A month has passed since Allegiant Travel’s last revenue report (ALGT – Free report). Stocks lost around 5.3% during that time, underperforming the S&P 500.
Will the recent negative trend continue until its next results release, or is Allegiant Travel likely to have a breakthrough? Before we dive into how investors and analysts have reacted in recent times, let’s take a quick look at his latest earnings report to better understand the important catalysts.
Allegiant Reports Larger Than Expected First Quarter Loss
Allegiant incurred a first quarter 2021 loss (excluding $ 4.00 non-recurring items) of $ 3.58 per share, larger than Zacks’ consensus estimate of a loss of 3. $ 17. Results were affected by weak demand for air travel induced by the coronavirus. However, sentiments were optimistic in the quarter of last year, when the company posted earnings of $ 2.05 per share.
Additionally, operating revenue of $ 279.1 million fell 31.8% year-over-year and missed Zacks’ consensus estimate of $ 284.3 million. The downside was due to the 32.3% drop in passenger revenues, which accounted for the bulk (92%) of turnover.
Quarter in detail
Air traffic (measured in revenue passenger miles or RPMs) for scheduled service decreased by 25.9% in the quarter under review. Capacity (measured in available seat miles or ASM) was down 1.1% year over year. As a result, load factor (percentage of seats occupied by passengers) deteriorated by 1,850 basis points to 55.3% in the quarter under review, as falling traffic offset the contraction in capacity.
The operating cost per available seat mile (CASM) excluding fuel was down 60.3% year-over-year. The average fuel cost per gallon (forecast) decreased 0.5% to $ 1.86 in the quarter. Additionally, total scheduled passenger revenue per available seat mile (TRASM) fell 30.8% to 6.89 cents.
As at March 31, 2021, Allegiant Travel’s cash and unrestricted investments were $ 301.6 million, compared to $ 152.8 million at the end of December 2020. up 1.2% from at end-2020 levels.
Second trimester expectations
For the second quarter, ASM (for regular service as well as for the total system) is expected to increase by 2% to 6% compared to the figures for the second quarter of 2019.
Revenues from regular services (excluding fixed fees and other revenues) are expected to decline by 6-10% compared to the figures for the second quarter of 2019.
The fuel cost per gallon should be $ 1.99.
For 2021, aircraft, engine and induction costs remain unchanged from its previous expectations of $ 115 million to $ 125 million.
The capitalized Airbus deferred heavy maintenance is held unchanged from its previous expectation of $ 50-60 million.
Further capital expenditures are now planned between $ 40 million and $ 50 million (previous forecast: $ 20 to 30 million).
Interest expense is now expected to be in the range of $ 65 million to $ 70 million (previous forecast: $ 50 to 55 million).
How have the estimates evolved since then?
It turns out that revised estimates have trended upward over the past month. The consensus estimate has changed by 249.59% due to these changes.
Right now, Allegiant Travel has a good growth score of B, although it lags a bit behind the Momentum score front with a C. Tracing a somewhat similar path, the action received a rating. of B on the value side, which puts it in the top 40% for this investment strategy.
Overall, the stock has an overall VGM score of B. If you’re not focused on a strategy, this score is the one you should be interested in.
Estimates have trended higher for the stock, and the magnitude of these revisions looks promising. Notably, Allegiant Travel has a Zacks Rank # 3 (Hold). We expect the stock to come back online in the coming months.