Controladora Vuela Compania de Aviacion SAB de CV (VLRS) AI Stock Analysis

• Market Cap: $879.60M
• Dividend Yield: N/A
• Average Volume (3M): 412.15K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.02
• Revenue Growth: -6.55%
• EPS Growth: -133.03%
• Country: US
• Employees: 6,901
• Sector: Industrials
• Sector Strength: 72
• Industry: Airlines, Airports & Air Services
• EPS (TTM): 0.05
• Shares Outstanding: 116,597,670
• 10 Day Avg. Volume: 322,575
• 30 Day Avg. Volume: 412,147
• PEG Ratio: <0.01
• Price to Book (P/B): 2.35
• Price to Sales (P/S): 0.27
• P/FCF Ratio: 1.69
• Enterprise Value/Market Cap: 4.43
• Enterprise Value/Revenue: 1.30
• Enterprise Value/Gross Profit: 10.17
• Enterprise Value/Ebitda: 6.87
• 1Y Price Target: $9.13
• Price Target Upside: 16.90% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): -0.78
• Revenue Forecast (FY): $3.05B

• Rating: 56 Neutral
• Price Target: $7.50 ▼(-3.97% Downside)

VLRS's overall stock score is primarily impacted by financial challenges, including high leverage and negative profitability. Technical analysis shows positive momentum, but valuation concerns due to a negative P/E ratio and lack of dividend yield weigh heavily. The earnings call provided a balanced view with some positive operational metrics, but highlighted ongoing challenges.

Positive Factors

Ancillary Revenue Growth

Consistent growth in ancillary revenue demonstrates Volaris' ability to enhance its earnings through additional services, strengthening its low-cost model.

Cost Efficiency

Effective cost management supports operational sustainability, allowing Volaris to maintain competitive pricing and improve margins over time.

Loyalty Program Expansion

Expanding loyalty and ancillary programs can enhance customer retention and increase revenue streams, supporting long-term growth and market position.

Negative Factors

High Leverage

High leverage poses financial risks, limiting flexibility and increasing vulnerability to economic downturns, impacting long-term financial stability.

Declining Revenue Growth

Declining revenue growth indicates challenges in maintaining sales momentum, potentially affecting future profitability and market competitiveness.

Aircraft Groundings

Aircraft groundings reduce operational capacity and can lead to revenue loss, impacting service reliability and customer satisfaction over time.

Controladora Vuela Compania de Aviacion SAB de CV Business Overview & Revenue Model

Company Description

Controladora 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 Money

Volaris generates revenue through multiple streams, primarily from ticket sales of its scheduled flights. The airline operates on a low-cost model, enabling it to offer competitive fares while charging additional fees for services such as baggage, seat selection, and onboard refreshments. Ancillary revenues from these additional services significantly contribute to the company's earnings. Furthermore, the company benefits from partnerships with travel agencies and online booking platforms, enhancing its market reach. Other revenue sources may include cargo transportation and potential codeshare agreements with other airlines, which allow it to expand its service offerings and customer base without extensive capital investment.

Controladora Vuela Compania de Aviacion SAB de CV Financial Statement Overview

Summary

VLRS faces significant financial challenges with declining revenue growth and profitability issues. The balance sheet shows high leverage and financial risk, though cash flow management is relatively stable.

Income Statement

The income statement shows mixed results. The company has experienced a significant decline in revenue growth rate in the TTM period, indicating potential challenges in maintaining sales momentum. Gross profit margin is relatively low, and the net profit margin has turned negative, reflecting profitability issues. However, the EBIT and EBITDA margins are positive, suggesting some operational efficiency.

Balance Sheet

The balance sheet reveals high leverage with a debt-to-equity ratio significantly above industry norms, posing financial risk. The return on equity is negative in the TTM period, indicating challenges in generating returns for shareholders. The equity ratio is low, suggesting reliance on debt financing. These factors highlight potential financial instability.

Cash Flow

Cash flow analysis shows a decline in free cash flow growth, but the company maintains a positive operating cash flow to net income ratio, indicating some ability to generate cash from operations. The free cash flow to net income ratio is favorable, suggesting efficient cash management despite profitability challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.99B	3.14B	3.26B	2.85B	2.20B	1.07B
Gross Profit	383.00M	1.11B	505.20M	245.50M	548.84M	-26.02M
EBITDA	567.00M	1.07B	722.52M	477.05M	600.99M	143.59M
Net Income	-62.00M	126.00M	7.82M	-80.22M	106.45M	-191.72M
Balance Sheet
Total Assets	5.70B	5.70B	5.15B	4.47B	4.01B	3.43B
Cash, Cash Equivalents and Short-Term Investments	785.58M	945.18M	776.48M	711.85M	745.41M	507.82M
Total Debt	3.87B	3.87B	3.54B	2.98B	2.73B	2.49B
Total Liabilities	5.44B	5.34B	4.90B	4.23B	3.69B	3.29B
Stockholders Equity	262.00M	364.81M	242.59M	234.74M	314.95M	140.54M
Cash Flow
Free Cash Flow	531.02M	506.65M	238.69M	259.67M	589.17M	50.81M
Operating Cash Flow	755.27M	1.09B	729.83M	613.60M	785.36M	213.75M
Investing Cash Flow	-176.68M	-472.00M	-462.04M	-130.69M	-134.65M	-3.15M
Financing Cash Flow	-585.83M	-472.00M	-214.39M	-513.09M	-435.18M	-129.57M

Controladora Vuela Compania de Aviacion SAB de CV Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 7.81
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VLRS, the sentiment is Positive. The current price of 7.81 is above the 20-day moving average (MA) of 7.11, above the 50-day MA of 6.92, and above the 200-day MA of 5.66, indicating a bullish trend. The MACD of 0.28 indicates Negative momentum. The RSI at 64.80 is Neutral, neither overbought nor oversold. The STOCH value of 60.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VLRS.

Controladora Vuela Compania de Aviacion SAB de CV Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SNCY	74 Outperform	$784.39M	14.16	9.99%	―	4.27%	28.47%
LUV	66 Neutral	$20.60B	60.70	4.22%	1.75%	0.65%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
ALGT	58 Neutral	$1.51B	―	-25.37%	―	3.29%	-983.31%
VLRS	56 Neutral	$879.60M	―	-21.74%	―	-6.55%	-133.03%
JBLU	51 Neutral	$1.83B	―	-19.09%	―	-2.49%	47.88%
ULCC	50 Neutral	$1.33B	―	-27.87%	―	1.77%	-1964.48%

Controladora Vuela Compania de Aviacion SAB de CV Corporate Events

Volaris Reports Strong November 2025 Traffic Results

On December 4, 2025, Volaris reported its November 2025 traffic results, highlighting a 5.8% increase in ASM capacity and a 3.9% growth in RPMs. Despite a slight year-over-year decrease in the consolidated load factor to 85.3%, the company transported 2.7 million passengers. The results reflect a recovery in cross-border traffic and stable domestic demand, positioning Volaris well for 2026. The company’s strategy appears effective, as indicated by the positive trends in travel sentiment, especially in the cross-border market.

Volaris Reports Strong October 2025 Traffic with 86% Load Factor

On November 5, 2025, Volaris reported its October 2025 traffic results, highlighting a load factor of 85.9%. The airline experienced a 1.1% increase in available seat miles (ASM) capacity, while revenue passenger miles (RPM) saw a slight decline of 0.6%. Despite a decrease in domestic RPMs by 1.9%, international RPMs rose by 1.4%. Volaris transported 2.6 million passengers in October. The results indicate strong travel sentiment and a return to sales levels similar to the previous year, positioning the company well for sustainable value delivery.

Volaris Reports Strong Q3 2025 Financial Results with 33.6% EBITDAR Margin

On October 27, 2025, Volaris announced its financial results for the third quarter of 2025, reporting an EBITDAR margin of 33.6%. The company employs a conservative hedging policy to manage financial risks related to fuel price fluctuations, foreign currency, and interest rate variations. These strategies aim to mitigate potential adverse effects on earnings and working capital, ensuring stable operations amidst market uncertainties.

Volaris Unveils 2024 Integrated Annual Report

On October 7, 2025, Volaris released its 2024 Integrated Annual Report titled ‘The Art of Transformation: Folding a Sustainable Future.’ The report, which is available on the company’s Investor Relations webpage, provides insights into Volaris’ strategic focus and operational highlights, although it does not include audited financial information or future performance predictions. This release underscores Volaris’ commitment to transparency and sustainability, potentially impacting its market position and stakeholder engagement.

Volaris Reports September 2025 Traffic Results with 83% Load Factor

On October 7, 2025, Volaris reported its September 2025 traffic results, noting a load factor of 83.4%, a slight decrease from the previous year. The airline experienced a 2.9% increase in available seat miles and a 1.0% rise in revenue passenger miles, despite a decline in international RPMs. Volaris transported 2.4 million passengers in September, with domestic demand remaining stable and international traffic showing resilience. The company is optimistic about market conditions improving by year-end, despite challenges such as delayed aircraft deliveries.