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Controladora Vuela Compania de Aviacion SAB de CV (VLRS)
NYSE:VLRS
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Controladora Vuela Compania de Aviacion SAB de CV
(NYSE:VLRS)
59Neutral
Positive Factors
Financial Performance
Volaris is trading on a 2025 FCF yield of 75%, based on Citi's estimates.
Growth Potential
Management currently expects mid-teens growth for the next few years with capacity expected to exceed 2023 levels in the second half of 2025.
Operational Efficiency
Operating expenses came in 3% below estimates with operating income of $126mm beating estimates by 33%.
Negative Factors
Economic Uncertainty
Near-term volatility and economic uncertainty have been difficult for the region's airline stocks, including Volaris.
Market Competition
The main competitor in the domestic market is planning for robust levels of growth, which could further weigh on pricing.
Market Demand
There is softness in VFR traffic on transborder US routes attributed to geopolitical uncertainty.
Controladora Vuela Compania de Aviacion SAB de CV (VLRS) vs. S&P 500 (SPY)
Market Cap
$536.07M
Dividend YieldN/A
Average Volume (3M)1.04M
Price to Earnings (P/E)4.0
Beta (1Y)1.13
Revenue Growth-3.62%
EPS Growth1459.83%
CountryUS
Employees6,901
SectorIndustrials
Sector Strength66
IndustryAirlines, Airports & Air Services
Share Statistics
EPS (TTM)1.09
Shares Outstanding116,597,670
10 Day Avg. Volume1,159,508
30 Day Avg. Volume1,038,125
Financial Highlights & Ratios
PEG Ratio0.00273
Price to Book (P/B)N/A
Price to Sales (P/S)0.20
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$12.23Price Target Upside180.50% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
Controladora Vuela Compania de Aviacion SAB de CV Business Overview & Revenue Model
Company DescriptionControladora Vuela Compañía de Aviación, S.A.B. de C.V., through its subsidiaries, Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V., provides air transportation services for passengers, cargo, and mail in Mexico and internationally. The company operates approximately 410 daily flights on routes connecting 43 cities in Mexico, 22 cities in the United States, and 3 cities in Central America. As of December 31, 2020, it operated through a fleet of 86 aircraft. The company also offers merchandising, recruitment and payroll, travel agency, and loyalty program services. Controladora Vuela Compañía de Aviación, S.A.B. de C.V. was incorporated in 2005 and is headquartered in Mexico City, Mexico.
How the Company Makes MoneyVolaris generates revenue through multiple streams, with the primary source being passenger ticket sales. The company employs a low-cost carrier model, allowing it to offer competitive fares by optimizing operational efficiencies and maintaining a high aircraft utilization rate. Additional revenue is derived from ancillary services, which include baggage fees, seat selection, in-flight sales, and other add-ons that enhance the travel experience. The airline also benefits from partnerships and alliances with other travel-related businesses, contributing to its overall profitability.
Controladora Vuela Compania de Aviacion SAB de CV Financial Statement Overview
Summary
Controladora Vuela shows strong operational efficiency and robust cash flow generation, with improved gross profit margins. However, high leverage remains a financial risk, and there is room to enhance profitability.Income Statement
Controladora Vuela has shown a stable revenue trend with recent total revenue of $3.14 billion, although there was a decline from the previous year. The company has improved its gross profit margin to 35.28%, indicating better cost management. The net profit margin stands at 4.01%, showing profitability but with room for improvement. EBIT and EBITDA margins are strong, reflecting efficient operational management.65
Positive
Balance Sheet
The debt-to-equity ratio remains high at 10.61, indicating significant leverage, which poses a financial risk. However, the equity ratio has improved to 6.4%, suggesting better equity financing. ROE at 34.52% reflects efficient use of equity to generate profits, but the high leverage is a concern.55
Neutral
Cash Flow
Free cash flow has seen significant growth, and the company has robust operating cash flow, exceeding net income, indicating strong cash generation capabilities. The free cash flow to net income ratio is favorable, highlighting efficient cash management.70
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 3.14B | 3.26B | 2.85B | 2.18B | 1.11B | Gross Profit |
| 1.11B | 505.20M | 246.00M | 544.61M | 12.77M | EBIT |
| 413.00M | 222.71M | 34.00M | 74.03M | ― | EBITDA |
| 1.01B | 722.52M | 477.05M | 600.99M | 143.59M | Net Income Common Stockholders |
| 126.00M | 7.82M | -30.00M | 106.45M | ― |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 954.00M | 776.48M | 704.98M | 745.38M | 507.82M | Total Assets |
| 5.70B | 5.15B | 4.52B | 4.01B | 3.43B | Total Debt |
| 3.87B | 3.54B | 2.98B | 2.73B | 2.49B | Net Debt |
| 2.96B | 2.78B | 2.28B | 1.99B | 1.98B | Total Liabilities |
| 5.34B | 4.90B | 4.24B | 3.69B | 3.29B | Stockholders Equity |
| 365.00M | 242.59M | 277.00M | 319.16M | 140.54M |
| Cash Flow | Free Cash Flow | |||
| 1.09B | 238.69M | 260.06M | 580.97M | 67.30M | Operating Cash Flow |
| 1.09B | 729.83M | 614.00M | 775.38M | 243.28M | Investing Cash Flow |
| -472.00M | -462.04M | -131.00M | ― | ― | Financing Cash Flow |
| -472.00M | -214.39M | -513.00M | ― | ― |
Controladora Vuela Compania de Aviacion SAB de CV Technical Analysis
Negative
4.36
Price Trends
6.05
Negative
7.10
Negative
6.78
Negative
Market Momentum
-0.44
Positive
26.91
Positive
10.46
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VLRS, the sentiment is Negative. The current price of 4.36 is below the 20-day moving average (MA) of 5.06, below the 50-day MA of 6.05, and below the 200-day MA of 6.78, indicating a bearish trend. The MACD of -0.44 indicates Positive momentum. The RSI at 26.91 is Positive, neither overbought nor oversold. The STOCH value of 10.46 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VLRS.
Controladora Vuela Compania de Aviacion SAB de CV Risk Analysis
Controladora Vuela Compania de Aviacion SAB de CV disclosed 70 risk factors in its most recent earnings report. Controladora Vuela Compania de Aviacion SAB de CV 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
Controladora Vuela Compania de Aviacion SAB de CV Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $1.48B | 55.88 | 1.92% | ― | -5.25% | -49.90% | |
63 Neutral | $4.29B | 11.05 | 5.73% | 232.30% | 4.75% | -5.69% | |
61 Neutral | $721.74M | 8.60 | 15.12% | ― | 5.18% | ― | |
60 Neutral | $472.04M | 9.28 | 9.75% | ― | 2.49% | -22.41% | |
59 Neutral | $536.07M | 3.98 | 41.49% | ― | -3.62% | 1459.83% | |
50 Neutral | $809.82M | ― | -19.93% | 5.43% | 0.11% | -311.73% | |
41 Neutral | $237.44M | 28.86 | 26.01% | ― | ― | ― |
* Industrials Sector Average
Performance Comparison
VLRS
Controladora Vuela Compania de Aviacion SAB de CV
4.36
-3.66
-45.64%
ATSG
Air Transport Services
22.48
9.65
75.21%
ALGT
Allegiant Travel Company
44.16
-17.40
-28.27%
SNCY
Sun Country Airlines Holdings
8.88
-6.17
-41.00%
ULCC
Frontier Group Holdings
3.17
-3.94
-55.41%
FLYX
flyExclusive
2.96
-1.68
-36.21%
Controladora Vuela Compania de Aviacion SAB de CV Earnings Call Summary
Earnings Call Date: Feb 24, 2025 | % Change Since: -43.89% | Next Earnings Date: Apr 28, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a balanced sentiment with significant achievements in financial performance, ancillary revenue growth, and operational reliability. However, the company faces challenges with engine inspections, geopolitical factors, and cost pressures.Highlights
Strong Financial Performance
Volaris reported a net profit each quarter of 2024 and achieved a full-year EBITDAR margin of 36%. The company generated over $300 million in operating cash flow and increased its year-ending liquidity to $954 million.
Ancillary Revenue Growth
Ancillary revenues rose to record levels, accounting for more than 50% of total revenues. Ancillaries per passenger increased by 15%, driven by programs like V.pass and V.club.
Operational Reliability and Customer Satisfaction
Volaris achieved a 99.5% scheduled reliability and an 83% on-time performance rate. The company also received a Net Promoter Score of 37.4%, outperforming low-cost carriers in the United States.
Sustainability Achievements
Despite challenges, fuel consumption increased by less than 3%, and CO2 emissions per RPK remained consistent. Volaris was recognized in the Dow Jones best-in-class for the third consecutive year.
Fleet Expansion and Efficiency
Volaris took delivery of 6 aircraft in Q4 2024 and expects 90% of its fleet to operate with NEO technology by 2030. This transition aims to reduce ownership costs and improve fuel efficiency.
Lowlights
Impact of GTF Engine Inspections
The GTF engine inspections led to a significant reduction in fleet capacity by more than 30%. This affected operational efficiency and required a mitigation plan to manage the situation.
Revenue and RASM Pressures
Total operating revenues for Q4 2024 were $835 million, a 7% decline compared to the previous year. Additionally, TRASM for Q1 2025 is expected to decline by 15% year-over-year due to geopolitical factors and FX headwinds.
Geopolitical and Economic Challenges
US-Mexico VFR traffic showed softness due to geopolitical uncertainty following the US Presidential Elections. The Mexican peso depreciated by 20% against the US dollar, impacting costs and revenues.
Cost Pressures and Redelivery Expenses
CASM ex-fuel increased by 17% in Q4 2024 due to maintenance events and redelivery expenses. A one-time cost of approximately $100 million is expected in 2025 related to redelivery accruals.
Company Guidance
During the Volaris Fourth Quarter and Full Year 2024 Financial Results Conference Call, the company provided several key metrics and guidance for 2025. Despite challenges from engine inspections and aircraft groundings, Volaris achieved a 36% EBITDAR margin and a net profit in each quarter of 2024. The airline carried 29.5 million passengers with a total revenue of $3.1 billion, maintaining stability despite a 13% reduction in available seat miles (ASMs). Ancillary revenues accounted for over 50% of total revenues, with a record $55 per passenger driven by a 15% increase in ancillary sales. Volaris achieved a 99.5% scheduled reliability and 83% on-time performance. The Net Promoter Score reached 37.4%, significantly outperforming low-cost carriers in the U.S. Looking ahead, Volaris anticipates a 13% growth in ASMs for 2025 and expects an EBITDAR margin between 34% and 36%. The company plans to continue optimizing aircraft returns, managing new aircraft arrivals, and balancing scheduled engine removals to sustain fleet availability. Volaris projects a $0.003 impact on CASM ex-fuel due to a one-time cost of approximately $100 million for redelivery accruals and related maintenance in 2025.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.