Core Insights - Allegiant Travel Company reported a significant increase in passenger traffic for March 2025, with a total of 1,887,902 passengers, representing a 14.4% increase compared to March 2024 [2] - The company also experienced growth in revenue passenger miles (RPM) and available seat miles (ASM), with RPM increasing by 15.9% and ASM by 20.7% year-over-year [2] - The load factor decreased by 3.5 percentage points to 82.4%, indicating a slight decline in seat occupancy [2] Scheduled Service – Year Over Year Comparison - March 2025 passengers: 1,887,902 vs. March 2024: 1,649,826, a change of 14.4% [2] - Revenue passenger miles (000): March 2025: 1,819,246 vs. March 2024: 1,569,978, a change of 15.9% [2] - Available seat miles (000): March 2025: 2,206,943 vs. March 2024: 1,828,212, a change of 20.7% [2] - Load factor: March 2025: 82.4% vs. March 2024: 85.9%, a decrease of 3.5 percentage points [2] - Departures: March 2025: 13,407 vs. March 2024: 11,075, an increase of 21.1% [2] - Average stage length (miles): March 2025: 940 vs. March 2024: 930, an increase of 1.1% [2] 1st Quarter 2025 Results - Passengers: 4,420,811 in Q1 2025 vs. 4,069,519 in Q1 2024, an increase of 8.6% [4] - Revenue passenger miles (000): Q1 2025: 4,271,328 vs. Q1 2024: 3,883,810, an increase of 10.0% [4] - Available seat miles (000): Q1 2025: 5,305,191 vs. Q1 2024: 4,636,922, an increase of 14.4% [4] - Load factor: Q1 2025: 80.5% vs. Q1 2024: 83.8%, a decrease of 3.3 percentage points [4] - Departures: Q1 2025: 32,133 vs. Q1 2024: 28,177, an increase of 14.0% [4] - Average stage length (miles): Q1 2025: 941 vs. Q1 2024: 926, an increase of 1.7% [4] Total System – Year Over Year Comparison - March 2025 total passengers: 1,904,613 vs. March 2024: 1,668,252, a change of 14.2% [5] - Available seat miles (000): March 2025: 2,275,018 vs. March 2024: 1,892,229, a change of 20.2% [5] - Departures: March 2025: 13,885 vs. March 2024: 11,585, an increase of 19.9% [5] - Average stage length (miles): March 2025: 935 vs. March 2024: 921, an increase of 1.6% [5] - Q1 2025 total passengers: 4,451,306 vs. Q1 2024: 4,104,860, an increase of 8.4% [5] - Q1 2025 available seat miles (000): 5,451,584 vs. Q1 2024: 4,771,971, an increase of 14.2% [5] - Q1 2025 departures: 33,235 vs. Q1 2024: 29,225, an increase of 13.7% [5] - Q1 2025 average stage length (miles): 935 vs. Q1 2024: 919, an increase of 1.8% [5] Preliminary Financial Results - Estimated average fuel cost per gallon for March 2025: $2.52 [6] - Estimated average fuel cost per gallon for Q1 2025: $2.61 [6] Company Overview - Allegiant Travel Company is an integrated travel company based in Las Vegas, focusing on connecting customers with various destinations through its airline services [7] - The company has been operational since 1999, providing nonstop flights from small-to-medium cities to vacation destinations at competitive fares [7]

About the Industry The Zacks Airline industry players are engaged in transporting passengers and cargo to various destinations globally. Most operators maintain a fleet of multiple mainline jets in addition to several regional planes. Their operations are aided by their regional airline subsidiaries and third-party regional carriers. Additionally, industry players utilize their respective cargo divisions to offer a wide range of freight and mail services. The players invest substantially to upgrade technolo ...

The airline is the only U.S. carrier included on Newsweek and Plant-A Insights Group's America's Most Loved Brands 2025 list LAS VEGAS, March 31, 2025 /PRNewswire/ -- Allegiant (NASDAQ: ALGT) is proud to be the only U.S. airline named by Newsweek as one of America's Most Loved Brands 2025. Flight days, times and the lowest fares can be found only at Allegiant.com. "The convenience of nonstop travel without the need to manage connections or layovers represents a strong value proposition for our customers," s ...

Core Viewpoint - The article emphasizes the importance of value investing and highlights Allegiant (ALGT) as a strong candidate for value investors due to its favorable financial metrics and Zacks Rank [2][4][6] Company Analysis - Allegiant (ALGT) currently holds a Zacks Rank of 2 (Buy) and has a Value grade of A, indicating strong potential for value investors [4] - The stock is trading at a P/E ratio of 6.84, significantly lower than the industry average P/E of 15.24, suggesting it may be undervalued [4] - Over the past 12 months, ALGT's Forward P/E has fluctuated between a high of 61.81 and a low of 6.50, with a median of 10.34, indicating volatility in its valuation [4] Industry Comparison - The P/S ratio for Allegiant is 0.41, compared to the industry average P/S of 0.53, further supporting the notion that ALGT is undervalued [5] - The metrics discussed, including P/E and P/S ratios, are commonly used by value investors to assess stock performance and potential [5][6]

Core Viewpoint - Allegiant Travel Company (ALGT) is experiencing improved demand and expansion efforts, but faces challenges with weak liquidity and rising expenses [1]. Group 1: Demand and Capacity - Robust air travel demand is enhancing ALGT's prospects, with scheduled traffic increasing by 4.7% from February 2024 levels [2]. - Capacity for scheduled service rose significantly by 10.7% year over year, although this led to a slight decline in load factor to 79.5%, down from 84% the previous year [2]. Group 2: Expansion Strategy - ALGT is strategically expanding with 44 new nonstop routes, including three new cities, catering to the demand for affordable air travel [3]. - The addition of cities like Gulf Shores, Colorado Springs, and Columbia, along with new airports, positions ALGT to serve popular vacation destinations and underserved markets [3]. Group 3: Capacity Growth Plans - In 2025, ALGT plans to enhance capacity through increased aircraft utilization during peak leisure periods, with the delivery of 9 new MAX aircraft [4]. - The new aircraft are expected to offer significantly higher earnings potential compared to the older A320 aircraft they will replace [4]. - ALGT is also expanding its premium seating offering, currently equipping 56 aircraft with Allegiant Extra, which boosts ancillary revenue per passenger [4]. Group 4: Financial Challenges - ALGT's financial stability is under pressure due to elevated operating expenses, which surged by 17% year over year in 2024, primarily driven by labor costs [5]. - Labor costs, comprising 29.8% of total operating expenses, increased by 19.2% year over year [5]. - The company ended 2024 with a current ratio of 0.74, indicating liquidity challenges, as a ratio above 1 is preferable for meeting short-term obligations [6]. Group 5: Stock Performance - ALGT shares have declined by 22.9% over the past year, contrasting with a 12.9% rise in the Zacks Transportation - Airline industry during the same period [6].

Core Viewpoint - Allegiant Travel Company (ALGT) has reduced its capacity growth forecast for 2025 due to weak leisure demand during off-peak periods, now expecting a 13% year-over-year growth compared to the previously estimated 17% [1] Group 1: Capacity and Demand - ALGT's management anticipates a decline of just over 7% in total unit revenues (TRASM) for Q1 2025 compared to Q1 2024 due to softness in leisure air travel demand [2] - Despite the weak leisure travel demand, ALGT carried approximately 1.28 million passengers in February, marking a 2.9% year-over-year increase [4] - Scheduled traffic increased by 4.7% from February 2024 levels, while capacity for scheduled service rose by 10.7% year over year [5] Group 2: Financial Performance - ALGT has improved its cost performance, tightening its March quarter earnings guidance to approximately $1.50 per share, down from a previous range of $1.50-$1.75 per share [3] - Total departures for scheduled services increased by 9.7% in February 2025 compared to the previous year, with overall capacity rising by 10.6% [6] Group 3: Expansion and Fleet Modernization - To address the strong air travel demand, ALGT is expanding its network by adding 44 new nonstop routes, including routes to Gulf Shores, Alabama, Colorado Springs, Colorado, and Columbia, South Carolina [11] - The fleet size has grown from 91 at the end of 2019 to 125 by the end of 2024, reflecting ongoing modernization efforts [12] Group 4: Valuation and Market Position - ALGT is considered undervalued with a forward price-to-sales (P/S) ratio of 0.33, significantly lower than industry averages and its five-year average [13] - Despite the positive outlook, rising operating expenses, particularly a 19% year-over-year increase in labor costs in 2024, pose challenges [14][15] Group 5: Debt Concerns - The company's long-term debt reached $1.25 billion by the end of 2025, a 29% increase from 2019 levels, raising concerns about financial stability [16]

Core Insights - Allegiant Travel Company is experiencing softness in leisure demand during shoulder and off-peak periods, while peak weeks in March are performing strongly with TRASM nearly in line with the previous year despite significant growth [2] - The company expects first quarter TRASM to decline by just over seven percent year-over-year and is reducing its full-year capacity forecast from an increase of 17 percent to 13 percent [2] - Better-than-expected cost performance is anticipated, with consolidated earnings per share expected to be around $1.50, and the airline contributing approximately $1.75 per share [2] Passenger Traffic Results - In February 2025, Allegiant reported 1,280,034 passengers, a 2.9% increase from 1,243,576 passengers in February 2024 [4] - Revenue passenger miles increased by 4.7% to 1,249,948, while available seat miles rose by 10.7% to 1,573,230 [4] - The load factor decreased by 4.5 percentage points to 79.5%, with departures increasing by 9.7% to 9,390 [4] Total System Performance - Total system passengers in February 2025 were 1,286,748, up 2.6% from 1,253,860 in February 2024 [4] - Available seat miles for the total system increased by 10.6% to 1,610,101, and departures rose by 9.4% to 9,676 [4] - The average stage length increased by 2.3% to 946 miles [4] Financial Metrics - The estimated average fuel cost per gallon for February 2025 is $2.70 [6] - Allegiant is focused on connecting customers from small-to-medium cities to vacation destinations with low average fares [6]

Core Viewpoint - Allegiant Travel has reported a mixed performance in its recent earnings, with a notable decline in share price and a downward trend in estimates, despite beating earnings expectations for Q4 2024 [1][2][9]. Financial Performance - Allegiant reported Q4 2024 earnings per share of $2.10, exceeding the Zacks Consensus Estimate of $1.88, and up from 11 cents per share in the same quarter last year [2]. - Operating revenues reached $627.7 million, surpassing the Zacks Consensus Estimate of $624.8 million, reflecting a year-over-year increase of 2.7% [2]. - Passenger revenues, which constituted 88.2% of total revenues, decreased by 0.4% year-over-year [3]. Operational Metrics - Air traffic, measured in revenue passenger miles, fell by 2.2% year-over-year, while capacity, measured in available seat miles (ASMs), grew by 1.7% [3]. - The load factor decreased to 80.2% from 83.3% in the previous year, indicating that traffic did not keep pace with capacity growth [3]. - Operating costs per available seat mile, excluding fuel, decreased by 2.5% year-over-year to 8.29 cents, while average fuel costs per gallon fell by 22.2% to $2.49 [4]. Liquidity and Debt - As of December 31, 2024, Allegiant's total unrestricted cash and investments were $832.8 million, an increase from $804.6 million in the prior quarter [5]. - Long-term debt and finance lease obligations totaled $1.61 billion, down from $1.77 billion in the previous quarter [5]. Guidance and Projections - For Q1 2025, scheduled service ASMs are expected to increase by 14% year-over-year, with total system ASMs projected to rise by 13.5% [6]. - The operating margin is anticipated to be between 8% and 11%, with adjusted EPS expected in the range of $1.75 to $2.75 [6]. - For the full year 2025, scheduled service ASMs are projected to increase by 17% year-over-year, with total system ASMs expected to rise by 16% [7]. Capital Expenditures - Aircraft-related capital expenditures are expected to be in the range of $285 million to $315 million, with additional capital expenditures for maintenance and other airline needs projected between $85 million to $135 million [8]. Market Sentiment and Estimates - Estimates for Allegiant have trended downward, with a consensus estimate shift of -21.11% over the past month [9]. - Despite the downward revisions, Allegiant holds a Zacks Rank 1 (Strong Buy), indicating expectations for above-average returns in the coming months [11]. Industry Comparison - Allegiant Travel operates within the Zacks Transportation - Airline industry, where competitor LATAM has seen a 6.9% gain over the past month, reporting revenues of $3.34 billion and an EPS of $0.90 [12].

Fleet and Operations - The company operates a fleet of 119 Airbus A320 series aircraft and four Boeing 737 series aircraft, serving 577 routes to 122 cities, with 432 unique city pairs lacking nonstop competition[19]. - The company operates 577 scheduled routes, including 533 active routes and 44 newly announced routes starting in 2025[56]. - The company plans to increase peak period service to 1,000 daily departures over time[23]. - The company has identified over 1,400 incremental domestic routes for future expansion, with more than 75% currently lacking nonstop service[23][29]. - As of December 31, 2024, the company faces mainline non-stop competition on approximately 25% of its operating and announced routes[69]. Financial Performance - Ancillary revenue per passenger increased from $5.87 in 2004 to $75.83 in 2024, highlighting significant growth in ancillary offerings[30]. - The operating cost per available seat mile (CASM), excluding fuel and special charges, was 8.56 cents in 2024, among the lowest in the industry[39]. - The company aims to achieve at least 15% of new revenue from sources other than capacity growth[23]. - Revenue from ancillary items is expected to remain a key component of the total average fare, as leisure travelers are less sensitive to ancillary fees[53]. - Fuel costs accounted for approximately 22.8% of total operating expenses in 2024, significantly impacting profitability[154]. - Labor costs represented about 29.8% of total operating costs in 2024, making it the largest expense line item[163]. - As of December 31, 2024, the company had $832.9 million in unrestricted cash and total debt of $2.07 billion, resulting in net debt of $1.23 billion[55]. Strategic Initiatives - The company has a strategy to utilize customer data for personalized offerings and to enhance eCommerce experiences[23][46]. - The company has entered into an agreement to purchase 50 Boeing 737 MAX aircraft, with options for an additional 80, aimed at improving operational efficiency and cost structure[43]. - The company has fitted 56 of its aircraft with the Allegiant Extra configuration, which offers additional legroom and priority boarding[50]. - The company is currently seeking a capital partner for the Sunseeker Resort, which has incurred significant operating losses since its opening in December 2023[178][180]. - The company has begun accruing a retention bonus for pilots in May 2023, in response to rising industry pay rates[165]. Environmental and Regulatory Compliance - The aviation sector aims for net-zero greenhouse gas emissions by 2050, with the FAA setting a goal consistent with this broader federal objective[129]. - The company plans to reduce tank-to-wake GHG emissions by 10% per revenue ton kilometer (RTK) by the end of 2030 from a 2023 base year[147]. - The company is assessing sustainable aviation fuels as part of its strategy to meet emissions intensity reduction goals by the end of 2030[145]. - The FAA's Federal Excise Taxes (FET) have been reauthorized until September 30, 2028, impacting all carriers who must collect these taxes from passengers[123]. - Increased federal regulations and potential future legislation could lead to higher operating costs and impact profitability[211]. Workforce and Human Resources - The company employs 5,991 full-time equivalent employees, with approximately 1,375 pilots and 1,900 flight attendants as of December 31, 2024[75]. - The company has entered into new agreements with flight attendants and maintenance technicians, extending contract terms and increasing pay rates[166][167]. - The company faces challenges in attracting and retaining qualified personnel, particularly pilots, due to industry-wide competition and recent growth[169]. Technology and Innovation - Allegiant is migrating critical business applications to cloud infrastructure to enhance analytics, business intelligence, and disaster mitigation[89]. - An AI Council has been established to explore AI-driven solutions, aiming to automate processes and improve decision-making frameworks[91]. - Significant investments have been made to replace core systems with advanced software, including SAP for accounting and Trax for maintenance management[92]. Community Engagement and Corporate Responsibility - Allegiant has donated $1 million to the Boys & Girls Club of America since 2023 to inspire children to pursue aviation careers[95]. - The company has implemented environmental efficiency strategies in the construction of the Sunseeker Resort, embedding ESG principles in operations[108]. - Allegiant has received recognition for its workplace diversity and responsibility, being listed in Newsweek's America's Greatest Workplaces for Diversity in 2024[87].

Core Insights - Value investing remains a preferred strategy for identifying strong stocks across various market conditions, focusing on companies perceived as undervalued based on fundamental analysis [2][8] - The Zacks Rank system, which emphasizes earnings estimates and revisions, is a key tool for investors seeking high-potential stocks [1][3] Company Analysis - Allegiant (ALGT) has a Zacks Rank of 1 (Strong Buy) and a Value grade of A, with a Forward P/E ratio of 9.32, significantly lower than the industry average of 16 [4] - Over the past year, ALGT's Forward P/E has fluctuated between 61.81 and 7.88, with a median of 10.34 [4] - ALGT's P/S ratio stands at 0.54, slightly below the industry average of 0.56, indicating potential undervaluation [5] - Frontier Group (ULCC) is rated 2 (Buy) with a Value grade of A, featuring a Forward P/E ratio of 8.33 and a PEG ratio of 0.23, both favorable compared to the industry averages [6] - ULCC's price-to-earnings ratio has ranged from 148.72 to 4.55 over the past year, with a median of 11.60, while its PEG ratio has varied between 0.25 and 0.21, with a median of 0.22 [6] - The P/B ratio for ULCC is 2.76, compared to the industry's 4.99, further suggesting potential undervaluation [7] Investment Outlook - Both Allegiant and Frontier Group are highlighted as strong value stocks, with favorable earnings outlooks and metrics indicating they may be undervalued in the current market [8]