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Frontier Group Holdings (ULCC)
NASDAQ:ULCC

Frontier Group Holdings (ULCC) AI Stock Analysis

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Frontier Group Holdings

(NASDAQ:ULCC)

Rating:62Neutral
Price Target:
$4.50
▲(13.64%Upside)
Frontier Group Holdings' stock score is primarily influenced by its financial performance, which shows promising revenue growth and debt management but is offset by weak profitability and cash flow. Technical analysis and valuation provide moderate support, indicating potential for growth, while earnings call and corporate events highlight ongoing challenges from macroeconomic factors. Overall, the stock presents a balanced risk-reward profile with room for improvement.
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.
Financial Performance
Frontier remains on a path to double-digit margins by the summer, indicating plenty of upside to come if execution can continue.
Market Positioning
Frontier has made strides in growing some premium cabin services, relative to its US discount peers.
Negative Factors
Cost Pressures
Tariffs may pressure sale/leaseback (SLB) activity, while the carrier likely faces materially higher labor costs than its peers, as it negotiates contract amendments with its pilots.
Profitability Challenges
The airline is not expected to generate pre-tax profits in FY25 or FY26, maintaining a Hold rating and a $3 price target.
Revenue Outlook
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: 27.33%|
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 exhibits solid revenue growth and improved debt management, yet struggles with low profitability margins and weak cash flow generation. These factors highlight significant progress but also areas needing further improvement for long-term financial health.
Income Statement
65
Positive
Frontier Group Holdings has shown significant revenue growth over the years, particularly a 5.19% increase from 2023 to 2024. The gross profit margin improved drastically, indicating better cost management. However, the net profit margin remains low, reflecting persistent challenges in achieving profitability. The company shifted from a net loss in 2023 to a net income in 2024, which is a positive sign.
Balance Sheet
70
Positive
The balance sheet shows a strong recovery with zero debt in 2024, which substantially improves the debt-to-equity ratio. The equity ratio improved as well, showcasing a stronger capital structure. However, stockholder's equity remains relatively low compared to total assets, indicating room for strengthening financial stability.
Cash Flow
50
Neutral
Frontier showed improvement in free cash flow from a significant negative value in 2023 to a less negative figure in 2024. Despite this, the operating cash flow to net income ratio is not available for 2024 due to zero operating cash flow, limiting insights into cash generation efficiency. Free cash flow remains negative, signaling potential liquidity challenges.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
3.82B3.77B3.59B3.33B2.06B1.25B
Gross Profit
854.00M1.94B302.00M282.00M-202.00M-390.00M
EBIT
43.00M58.00M-3.00M-35.00M-117.00M-365.00M
EBITDA
56.00M122.00M83.00M3.00M-99.00M-327.00M
Net Income Common Stockholders
68.00M85.00M-11.00M-37.00M-102.00M-225.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
686.00M740.00M609.00M761.00M918.00M378.00M
Total Assets
6.48B6.15B4.99B4.50B4.24B3.55B
Total Debt
0.004.47B3.46B2.93B2.85B2.61B
Net Debt
4.11B3.73B2.85B2.17B1.93B2.23B
Total Liabilities
5.91B5.55B4.49B3.99B3.71B3.24B
Stockholders Equity
570.00M604.00M507.00M509.00M530.00M310.00M
Cash FlowFree Cash Flow
-234.00M-158.00M-348.00M-230.00M153.00M-573.00M
Operating Cash Flow
-60.00M-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 Flow
307.00M288.00M199.00M75.00M391.00M156.00M

Frontier Group Holdings Technical Analysis

Technical Analysis Sentiment
Negative
Last Price3.96
Price Trends
50DMA
3.79
Positive
100DMA
5.73
Negative
200DMA
5.67
Negative
Market Momentum
MACD
0.04
Negative
RSI
50.58
Neutral
STOCH
52.04
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ULCC, the sentiment is Negative. The current price of 3.96 is below the 20-day moving average (MA) of 3.99, above the 50-day MA of 3.79, and below the 200-day MA of 5.67, indicating a neutral trend. The MACD of 0.04 indicates Negative momentum. The RSI at 50.58 is Neutral, neither overbought nor oversold. The STOCH value of 52.04 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
74
Outperform
$633.17M11.979.46%2.24%-20.24%
66
Neutral
$4.48B12.245.32%248.54%4.09%-12.10%
65
Neutral
$547.04M13.0214.19%-7.43%-62.49%
62
Neutral
$920.17M13.3912.71%5.99%
57
Neutral
$1.01B-17.12%1.04%1.54%-466.46%
48
Neutral
$1.85B-11.30%-3.02%66.90%
45
Neutral
$162.41M
-5.34%-125.18%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ULCC
Frontier Group Holdings
3.96
-1.47
-27.07%
ALGT
Allegiant Travel Company
56.38
3.23
6.08%
JBLU
JetBlue Airways
5.03
-0.46
-8.38%
VLRS
Controladora Vuela Compania de Aviacion SAB de CV
4.75
-2.42
-33.75%
AZULQ
Azul SA
0.52
-4.98
-90.55%
SNCY
Sun Country Airlines Holdings
11.70
1.20
11.43%

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.

Business Operations and StrategyFinancial Disclosures
Frontier Group Holdings Lowers Q1 2025 Revenue Guidance
Negative
Apr 10, 2025

Frontier Group Holdings has updated its guidance for the first quarter of 2025, expecting a revenue growth of approximately five percent, which is lower than anticipated due to weakened demand in March. The company has responded by reducing scheduled capacity in the second quarter and focusing on maximizing liquidity through cost management. Preliminary results indicate a first-quarter adjusted pre-tax loss margin of about five percent and an adjusted net loss per share between $0.20 and $0.24. Total liquidity as of March 31, 2025, was approximately $885 million.

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.