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Controladora Vuela Compania de Aviacion SAB de CV
(NYSE:VLRS)
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Rating:51Neutral
Price Target:
$8.00
▲(4.99% Upside)
Action:Reiterated
Date:07/29/26
Overall score reflects high financial risk from extreme leverage and currently weak profitability, partially offset by strong operating/free cash flow and a more constructive earnings outlook (reinstated margin guidance and improving unit revenue expectations). Technicals are mixed and valuation is constrained by ongoing losses and no indicated dividend support.
Positive Factors
Ancillary revenue & loyalty
Volaris’ ULCC model derives a majority of revenue from ancillaries and a large loyalty base, creating high-margin, recurring revenue streams less tied to base fares. This structural mix improves revenue resilience, supports unit economics, and enables upsell monetization (e.g., Starlink) over multiple years.
Negative Factors
Very high leverage
Extremely thin equity and heavy debt burden materially limit financial flexibility and increase refinancing, covenant and interest rate risk. Sustained earnings weakness or another adverse shock could impair ability to invest or restructure, making capital structure a persistent, multi-month strategic constraint.
Read all positive and negative factors
Positive Factors
Negative Factors
Ancillary revenue & loyalty
Volaris’ ULCC model derives a majority of revenue from ancillaries and a large loyalty base, creating high-margin, recurring revenue streams less tied to base fares. This structural mix improves revenue resilience, supports unit economics, and enables upsell monetization (e.g., Starlink) over multiple years.
Read all positive factors
Controladora Vuela Compania de Aviacion SAB de CV (VLRS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$830.35M
Dividend YieldN/A
Average Volume (3M)697.46K
Price to Earnings (P/E)―
Beta (1Y)1.21
Revenue Growth9.97%
EPS Growth-472.97%
CountryUS
Employees7,098
SectorIndustrials
Sector Strength72
IndustryAirlines, Airports & Air Services
Share Statistics
EPS (TTM)-1.63
Shares Outstanding116,597,670
10 Day Avg. Volume689,281
30 Day Avg. Volume697,462
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)3.88
Price to Sales (P/S)0.34
P/FCF Ratio1.36
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$9.85Price Target Upside29.27% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)-1.71
Revenue Forecast (FY)$3.60B
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., operating through its subsidiaries such as Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V., offers comprehensive air transportation for individuals, cargo, and postal shipments wi...
How the Company Makes Money
VLRS makes money primarily by selling airline tickets for scheduled passenger flights, with fares typically structured to offer a low base price and charge separately for optional services. Key revenue streams include: (1) Passenger ticket revenue...
Controladora Vuela Compania de Aviacion SAB de CV Earnings Call Summary
Earnings Call Date:Jul 21, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 28, 2026
Earnings Call Sentiment Positive
The call presented a mixed but overall constructive picture: management successfully navigated an extreme fuel environment through disciplined capacity, pricing and operational actions that produced strong top-line growth (revenues +24%, TRASM +22%), improved liquidity (+$58M), better fuel efficiency and outperformance on EBITDAR versus guidance, and they reinstated full-year margin guidance (23%). Significant challenges remain—especially the sharp YoY fuel cost increase (~70%), elevated CASM (+31%), Q2 net loss ($127M), ongoing maintenance/redelivery costs and near-term AOGs—that weigh on profitability. On balance, the highlights (robust revenue and unit revenue performance, cash build, margin resilience and clear recovery plan) meaningfully outweigh the lowlights, though results are sensitive to fuel and FX trends.Positive Updates
Revenue and TRASM Growth
Total operating revenues of $859 million in Q2, up 24% year-over-year on only 2% capacity growth; TRASM increased 22% year-over-year to $0.095 (record second quarter TRASM) and Q3 TRASM guidance of ~$0.099 (14% YoY, +4% sequential).
Negative Updates
Sharp Increase in Fuel Costs
Economic jet fuel cost per gallon increased ~70% year-over-year, driving a ~$137 million incremental fuel expense impact in Q2 and ~$175 million impact in H1; fuel was the dominant headwind to profitability.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue and TRASM Growth
Total operating revenues of $859 million in Q2, up 24% year-over-year on only 2% capacity growth; TRASM increased 22% year-over-year to $0.095 (record second quarter TRASM) and Q3 TRASM guidance of ~$0.099 (14% YoY, +4% sequential).
Read all positive updates
Company Guidance
Volaris guided Q3 2026 ASM growth of approximately 10% (front‑loaded into July/August), TRASM of about $0.099 (≈+4% sequential, +14% YoY), CASM ex‑fuel of roughly $0.0635 and an EBITDAR margin near 22%, assuming U.S. Gulf Coast jet fuel ≈ $3.50/gal and FX ≈ MXN17.6/USD. For full‑year 2026 management reinstated an EBITDAR margin of ~23%, expects ASM growth of ~5%, CapEx of ~ $350M and a full‑year jet fuel assumption of ≈ $3.20/gal (FX ≈ MXN17.6/USD), with Q4 TRASM expected above Q3 and AOGs to remain in the low‑to‑mid‑20s near term. They also highlighted fleet and balance‑sheet benefits: current fleet of 155, contractual fleet targeted at ~137 by end‑2027, a reduction in lease liabilities from about $3.2B to $2.8B and roughly $50M of annual lease savings to support stronger margins and free cash flow.Controladora Vuela Compania de Aviacion SAB de CV Financial Statement Overview
Summary
Income Statement
38
Negative
Balance Sheet
19
Very Negative
Cash Flow
62
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.29B | 3.04B | 3.14B | 3.26B | 2.85B | 2.20B |
| Gross Profit | 125.84M | 173.84M | 515.50M | 505.20M | 245.50M | 548.84M |
| EBITDA | 593.12M | 850.27M | 1.07B | 721.02M | 477.05M | 600.99M |
| Net Income | -187.87M | -103.87M | 126.38M | 7.82M | -80.22M | 106.45M |
Balance Sheet | ||||||
| Total Assets | 5.86B | 5.64B | 5.70B | 5.15B | 4.47B | 4.01B |
| Cash, Cash Equivalents and Short-Term Investments | 817.14M | 774.00M | 945.18M | 776.48M | 711.85M | 745.41M |
| Total Debt | 3.86B | 3.86B | 3.87B | 3.54B | 2.98B | 2.73B |
| Total Liabilities | 5.79B | 5.37B | 5.34B | 4.90B | 4.23B | 3.69B |
| Stockholders Equity | 68.00M | 263.00M | 364.81M | 242.59M | 234.74M | 314.95M |
Cash Flow | ||||||
| Free Cash Flow | 563.01M | 750.00M | 506.65M | 238.69M | 259.67M | 589.17M |
| Operating Cash Flow | 917.79M | 750.00M | 1.09B | 729.83M | 613.60M | 785.36M |
| Investing Cash Flow | -164.13M | -89.00M | -472.00M | -462.04M | -130.69M | -134.65M |
| Financing Cash Flow | -789.04M | -819.00M | -472.00M | -214.39M | -513.09M | -435.18M |
Controladora Vuela Compania de Aviacion SAB de CV Technical Analysis
Negative
7.62
Price Trends
8.24
Negative
7.81
Negative
8.04
Negative
Market Momentum
-0.17
Positive
34.31
Neutral
2.55
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 7.62 is below the 20-day moving average (MA) of 7.85, below the 50-day MA of 8.24, and below the 200-day MA of 8.04, indicating a bearish trend. The MACD of -0.17 indicates Positive momentum. The RSI at 34.31 is Neutral, neither overbought nor oversold. The STOCH value of 2.55 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
54 Neutral | $20.26B | 24.03 | 11.27% | 1.60% | 9.46% | 137.74% | |
52 Neutral | $1.85B | -1.97 | -45.51% | ― | 3.99% | -119.13% | |
51 Neutral | $830.35M | -4.26 | -93.84% | ― | 9.97% | -472.97% | |
50 Neutral | $2.13B | 56.18 | 2.10% | ― | 12.24% | ― | |
50 Neutral | $1.38B | -3.41 | -120.34% | ― | 9.95% | -1057.36% |
* Industrials Sector Average
VLRS
Controladora Vuela Compania de Aviacion SAB de CV
6.84
0.97
16.52%
ALGT
Allegiant Travel Company
76.41
20.51
36.69%
JBLU
JetBlue Airways
4.74
-0.34
-6.69%
LUV
Southwest Airlines
39.89
9.39
30.80%
ULCC
Frontier Group Holdings
5.76
1.61
38.80%
Controladora Vuela Compania de Aviacion SAB de CV Corporate Events
Volaris Releases 2025 Sustainability Report Under IFRS S1 and S2
Jul 22, 2026
On July 22, 2026, Volaris announced it had released its 2025 Sustainability Report prepared under IFRS S1 and IFRS S2, covering the period from January 1 to December 31, 2025 in line with Mexican regulatory requirements. The unaudited report, avai...
Volaris Posts Record Q2 2026 Metrics and Details Conservative Derivatives Strategy
Jul 21, 2026
On July 21, 2026, Volaris reported its second-quarter 2026 results, highlighting record TRASM and a strong cash position, and concurrently detailed its approach to managing financial risks through derivatives. Management emphasized that all deriva...
Volaris Posts Strong June 2026 Traffic With Growing International Demand
Jul 8, 2026
On July 7, 2026, Volaris reported preliminary traffic figures for June 2026, highlighting solid growth in activity despite a challenging fuel-cost environment. The ultra-low-cost carrier transported 2.7 million passengers in June, with total avail...
Volaris Announces June 15 Board Resignation of Director Andrew Broderick
Jun 16, 2026
Volaris, the ultra-low-cost airline listed on the NYSE and BMV, focuses on providing low-fare, point-to-point air service across Mexico, the United States, Central and South America, targeting price-sensitive leisure, business and visiting-friends...
Volaris Lifts May Load Factor to 86% on Strong International Demand
Jun 3, 2026
On June 3, 2026, Volaris reported its preliminary traffic figures for May 2026, highlighting a network increasingly tilted toward international growth. The carrier transported 2.7 million passengers in the month as total revenue passenger miles ro...
Volaris Boosts April Load Factor to 85% as It Cuts Domestic Capacity, Shifts to Transborder Routes
May 7, 2026
On May 6, 2026, Volaris reported its preliminary traffic results for April 2026, showing that consolidated load factor rose 2.9 percentage points year over year to 84.6% as the airline carried 2.7 million passengers. Capacity measured in available...
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.