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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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Frontier Group Holdings

(NASDAQ:ULCC)

Rating:53Neutral
Price Target:
$4.00
▼(-2.91%Downside)
Frontier Group Holdings faces significant financial and operational challenges, as evidenced by mixed financial performance and cautious earnings guidance. While technical indicators show neutral to slightly bullish trends, the company must address high leverage and improve cash flow management to enhance financial resilience. Valuation appears fair, but macroeconomic challenges and strategic adjustments will be crucial for future profitability.
Positive Factors
Capacity Management
Capacity declines in the second half, led by off-peak flying cuts, are expected to provide some good news for Frontier.
Market Adaptation
Frontier 2.0 continues to gain traction, pointing to meaningful upside to consensus estimates.
Operational Performance
The carrier appears to be posting better operational results than its discount peers – this includes Frontier now generating a smallish amount of positive FCF.
Negative Factors
Consumer Demand
Significant risks are seen to the airline's model due to adjustments legacy carriers are making to how they manage the booking curve.
Economic Environment
Recent tariff/consumer turmoil might impact Frontier’s operations more significantly than its network peers, owing to the former’s absence of international long haul.
Financial Performance
Management now expects revenue growth of 5% versus consensus of 13.8%, a pre-tax margin of -5% versus consensus of -1.2%, and a net loss per share between ($0.20) and ($0.24) versus consensus of ($0.04).

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 makes money primarily through ticket sales, ancillary fees, and other revenue streams associated with its ultra-low-cost business model. The company's revenue model focuses on offering low base fares for its flights while charging additional fees for a variety of services and amenities such as seat selection, baggage, in-flight refreshments, and priority boarding. This unbundled pricing strategy allows passengers to pay only for the services they choose to use, enabling Frontier to maximize its earnings through ancillary revenue. Additionally, the company benefits from partnerships with other travel-related services, such as car rentals and hotel bookings, which contribute to its overall revenue. Operational efficiency, high aircraft utilization, and a young, fuel-efficient fleet are also key factors that aid in reducing costs and enhancing profitability.

Frontier Group Holdings Earnings Call Summary

Earnings Call Date:May 01, 2025
(Q1-2025)
|
% Change Since: 32.48%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted both positive initiatives in loyalty program enhancements and capacity management, alongside challenges like lower-than-expected quarterly results and a decline in revenue per passenger. The sentiment is balanced between the company's proactive measures and the negative impact of macroeconomic factors.
Q1-2025 Updates
Positive Updates
Revenue Increase and Capacity Management
Total operating revenue in the first quarter increased 5% versus the prior year quarter to $912 million on 5% higher capacity. Capacity reductions are expected to reduce costs and capital expenditures by over $300 million combined compared to previous expectations.
Loyalty Program Enhancements
The loyalty program has seen a positive response with a 30% year-over-year increase in spend. New benefits like seat upgrades and companion pass have been well received.
Fleet Management Strategy
Frontier took delivery of four A321neo aircraft and two spare engines, raising the fleet to 163. Lease extensions were made for 14 aircraft, supporting mid- to long-term fleet strategy.
Booking Trend Stabilization
Current booking trends suggest demand for May and early summer travel has stabilized, supported by recent revenue and network enhancements.
Negative Updates
Lower Than Expected Q1 Results
Results for the quarter were lower than original expectations due to a disruption in travel demand driven by macroeconomic uncertainty and aggressive industry pricing.
Revenue Per Passenger Decline
Total revenue per passenger was $116, down 6% year-over-year, despite a strong start to the year. The decline was attributed to economic uncertainty and aggressive promotions.
First Quarter Loss
First quarter pretax loss was $40 million, yielding a 4.4% loss margin, and net loss was $43 million, or $0.19 per share.
Challenges in March Demand
Economic uncertainty in March led to a sharp decrease in demand, significantly impacting results for the month and contributing to overall lower quarterly results.
Company Guidance
During the Frontier Group Holdings Q1 2025 earnings call, management provided guidance indicating challenges due to a disruption in travel demand, largely attributed to macroeconomic uncertainties. The company experienced an outsized impact due to its domestic leisure business model, with total operating revenue rising 5% to $912 million despite a 6% decrease in total revenue per passenger to $116. Capacity adjustments are expected to reduce costs and capital expenditures by over $300 million, with capacity down in the low single digits for the second quarter and similarly for the second half of the year. The company is targeting profitability in the second half of 2025, driven by stabilized demand, capacity moderation, and cost management. Meanwhile, loyalty program enhancements and digital upgrades are anticipated to strengthen customer engagement and financial performance.

Frontier Group Holdings Financial Statement Overview

Summary
Frontier Group Holdings shows moderate revenue growth but faces challenges with profitability and cash flow generation. High leverage and a low equity ratio pose financial risks, although returns on equity are moderately positive. Improvements in cost efficiency and cash management are essential for financial stability.
Income Statement
58
Neutral
Frontier Group Holdings exhibits moderate financial performance with a gradual revenue growth of 1.24% TTM and 5.18% in the previous annual period. However, the gross profit margin has decreased significantly from 51.31% to 22.34% over the last year, indicating pressure on cost management. Despite improvements, net profit margins remain thin at 1.78% TTM, reflecting the challenges in achieving consistent profitability.
Balance Sheet
45
Neutral
The balance sheet shows significant leverage, with a debt-to-equity ratio of 8.40 TTM, indicating high financial risk. The equity ratio is low at 8.80% TTM, suggesting limited shareholder equity buffer. However, the company has maintained a positive ROE of 11.93% TTM, showing some efficiency in generating returns from shareholders' equity.
Cash Flow
40
Negative
Cash flow analysis reveals negative free cash flow growth, with a decline of 48.10% TTM, indicating challenges in generating cash organically. The operating cash flow to net income ratio is negative, suggesting difficulties in converting income to cash. This raises concerns about the company's cash management and operational efficiency.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue3.82B3.77B3.59B3.33B2.06B1.25B
Gross Profit854.00M1.94B302.00M282.00M-202.00M-390.00M
EBITDA56.00M122.00M83.00M10.00M-99.00M-327.00M
Net Income68.00M85.00M-11.00M-37.00M-102.00M-225.00M
Balance Sheet
Total Assets6.48B6.15B4.99B4.50B4.24B3.55B
Cash, Cash Equivalents and Short-Term Investments686.00M740.00M609.00M761.00M918.00M378.00M
Total Debt4.79B4.47B3.46B2.93B2.85B2.61B
Total Liabilities5.91B5.55B4.49B3.99B3.71B3.24B
Stockholders Equity570.00M604.00M507.00M509.00M530.00M310.00M
Cash Flow
Free Cash Flow-234.00M-158.00M-348.00M-230.00M153.00M-573.00M
Operating Cash Flow-146.00M-82.00M-261.00M-78.00M216.00M-557.00M
Investing Cash Flow-97.00M-75.00M-90.00M-154.00M-67.00M11.00M
Financing Cash Flow307.00M288.00M199.00M75.00M391.00M156.00M

Frontier Group Holdings Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price4.12
Price Trends
50DMA
3.91
Positive
100DMA
4.33
Negative
200DMA
5.66
Negative
Market Momentum
MACD
0.10
Negative
RSI
55.52
Neutral
STOCH
36.79
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ULCC, the sentiment is Neutral. The current price of 4.12 is above the 20-day moving average (MA) of 3.92, above the 50-day MA of 3.91, and below the 200-day MA of 5.66, indicating a neutral trend. The MACD of 0.10 indicates Negative momentum. The RSI at 55.52 is Neutral, neither overbought nor oversold. The STOCH value of 36.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$664.03M12.679.46%2.24%-20.24%
68
Neutral
$528.19M12.0914.19%-7.43%-62.49%
66
Neutral
€9.39B16.613.99%4.81%2.85%-16.21%
53
Neutral
$938.39M14.0012.71%5.99%
52
Neutral
$943.59M-17.12%1.16%1.54%-466.46%
47
Neutral
$1.56B-11.30%-3.02%66.90%
45
Neutral
$104.23M
-5.34%-125.18%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ULCC
Frontier Group Holdings
4.12
0.36
9.57%
ALGT
Allegiant Travel Company
51.45
3.27
6.79%
JBLU
JetBlue Airways
4.36
-1.71
-28.17%
VLRS
Controladora Vuela Compania de Aviacion SAB de CV
4.41
-1.86
-29.67%
AZULQ
Azul SA
0.52
-3.97
-88.42%
SNCY
Sun Country Airlines Holdings
12.38
0.11
0.90%

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.

The most recent analyst rating on (ULCC) stock is a Hold with a $8.00 price target. To see the full list of analyst forecasts on Frontier Group Holdings stock, see the ULCC Stock Forecast page.

Executive/Board ChangesShareholder MeetingsBusiness Operations and Strategy
Frontier Group Holds 2025 Annual Stockholders Meeting
Neutral
May 16, 2025

On May 15, 2025, Frontier Group Holdings, Inc. held its 2025 Annual Meeting of Stockholders, where several key decisions were made. The stockholders elected four directors to the board, approved amendments to the company’s certificate of incorporation, ratified the appointment of Ernst & Young LLP as the independent auditor, and approved executive compensation for the fiscal year 2024. These decisions reflect the company’s ongoing efforts to adapt its governance and operational strategies, particularly in light of its loss of controlled company status in 2024.

The most recent analyst rating on (ULCC) stock is a Hold with a $8.00 price target. To see the full list of analyst forecasts on Frontier Group Holdings stock, see the ULCC Stock Forecast page.

Executive/Board Changes
Frontier Group’s CAO Rescinds Resignation, Salary Increased
Neutral
May 13, 2025

On March 7, 2025, Josh Wetzel, Vice President and Chief Accounting Officer of Frontier Group Holdings, initially submitted his resignation, which was later rescinded on May 12, 2025. Following his decision to stay, Mr. Wetzel’s annual base salary was increased to $330,000, while other compensation arrangements remained unchanged, ensuring his continued role and contributions to the company.

The most recent analyst rating on (ULCC) stock is a Hold with a $8.00 price target. To see the full list of analyst forecasts on Frontier Group Holdings stock, see the ULCC Stock Forecast page.

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: Jul 02, 2025