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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)
Rating:65Neutral
Price Target:
$5.00
▲(0.20%Upside)
Positive Factors
Cash Position
The company has a strong cash position, which is expected to help it navigate the current challenging period.
Partnerships
Volaris announced that it will be signing a code-share with Copa for traffic between Mexico and South/Central America.
Traffic Performance
Traffic statistics came in better than expected, leading to an improved estimate for the company's performance.
Negative Factors
Financial Performance
A significant drop in yields and ancillary revenue per passenger has negatively affected the company's revenue metrics.
Macro Uncertainty
Increased macro uncertainty is expected to weigh on the investment case.
Market Challenges
Domestic Mexican market supply issues and uncertain US trade policy create additional challenges for the company.
Controladora Vuela Compania de Aviacion SAB de CV (VLRS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$564.82M
Dividend YieldN/A
Average Volume (3M)1.68M
Price to Earnings (P/E)13.7
Beta (1Y)1.07
Revenue Growth-7.43%
EPS Growth-62.49%
CountryUS
Employees6,901
SectorIndustrials
Sector Strength90
IndustryAirlines, Airports & Air Services
Share Statistics
EPS (TTM)-0.44
Shares Outstanding116,597,670
10 Day Avg. Volume1,033,603
30 Day Avg. Volume1,678,301
Financial Highlights & Ratios
PEG Ratio-0.67
Price to Book (P/B)1.77
Price to Sales (P/S)0.00
P/FCF Ratio0.62
Enterprise Value/Market Cap6.27
Enterprise Value/Revenue0.28
Enterprise Value/Gross Profit6.54
Enterprise Value/Ebitda1.77
Forecast
1Y Price Target
$6.09Price Target Upside22.04% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
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 Earnings Call Summary
Earnings Call Date:Apr 28, 2025
(Q1-2025)
| % Change Since: 6.62%|
Next Earnings Date:Jul 28, 2025
Earnings Call Sentiment Neutral
The call highlighted Volaris' operational strengths and strategic initiatives, including high load factors and strong ancillary revenue contributions. However, it also underscored significant challenges such as declining revenues and EBITDA margins, as well as reduced capacity growth due to geopolitical uncertainties.Q1-2025 Updates
Positive Updates
Strong Ancillary Revenue Contribution
Ancillary revenue accounted for over 50% of total quarterly revenue, supporting the diversified revenue model despite base fare pressures.
High Operational Efficiency
The company reported a scheduled completion rate of 99.6% and an on-time performance of 83.8%, showcasing operational efficiency.
Expansion of Strategic Partnerships
Volaris announced a new codeshare agreement with Copa Airlines, enhancing connectivity between Mexico and Latin America.
Strong Load Factors
Maintained high load factors with 89% in the Mexican domestic market and a consolidated load factor of 85%.
Negative Updates
Significant Decline in Revenue
Total operating revenues decreased by 12% year-over-year, partly due to the 20% depreciation of the Mexican peso against the U.S. dollar.
EBITDA Margin Pressure
First quarter EBITDA was a loss of $10 million, representing a margin of minus 1.5%.
Reduced Capacity Growth
ASM growth guidance was revised down from 13% to 15% to 8% to 9% for the full year 2025 due to geopolitical and economic uncertainties.
Decline in TRASM
TRASM fell by 17% in the quarter to $0.078, driven by currency depreciation and challenging market conditions.
Company Guidance
During the first quarter of 2025, Volaris demonstrated resilience amidst geopolitical and economic uncertainties by delivering results aligned with their guidance. The airline reported a consolidated load factor of 85%, a slight decrease from the previous year, and a domestic load factor of 89%. Despite a 17% decline in TRASM to $0.078, Volaris maintained a competitive edge through fare modulation and ancillary revenue strategies, with ancillary revenue accounting for over 50% of total revenue. The airline's operational metrics remained strong, with an on-time performance of 83.8% and a scheduled completion rate of 99.6%. Volaris revised its ASM growth guidance for 2025 to 8-9%, down from 13-15%, to better align with demand and protect profitability. The company ended the quarter with a total liquidity of $862 million and a net debt-to-EBITDA ratio of 2.7x. Looking forward, Volaris remains focused on flexibility in capacity management and is optimistic about a demand recovery in the second half of the year, supported by its ultra-low-cost carrier model and strategic initiatives.Controladora Vuela Compania de Aviacion SAB de CV Financial Statement Overview
Summary
Volaris exhibits a complex financial profile with improving profitability and strong cash flow management. Despite these strengths, challenges include high leverage and declining revenue growth, posing significant risks that need addressing for sustainable financial health.Income Statement
The company shows a mixed performance with a declining revenue growth trend, dropping from $3.26 billion in 2023 to $3.05 billion in TTM 2025. Gross profit margin has decreased significantly in TTM 2025, indicating potential challenges in maintaining profitability. However, the net profit margin in TTM 2025 has improved to 1.38% from previous losses, showing signs of recovering profitability. EBIT and EBITDA margins have also improved slightly, indicating better cost management.65
Positive
Balance Sheet
The balance sheet reflects high leverage with a debt-to-equity ratio of approximately 12.15 in TTM 2025, which poses a financial risk. Return on equity (ROE) improved to 13.33% in TTM 2025, reflecting better utilization of equity but still constrained by high debt levels. The equity ratio remains low, indicating limited buffer against liabilities.55
Neutral
Cash Flow
Cash flow analysis reveals strong operational cash generation with an operating cash flow to net income ratio of 23.45 in TTM 2025. Free cash flow has shown significant growth compared to previous years, which is a positive indicator for future liquidity and investment capabilities. The company demonstrates efficient cash management despite ongoing challenges.75
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 3.05B | 3.14B | 3.26B | 2.85B | 2.18B | 1.11B | Gross Profit |
| 541.00M | 1.11B | 505.20M | 246.00M | 544.61M | 12.77M | EBIT |
| 299.00M | 413.00M | 222.71M | 34.00M | 74.03M | ― | EBITDA |
| 571.00M | 1.07B | 722.52M | 477.05M | 600.99M | 143.59M | Net Income Common Stockholders |
| 42.00M | 126.00M | 7.82M | -30.00M | 106.45M | ― |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 447.23M | 954.00M | 776.48M | 704.98M | 745.38M | 507.82M | Total Assets |
| 2.91B | 5.70B | 5.15B | 4.52B | 4.01B | 3.43B | Total Debt |
| 2.26B | 3.87B | 3.54B | 2.98B | 2.73B | 2.49B | Net Debt |
| 1.82B | 2.96B | 2.78B | 2.28B | 1.99B | 1.98B | Total Liabilities |
| 3.07B | 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 | ||||
| 907.19M | 1.09B | 238.69M | 260.06M | 580.97M | 67.30M | Operating Cash Flow |
| 985.06M | 1.09B | 729.83M | 614.00M | 775.38M | 243.28M | Investing Cash Flow |
| -381.28M | -472.00M | -462.04M | -131.00M | ― | ― | Financing Cash Flow |
| -495.36M | -472.00M | -214.39M | -513.00M | ― | ― |
Controladora Vuela Compania de Aviacion SAB de CV Technical Analysis
Neutral
4.99
Price Trends
4.51
Positive
5.83
Negative
6.49
Negative
Market Momentum
0.11
Negative
66.37
Neutral
93.22
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VLRS, the sentiment is Neutral. The current price of 4.99 is above the 20-day moving average (MA) of 4.51, above the 50-day MA of 4.51, and below the 200-day MA of 6.49, indicating a neutral trend. The MACD of 0.11 indicates Negative momentum. The RSI at 66.37 is Neutral, neither overbought nor oversold. The STOCH value of 93.22 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 (66)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $624.66M | 12.01 | 9.46% | ― | 2.24% | -20.24% | |
69 Neutral | $1.48B | 55.88 | 1.92% | ― | -5.25% | -49.90% | |
66 Neutral | $4.50B | 12.29 | 5.40% | 248.66% | 4.13% | -12.33% | |
65 Neutral | $564.82M | 13.67 | 14.19% | ― | -7.43% | -62.49% | |
62 Neutral | $913.34M | 13.56 | 12.71% | ― | 5.99% | ― | |
59 Neutral | $1.06B | ― | -17.12% | 1.03% | 1.54% | -466.46% | |
52 Neutral | $234.78M | 28.86 | 26.01% | ― | ― | ― |
* Industrials Sector Average
Performance Comparison
VLRS
Controladora Vuela Compania de Aviacion SAB de CV
4.99
-1.97
-28.30%
ATSG
Air Transport Services
22.48
9.67
75.49%
ALGT
Allegiant Travel Company
57.17
4.19
7.91%
SNCY
Sun Country Airlines Holdings
11.88
1.28
12.08%
ULCC
Frontier Group Holdings
3.99
-1.27
-24.14%
FLYX
flyExclusive
2.77
-1.53
-35.58%
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.