF Ratio-15.19
Enterprise Value/Market Cap2.51
Enterprise Value/Revenue0.34
Enterprise Value/Gross Profit3.05
Enterprise Value/Ebitda1.85
Forecast
1Y Price Target
$17.71Price Target Upside62.33% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Sun Country Airlines Holdings Business Overview & Revenue Model
Company DescriptionSun Country Airlines Holdings, Inc. (SNCY) is a U.S.-based airline company headquartered in Minneapolis, Minnesota. It operates primarily in the passenger airline sector, offering scheduled service, charter, and cargo operations. The company is known for its focus on leisure travel, providing affordable air travel options to various destinations across the United States, Mexico, Central America, and the Caribbean. Sun Country Airlines aims to deliver a reliable and customer-friendly flying experience, with a fleet that balances comfort and efficiency.
How the Company Makes MoneySun Country Airlines Holdings generates revenue through several key streams. The primary source is passenger ticket sales from scheduled flights, where the company offers competitive pricing aimed at leisure travelers. Additional income is derived from ancillary services such as baggage fees, seat selection, and onboard purchases. The company also earns significant revenue from its charter services, offering tailored flight solutions for sports teams, government agencies, and other organizations. Moreover, Sun Country has a cargo operation that contributes to its income, notably through a partnership with Amazon to provide air freight services under the Amazon Air network. This diversification of services allows the company to maintain a robust revenue model, balancing passenger services with charter and cargo operations.
Sun Country Airlines Holdings Earnings Call Summary
Earnings Call Date:May 01, 2025
(Q1-2025)
| % Change Since: 10.99%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
Sun Country Airlines delivered record-breaking revenue and earnings, expanded its cargo and charter segments, and maintained strong operational metrics. However, challenges in scheduled service ASM and TRASM, temporary cost pressures, and increased operating expenses were noted. The highlights significantly outweigh the lowlights, indicating a strong performance overall.Q1-2025 Updates
Positive Updates
Record-Breaking Revenue and Earnings
Sun Country Airlines reported total revenue of $326.6 million, the highest of any quarter on record, with an operating margin of 17.2% and adjusted operating margin of 18.3%. Diluted adjusted EPS for the quarter was $0.72.
Cargo Segment Expansion
Execution on cargo expansion continues with 3 of the 8 additional committed aircraft inducted, unit revenues growing by about 20% compared to last year, and expectations to double cargo revenue by September 2025.
Charter Revenue Growth
Charter revenue in the first quarter grew 15.6% to $55 million with significant ad hoc charter revenue growth, increasing by 55% compared to last year.
Strong Operational Metrics
Sun Country achieved a controllable completion factor of 99.4% in scheduled business and over 98% on time in cargo business, with a record mishandled bag rate of 1.3.
Airline Leader of the Year Award
Sun Country was awarded Air Transport World's Airline Leader of the Year for 2025.
Negative Updates
Scheduled Service ASM and TRASM Challenges
Sun Country reported a 7% scheduled service ASM growth with a 4.5% TRASM decline, and expects scheduled service ASMs to decrease by about 7% in Q2 with a TRASM improvement of only about 3%.
Temporary Cost Pressures
Temporary cost pressures are expected from the cargo growth in the form of staffing surpluses and lower utilization of the passenger fleet, which will affect unit costs until staffing catches up.
Increase in Operating Expenses
Total operating expense grew 5.5% on 5.8% growth in block hours, with adjusted CASM increasing by 3.5%. Increases in salaries, wages, and non-routine maintenance events contributed to this.
Company Guidance
During Sun Country Airlines' First Quarter 2025 earnings call, the company provided detailed guidance reflecting its strategic focus on leveraging its diversified business model. Notably, Sun Country achieved a record total revenue of $326.6 million, marking a 4.9% increase from Q1 2024, with an operating margin of 17.2% and an adjusted operating margin of 18.3%. The airline reported a 7% growth in scheduled service available seat miles (ASMs), despite a 4.5% decline in total revenue per available seat mile (TRASM). For Q2 2025, Sun Country plans to reduce scheduled service ASMs by about 7%, expecting a TRASM improvement of around 3%. The airline continues to expand its cargo operations, with cargo revenue up 17.6% to $28.2 million in Q1, and anticipates cargo revenue will double by September as it inducts additional aircraft. The company's fleet strategy includes redelivering its first 737-900 and planning further expansions as pilot staffing aligns with fleet growth by Q2 2026. Financially, Sun Country maintains a robust position with liquidity at $227.1 million and a net debt to adjusted EBITDA ratio of 2.0x, with plans to pay $108 million towards debt obligations in 2025. The airline also highlighted its ability to generate high free cash yield and anticipates net debt levels to fall below zero by 2028.Sun Country Airlines Holdings Financial Statement Overview
Summary
Sun Country Airlines presents strengths in cash flow management and operational efficiency, with strong margins in the income statement. However, challenges like declining net income and potential liquidity issues could impact sustainability. The balance sheet is stable but could benefit from improved liquidity and equity.Income Statement
Sun Country Airlines shows a strong gross profit margin of 43.76% and a solid net profit margin of 4.96% for TTM (Trailing-Twelve-Months). Revenue growth is modest at 1.41% annually. EBIT and EBITDA margins are healthy at 9.81% and 17.32%, respectively, indicating efficient operations. However, the net income has decreased compared to the previous year, which could be a concern for sustained profitability.75
Positive
Balance Sheet
The debt-to-equity ratio of 0.43 indicates moderate leverage, while the return on equity (ROE) of 8.98% is reasonable but could be improved. The equity ratio of 37.88% reflects a stable capital structure, although higher equity would provide more financial stability. The balance sheet shows a decrease in cash and short-term investments, highlighting potential liquidity challenges.68
Positive
Cash Flow
The company demonstrates strong cash flow management with a robust operating cash flow to net income ratio of 2.48 and a free cash flow to net income ratio of 2.15. Free cash flow growth is stable with only a slight decrease of 0.87% annually, indicating efficient capital expenditure management and strong operational cash generation.80
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.09B | 1.08B | 1.05B | 894.44M | 623.01M | 401.49M | Gross Profit |
| 477.25M | 748.96M | 269.17M | 177.74M | 135.22M | 18.11M | EBIT |
| 107.06M | 105.99M | 127.50M | -12.64M | 1.27M | 17.39M | EBITDA |
| 188.90M | 210.58M | 226.24M | 123.35M | 200.21M | 91.36M | Net Income Common Stockholders |
| 54.13M | 52.90M | 72.18M | 17.68M | 81.25M | -3.90M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 53.40K | 187.27M | 187.41M | 92.10M | 309.30M | 67.65M | Total Assets |
| 1.59M | 1.63B | 1.62B | 1.52B | 1.38B | 1.05B | Total Debt |
| 262.30K | 619.03M | 697.78M | 629.60M | 545.60M | 536.83M | Net Debt |
| 208.90K | 535.82M | 651.50M | 537.50M | 236.30M | 474.80M | Total Liabilities |
| 989.00K | 1.06B | 1.11B | 1.03B | 889.80M | 769.45M | Stockholders Equity |
| 603.00K | 570.37M | 514.40M | 492.70M | 486.80M | 283.82M |
| Cash Flow | Free Cash Flow | ||||
| 116.51M | 117.53M | -44.04M | -60.50M | 35.70M | -95.92M | Operating Cash Flow |
| 150.57M | 164.86M | 174.12M | 127.40M | 152.00M | 374.00K | Investing Cash Flow |
| 28.69M | 8.40M | -171.23M | -349.30M | -117.00M | -96.03M | Financing Cash Flow |
| -102.01M | -136.47M | -42.14M | 7.00M | 212.40M | 101.54M |
Sun Country Airlines Holdings Technical Analysis
Negative
10.91
Price Trends
10.90
Positive
13.09
Negative
13.16
Negative
Market Momentum
0.03
Positive
41.96
Neutral
24.93
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 10.91 is below the 20-day moving average (MA) of 11.61, above the 50-day MA of 10.90, and below the 200-day MA of 13.16, indicating a neutral trend. The MACD of 0.03 indicates Positive momentum. The RSI at 41.96 is Neutral, neither overbought nor oversold. The STOCH value of 24.93 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 (66)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $580.50M | 11.16 | 9.46% | ― | 2.24% | -20.24% | |
66 Neutral | $521.85M | 12.25 | 14.19% | ― | -7.43% | -62.49% | |
66 Neutral | $4.47B | 12.22 | 5.40% | 3.65% | 4.14% | -12.00% | |
57 Neutral | $931.90M | ― | -17.12% | 1.18% | 1.54% | -466.46% | |
53 Neutral | $781.23M | 11.60 | 12.71% | ― | 5.99% | ― | |
48 Neutral | $1.58B | ― | -11.30% | ― | -3.02% | 66.90% |
* Industrials Sector Average
Performance Comparison
SNCY
Sun Country Airlines Holdings
10.91
0.55
5.31%
ALGT
Allegiant Travel Company
51.05
-3.28
-6.04%
JBLU
JetBlue Airways
4.47
-1.09
-19.60%
VLRS
Controladora Vuela Compania de Aviacion SAB de CV
4.47
-2.12
-32.17%
ULCC
Frontier Group Holdings
3.43
-1.98
-36.60%
Sun Country Airlines Holdings Corporate Events
Executive/Board ChangesShareholder Meetings
Sun Country Airlines Holds Annual Stockholder Meeting
Neutral
Jun 13, 2025
On June 11, 2025, Sun Country Airlines Holdings held its annual meeting of stockholders, where several key proposals were voted upon. The stockholders re-elected Thomas C. Kennedy, Gail Peterson, and Jennifer Vogel as Class I directors for a term expiring in 2028. Additionally, the compensation of the company’s named executive officers was approved on a non-binding, advisory basis, and KPMG LLP was ratified as the independent registered public accounting firm for the fiscal year ending December 31, 2025.
The most recent analyst rating on (SNCY) stock is a Buy with a $21.00 price target. To see the full list of analyst forecasts on Sun Country Airlines Holdings stock, see the SNCY Stock Forecast page.
Executive/Board Changes
Sun Country Airlines Announces Leadership Changes
Neutral
Apr 17, 2025
On April 16, 2025, Sun Country Airlines announced the resignation of Dave Davis as President and Chief Financial Officer, with Bill Trousdale stepping in as interim CFO. Additionally, Gregory Mays stepped down as Chief Operating Officer on April 17, 2025, with Stephen Coley taking over as interim Head of Operations. These transitions are not due to disagreements, and the company plans to search for permanent replacements, ensuring continuity and stability in its operations.
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.