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Frontier Group Holdings, Inc. (ULCC)
:ULCC
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Frontier Group Holdings (ULCC) AI Stock Analysis

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ULCC

Frontier Group Holdings

(NASDAQ:ULCC)

Rating:54Neutral
Price Target:
$5.50
▲(6.18% Upside)
The overall stock score of 54 reflects significant financial challenges, including negative profitability and high leverage, which are partially offset by positive technical indicators suggesting bullish momentum. The valuation remains unattractive due to the negative P/E ratio and lack of dividend yield.
Positive Factors
Cost Management
Capacity cuts planned for the second half should allow material reductions in variable costs like fuel, station operations, and maintenance.
Demand
Management called out a significant demand inflection, with yields up meaningfully as sentiment has improved.
Negative Factors
Earnings Guidance
3Q25 EPS guidance of $(0.26) to $(0.42) were lower than estimates given weaker realized revenues.
Profitability
The airline is not expected to generate pre-tax profits in FY25 or FY26, maintaining a Hold rating and a $3 price target.
Revenue Growth
Management now expects revenue growth of 5% versus consensus of 13.8%, indicating lower than expected performance.

Frontier Group Holdings (ULCC) vs. SPDR S&P 500 ETF (SPY)

Frontier Group Holdings Business Overview & Revenue Model

Company DescriptionFrontier Group Holdings, Inc., a low-fare airline company, provides air transportation for passengers. The company operates an airline that serves approximately 120 airports throughout the United States and international destinations in the Americas. It offers its services through direct distribution channels, including its website, mobile app, and call center. As of December 31, 2021, the company had a fleet of 110 Airbus single-aisle aircraft comprising, 16 A320ceos, 73 A320neos, and 21 A321ceos. Frontier Group Holdings, Inc. was incorporated in 2013 and is headquartered in Denver, Colorado.
How the Company Makes MoneyFrontier Group Holdings generates revenue primarily through its passenger ticket sales, which are offered at low base fares with additional fees for optional services. Key revenue streams include ancillary revenues from baggage fees, seat selection, and onboard food and beverage sales. The company also benefits from partnerships with various travel-related services, including car rental and hotel bookings, which provide additional income opportunities. The focus on operational efficiency and cost control further enhances profitability, allowing Frontier to maintain competitive pricing while maximizing earnings from add-on services.

Frontier Group Holdings Earnings Call Summary

Earnings Call Date:Aug 05, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 23, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mix of positive developments and ongoing challenges. While there are signs of improvement in forward bookings, increased loyalty revenue, and strategic initiatives in premium offerings, the company faced a decrease in total revenue, operational challenges, and a net loss for the quarter. The sentiment is cautiously optimistic, with strategic plans aimed at addressing current market conditions.
Q2-2025 Updates
Positive Updates
Improvement in Forward Bookings
Forward bookings for August and beyond show improvement as the industry adjusts capacity, with a greater reduction in competitive capacity in Frontier markets by about 3 points.
Increased Cardholder Spend
Cardholder spend is up nearly 20% year-over-year, indicating positive customer engagement with enhanced loyalty initiatives.
Co-brand Loyalty Revenue Growth
The company achieved an increase of over 40% year-over-year in co-brand loyalty revenue per passenger in the second quarter.
Fleet Expansion and Financing
Took delivery of 3 A321neo aircraft and committed to financing that is expected to boost liquidity by over $200 million by year-end.
Introduction of First-Class Seating
Fleet-wide installation of first-class seating remains on track for completion by next spring, reflecting a focus on premiumization.
Negative Updates
Decrease in Total Revenue
Total revenue in the second quarter was $929 million, down 5% on 2% lower capacity compared to the prior year quarter.
Pre-tax and Net Loss
The second quarter pre-tax loss and net loss were both $70 million, resulting in $0.31 of net loss per share.
Operational Challenges
Significant weather and extensive air traffic control delays in late May and June affected performance, estimated to impact the quarter by 2 to 3 points.
Weak Consumer Sentiment
Impacted revenue performance in the early part of the quarter, combined with revenue-related headwinds from ATC and weather challenges.
Challenges in Las Vegas Market
Las Vegas experienced some challenges, particularly in leisure traffic, affecting overall performance.
Company Guidance
During the second quarter of fiscal year 2025, Frontier Airlines' performance was within its guidance range despite challenges, such as adverse weather and air traffic control delays, which impacted results by 2 to 3 points. The airline anticipates similar impacts in its third quarter guidance. Total revenue for the second quarter was $929 million, representing a 5% decrease from the previous year with a 2% reduction in capacity. The revenue per available seat mile (RASM) was $0.0901, with a stage length-adjusted RASM of $0.0874. The airline experienced a 79% load factor, a 1.2 percentage point increase from the prior year. Frontier launched 35 new routes and expects mid- to high single-digit RASM growth in the third quarter. The company is also investing in enhanced loyalty and premium product offerings, with co-brand loyalty revenue per passenger increasing by over 40% year-over-year. The second quarter pre-tax and net losses were $70 million each, with a net loss per share of $0.31. The third quarter guidance anticipates an adjusted loss between $0.26 and $0.42 per share, with fuel costs expected at $2.51 per gallon. Frontier also projects third-quarter capacity to be down 4% to 5% year-over-year.

Frontier Group Holdings Financial Statement Overview

Summary
Frontier Group Holdings faces significant financial challenges, with declining revenue growth, negative profitability margins, and high leverage. The company's cash flow position is weak, with negative operating and free cash flows. These factors indicate potential financial instability and highlight the need for strategic improvements to enhance profitability and reduce financial risk.
Income Statement
45
Neutral
Frontier Group Holdings has experienced fluctuating revenue growth, with a recent decline in the TTM period. Gross profit margins have decreased significantly from the previous year, and net profit margins have turned negative. The EBIT and EBITDA margins are also weak, indicating challenges in operational efficiency and profitability.
Balance Sheet
40
Negative
The company has a high debt-to-equity ratio, which has increased in the TTM period, indicating significant leverage and potential financial risk. Return on equity is negative, reflecting poor profitability relative to shareholder equity. The equity ratio is low, suggesting a heavy reliance on debt financing.
Cash Flow
35
Negative
Operating cash flow and free cash flow are both negative, with a declining trend in free cash flow growth. The operating cash flow to net income ratio is negative, indicating cash flow challenges. The free cash flow to net income ratio is high, but this is due to negative net income, which is not a positive indicator.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue3.78B3.77B3.59B3.33B2.06B1.25B
Gross Profit787.00M1.94B302.00M282.00M-202.00M-390.00M
EBITDA43.00M122.00M83.00M10.00M-99.00M-327.00M
Net Income-33.00M85.00M-11.00M-37.00M-102.00M-225.00M
Balance Sheet
Total Assets6.52B6.15B4.99B4.50B4.24B3.55B
Cash, Cash Equivalents and Short-Term Investments563.00M740.00M609.00M761.00M918.00M378.00M
Total Debt4.87B4.47B3.46B2.93B2.85B2.61B
Total Liabilities6.02B5.55B4.49B3.99B3.71B3.24B
Stockholders Equity506.00M604.00M507.00M509.00M530.00M310.00M
Cash Flow
Free Cash Flow-210.00M-158.00M-348.00M-230.00M153.00M-573.00M
Operating Cash Flow-69.00M-82.00M-261.00M-78.00M216.00M-557.00M
Investing Cash Flow-154.00M-75.00M-90.00M-154.00M-67.00M11.00M
Financing Cash Flow347.00M288.00M199.00M75.00M391.00M156.00M

Frontier Group Holdings Technical Analysis

Technical Analysis Sentiment
Positive
Last Price5.18
Price Trends
50DMA
4.25
Positive
100DMA
3.95
Positive
200DMA
5.36
Negative
Market Momentum
MACD
0.32
Negative
RSI
59.72
Neutral
STOCH
69.81
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ULCC, the sentiment is Positive. The current price of 5.18 is above the 20-day moving average (MA) of 4.51, above the 50-day MA of 4.25, and below the 200-day MA of 5.36, indicating a neutral trend. The MACD of 0.32 indicates Negative momentum. The RSI at 59.72 is Neutral, neither overbought nor oversold. The STOCH value of 69.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ULCC.

Frontier Group Holdings Risk Analysis

Frontier Group Holdings disclosed 55 risk factors in its most recent earnings report. Frontier Group 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

Frontier Group Holdings Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$713.37M12.6910.15%3.76%17.44%
65
Neutral
$2.65B14.2814.65%3.54%2.94%43.39%
65
Neutral
$705.67M12.09-12.00%-7.05%-128.03%
60
Neutral
$1.18B-24.02%1.25%3.17%-1689.03%
56
Neutral
$2.00B-15.12%-1.90%61.06%
54
Neutral
$1.18B13.43-6.63%4.60%49.81%
45
Neutral
$157.86M
-1.94%68.93%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ULCC
Frontier Group Holdings
5.18
1.44
38.50%
ALGT
Allegiant Travel Company
64.27
23.63
58.14%
JBLU
JetBlue Airways
5.09
-0.21
-3.96%
VLRS
Controladora Vuela Compania de Aviacion SAB de CV
6.11
0.15
2.52%
AZULQ
Azul SA
0.52
-1.80
-77.59%
SNCY
Sun Country Airlines Holdings
12.96
1.77
15.82%

Frontier Group Holdings Corporate Events

Business Operations and StrategyFinancial Disclosures
Frontier Group Holdings Reaffirms Q2 2025 Loss Guidance
Neutral
May 20, 2025

Frontier Group Holdings reaffirmed its adjusted loss per share guidance for Q2 2025, initially disclosed on May 1, 2025, ahead of an investor conference on May 22, 2025. The company noted stable travel demand following earlier disruptions and expects positive revenue per available seat mile, despite lower capacity compared to the previous year. CEO Barry Biffle highlighted stabilized booking trends for May and early summer, with load factors slightly higher and RASM up in low single-digits. The company aims for profitability in the second half of 2025, leveraging commercial investments and cost management, with unchanged capacity plans for the rest of 2025.

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.Date of analysis: Sep 03, 2025