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A downtrend has been apparent in Allegiant Travel (ALGT) lately with too much selling pressure. The stock has declined 15.5% over the past four weeks. However, given the fact that it is now in oversold territory and Wall Street analysts are majorly in agreement about the company's ability to report better earnings than they predicted earlier, the stock could be due for a turnaround.Guide to Identifying Oversold StocksWe use Relative Strength Index (RSI), one of the most commonly used technical indicators, f ...

Financial Data and Key Metrics Changes - The company achieved an adjusted airline-only operating margin of over 13% for Q4 2024, a 6.5 percentage point increase from the previous year [9] - The airline segment reported a net income of $107.5 million for the full year 2024, resulting in an airline-only earnings per share of $5.84 [40] - The consolidated net income for Q4 2024 was $38.9 million, yielding earnings per share of $2.10 [39] Business Line Data and Key Metrics Changes - Airline revenue for 2024 was $2.44 billion, approximately 2.6% below the prior year, while total ASMs increased by 1.1% [23] - Total ancillary revenue per passenger improved by nearly $3 to almost $76 compared to 2023 [23] - The airline segment generated $139.2 million in EBITDA during Q4 2024, resulting in an EBITDA margin of 22.8%, nearly seven points higher than Q4 2023 [40] Market Data and Key Metrics Changes - The company expects capacity growth of over 15% throughout 2025, with Q1 2025 capacity expected to grow by 14% compared to Q1 2024 [20][26] - The first quarter of 2025 will mark the first time in three years with quarterly growth over 10% [27] - The company anticipates a 1 to 1.5 percentage point headwind to TRASM in Q1 due to Easter timing and a mild stage increase [33] Company Strategy and Development Direction - The company is focused on transitioning Sunseeker off Allegiant's balance sheet and has launched a competitive process for a potential sale or stake sale [13][15] - The ongoing optimization of the Navitaire system is expected to enhance revenue throughout 2025 [12] - The company plans to retire 12 aircraft during 2025, closing the year with a total of 122 aircraft in service [49] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the health of the consumer and the constructive industry capacity backdrop for 2025 [20] - The midpoint of the airline's full-year EPS guidance for 2025 is $9, suggesting an improvement in earnings of over 50% compared to 2024 [21] - Management emphasized the importance of cost discipline and operational excellence as key focuses for the upcoming year [54] Other Important Information - The company ended 2024 with $1.1 billion in available liquidity, including $833 million in cash and investments [44] - A total non-cash impairment of $322 million was recorded in Q4 2024 related to the Sunseeker entity [47] - The Allegiant Always credit card program is expected to generate over $140 million in total remuneration during 2025 [19] Q&A Session Summary Question: Can you provide clarity on capacity growth across the quarters? - Management guided approximately 14% growth for Q1, with the second and third quarters likely in the low 20s, and the fourth quarter expected to have the lowest year-over-year growth [58][60] Question: How is the debt related to Sunseeker being managed? - The company has focused on balance sheet improvement and paid off maturing debt associated with Sunseeker using proceeds from equipment sales and improved earnings [70][71] Question: What is the expected seasonality for Sunseeker? - Typically, the first quarter is the strongest for Sunseeker, followed by the fourth quarter, with summer being the softest period [92] Question: How does the company view the overlap with Spirit Airlines? - The overlap is relatively thin, approximately 4%, and management believes consolidation is not necessary for Allegiant [108][110] Question: What are the expectations for normalized margins in the future? - Management expects margins in 2026 to be higher than in 2025, aiming to return to historical margins through improved productivity and network maturation [112][115]

Financial Performance - The company achieved an adjusted airline-only operating margin of 13.2% in 4Q24, a 6.6 percentage point increase from 6.6% in 4Q23[9, 12] - Consolidated adjusted earnings per share were $2.10 in 4Q24, up from $0.11 in 4Q23[23] - Airline-only adjusted earnings per share were $3.00 in 4Q24, compared to $0.86 in 4Q23[25] - Total airline revenue for the fourth quarter was nearly $610 million[17] Operational Efficiency and Growth - December capacity increased by 16% year-over-year[12] - Aircraft utilization averaged 9.6 hours per day in December, a 21% increase year-over-year[10, 12] - Adjusted airline non-fuel unit costs (CASM-ex) decreased by 2.5% year-over-year to 8.29 cents[26] Strategic Initiatives and Outlook - Scheduled service ASMs are projected to grow by 14% in 1Q25 and 17% for the full year 2025[17] - The company expects to fully recapture $2 per passenger from Navitaire optimization in the first half of 2025[17] - The company ended the year with $1.1 billion in available liquidity[29] - Full-year airline-only earnings per share, excluding special charges, are projected to be $7.75 - $10.25 in FY2025[34]

Financial Data and Key Metrics Changes - The company achieved an adjusted airline only operating margin of over 13% for December, marking a 6.5% increase from the previous year [6] - The airline segment reported a net income of $55.6 million for the fourth quarter, yielding earnings of $3 per share, while the full year consolidated net income was $45.7 million, resulting in a consolidated EPS of $2.48 [27][28] - The airline earned $139.2 million in EBITDA during the fourth quarter, resulting in an EBITDA margin of 22.8%, which is nearly seven points higher than the fourth quarter of 2023 [28] Business Line Data and Key Metrics Changes - The airline revenue for 2024 was $2.44 billion, approximately 2.6% below the prior year, with total ASMs 1.1% higher [16] - Total ancillary revenue per passenger improved to nearly $76, an increase of almost $3 versus 2023 [16] - The airline segment generated full year 2024 net income of $107.5 million or $5.84 of airline only earnings per share [27] Market Data and Key Metrics Changes - The company expects capacity growth of over 15% throughout 2025, with first quarter capacity expected to grow 14% compared to Q1 2024 [13][18] - The dynamics of flying are expected to differ from typical years, with over half of all growth coming in shoulder months like February, April, and August [19] Company Strategy and Development Direction - The company is focused on optimizing existing infrastructure and maintaining a flat aircraft count while driving higher absolute earnings [43] - A significant strategic goal is to transition Sunseeker off Allegiant's balance sheet, with a competitive process for a potential sale or stake sale already underway [9][10] - The company plans to retire 12 aircraft during 2025, closing the year with a total of 122 aircraft in service [34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the health of the consumer and the constructive industry capacity backdrop, positioning the company to capitalize on these trends [13] - The midpoint of the airline's full year EPS guidance of $9 suggests an improvement in earnings of over 50% compared to 2024 [13] - Management emphasized the importance of cost discipline and operational excellence as key focuses for 2025 and beyond [36] Other Important Information - The company ended the year with $1.1 billion in available liquidity, including $833 million in cash and investments [29] - A total non-cash impairment of $322 million was recorded in the fourth quarter related to Sunseeker assets [32] Q&A Session Summary Question: Can you help us think about the progression of capacity growth across the quarters? - Management indicated that the first quarter is guided at approximately 14%, with the second and third quarters likely in the low 20s, and the fourth quarter expected to have the lowest year-over-year growth [41] Question: How are you accomplishing the debt paydown related to Sunseeker? - Management explained that the debt on Sunseeker was beginning to amortize, and they wanted to get ahead of it by utilizing cash flow production from the asset and proceeds from equipment sales [50][51] Question: What is the seasonality of the Sunseeker resort? - Management noted that typically the first quarter is the strongest for Sunseeker, followed by the fourth quarter, with summer being the softest period [69] Question: How is spring break booking up across all products? - Management mentioned that while the final week of spring break may look relatively poor due to Easter timing, overall March bookings are looking solid [62] Question: What are the implications for year-end debt and leverage metrics from the potential sale of Sunseeker? - Management stated that the primary focus is on continued improvement of the balance sheet, and cash proceeds from the Sunseeker transaction were not included in the deleveraging assumptions [77]

Revenue Performance - Fourth quarter 2024 total operating revenue was $627.7 million, a 2.7% increase from $611.0 million in Q4 2023[2] - Full-year 2024 total operating revenue reached $2.5 billion, up 0.1% year-over-year[3] - Total operating revenues for Q4 2024 increased by 2.7% year-over-year to $627.7 million, driven by a 20.6% increase in third-party products revenue[29] - Total operating revenues for the twelve months ended December 31, 2024, were $2,512.6 million, an increase from $2,440.8 million in 2023, representing a growth of 2.9%[56] Earnings and Losses - Fourth quarter 2024 adjusted airline-only diluted earnings per share was $3.00, a significant increase of 248.8% compared to $0.86 in Q4 2023[3] - Full-year 2024 adjusted airline-only diluted earnings per share was $5.84, down 33.8% from $8.82 in 2023[3] - The company recorded a net loss of $216.2 million in Q4 2024, compared to a net loss of $2.0 million in Q4 2023[2] - The company reported a net loss of $240.24 million for the twelve months ended December 31, 2024, compared to a net income of $117.60 million in 2023[36] - The company reported a net loss of $216.2 million for Q4 2024, compared to a loss of $2.0 million in Q4 2023, and a net loss of $240.2 million for the full year 2024, down from a profit of $117.6 million in 2023[58] Operating Expenses - Operating expenses for Q4 2024 rose by 48.5% year-over-year to $891.7 million, with significant increases in special charges and maintenance costs[29] - Total operating expenses rose to $2,752.6 million in 2024, compared to $2,288.9 million in 2023, marking an increase of 20.3%[38] - The company reported total operating expenses of $2,752.6 million for the twelve months ended December 31, 2024, compared to $2,298.6 million in 2023, an increase of 19.7%[56] Capacity and Guidance - The company plans a 17% increase in capacity for 2025, which is expected to pressure unit revenues but improve earnings due to efficient growth[5] - First quarter 2025 airline-only guidance projects a year-over-year change in System ASMs of approximately 13.5% and Scheduled service ASMs of approximately 14.0%[18] - Full-year 2025 airline-only guidance anticipates a year-over-year change in System ASMs of approximately 16.0% and Scheduled service ASMs of approximately 17.0%[18] Special Charges and Impairments - Special charges, net of recoveries, amounted to $368.13 million for the twelve months ended December 31, 2024, compared to $28.65 million in 2023[36] - The company incurred $321.8 million in impairment charges related to Sunseeker for the three months ended December 31, 2024[55] - The company incurred special charges of $368.1 million for the twelve months ended December 31, 2024, compared to $28.6 million in 2023, indicating increased restructuring costs[57] Liquidity and Debt - Total available liquidity at December 31, 2024, was $1.1 billion, including $832.8 million in cash and investments[16] - Total debt decreased to $2,066.5 million in 2024 from $2,259.6 million in 2023, representing a reduction of 8.5%[41] - Unrestricted cash and investments increased to $832.8 million in 2024, up 99.5% from $143.3 million in 2023[41] Passenger Metrics - Total passengers for the three months ended December 31, 2024, were 3,999,879, a decrease of 3.5% from 4,145,771 in 2023[34] - Total passengers carried decreased by 2.1% to 16,982,836 in 2024 from 17,342,236 in 2023[40] Fuel Costs and Load Factor - The average fuel cost per gallon decreased by 22.1% to $2.50 for the three months ended December 31, 2024, down from $3.21 in 2023[34] - The average fuel cost per gallon decreased to $2.76 in 2024 from $3.09 in 2023, a decline of 10.7%[40] - The load factor for scheduled service decreased to 80.2% for the three months ended December 31, 2024, compared to 83.3% in the same period of 2023[34] - The load factor for scheduled services dropped to 83.6% in 2024 from 85.9% in 2023, a decrease of 2.3 percentage points[40] Non-GAAP Measures - The company highlighted the importance of non-GAAP measures like EBITDA for evaluating operating performance and liquidity, which may not be comparable to similar measures used by other companies[50] - The SEC's Regulation G requires the company to reconcile non-GAAP measures to the most comparable GAAP measures, ensuring transparency in financial reporting[52]

Company Performance - Allegiant Travel (ALGT) has returned 10.6% year-to-date, outperforming the average gain of 2.3% in the Transportation sector [4] - The Zacks Consensus Estimate for ALGT's full-year earnings has increased by 4.9% in the past quarter, indicating improved analyst sentiment and earnings outlook [3] - Allegiant Travel currently holds a Zacks Rank of 2 (Buy), suggesting a favorable investment position [3] Industry Context - Allegiant Travel is part of the Transportation - Airline industry, which consists of 28 companies and has gained approximately 51% year-to-date [6] - Despite its positive performance, ALGT is slightly underperforming its industry in terms of year-to-date returns [6] - Delta Air Lines (DAL), another stock in the same industry, has outperformed both the sector and Allegiant Travel with a year-to-date increase of 13.3% [4][5] Sector Overview - The Transportation sector includes 131 individual stocks and ranks 16 in the Zacks Sector Rank [2] - The Zacks Rank system evaluates stocks based on earnings estimates and revisions, highlighting potential outperformers in the market [3] - Investors are encouraged to monitor both Allegiant Travel and Delta Air Lines for continued solid performance [7]

Core Viewpoint - Momentum investing focuses on "buying high and selling higher" rather than the traditional "buying low and selling high" approach, aiming for quicker profits [1] Group 1: Momentum Investing Characteristics - Momentum investing can be risky as stocks may lose momentum if their valuations exceed future growth potential, leading to potential losses for investors [2] - A safer strategy involves investing in bargain stocks that exhibit recent price momentum, which can be identified using tools like the Zacks Momentum Style Score [3] Group 2: Allegiant Travel (ALGT) Analysis - Allegiant Travel (ALGT) has shown a four-week price change of 9.8%, indicating growing investor interest [4] - Over the past 12 weeks, ALGT's stock price has increased by 39.9%, demonstrating its ability to deliver positive returns over a longer timeframe [5] - ALGT has a Momentum Score of B, suggesting it is an opportune time to invest in the stock [6] - The stock has received a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which typically attract more investors [7] - ALGT is trading at a Price-to-Sales ratio of 0.76, indicating it is reasonably valued at 76 cents for each dollar of sales, providing room for further price appreciation [7] Group 3: Additional Investment Opportunities - Besides ALGT, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, which may also present investment opportunities [8] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [9]

Core Insights - Allegiant Travel Company reported a year-over-year increase in passenger traffic for December 2024, with 1,544,874 passengers, representing a 13.9% increase compared to December 2023 [1] - The company experienced a decline in passenger numbers for the fourth quarter and full year of 2024, with a decrease of 3.5% and 2.2% respectively compared to the same periods in 2023 [1] - The average fuel cost per gallon for December 2024 was estimated at $2.47, with the full-year average at $2.76 [3] Scheduled Service – Year Over Year Comparison - December 2024 saw 1,544,874 passengers, up from 1,356,025 in December 2023, a 13.9% increase [1] - Revenue passenger miles increased by 14.8% to 1,441,734, while available seat miles rose by 16.4% to 1,771,717 [1] - The load factor decreased by 1.1 percentage points to 81.4% [1] Fourth Quarter 2024 Results - Total passengers for the fourth quarter of 2024 were 3,927,423, down 3.5% from 4,067,855 in the fourth quarter of 2023 [1] - Revenue passenger miles decreased by 2.2% to 3,609,892, while available seat miles increased by 1.7% to 4,503,059 [1] - The load factor fell by 3.1 percentage points to 80.2% [1] Full Year 2024 Results - Full year 2024 passengers totaled 16,765,283, a decrease of 2.2% from 17,143,870 in 2023 [1] - Revenue passenger miles decreased by 2.1% to 15,303,737, while available seat miles increased by 0.6% to 18,314,867 [1] - The load factor decreased by 2.3 percentage points to 83.6% [1] Total System – Year Over Year Comparison - Total system passengers in December 2024 were 1,555,292, a 13.6% increase from 1,369,293 in December 2023 [1] - Available seat miles for December 2024 increased by 15.6% to 1,811,321 [1] - Departures rose by 16.1% to 11,452 [1] Financial Insights - The estimated average fuel cost per gallon for the fourth quarter of 2024 was $2.50 [3] - The full-year estimated average fuel cost per gallon was $2.76 [3]

Company Overview - Allegiant Travel (ALGT) is expected to report a year-over-year increase in earnings due to higher revenues for the quarter ended December 2024, with a consensus EPS estimate of $1.88, reflecting a significant change of +1609.1% [1][3] - Revenues are anticipated to reach $624.8 million, marking a 2.3% increase from the same quarter last year [3] Earnings Expectations - The consensus EPS estimate has been revised 8.81% higher in the last 30 days, indicating a positive reassessment by analysts [4] - The Most Accurate Estimate for Allegiant Travel is higher than the Zacks Consensus Estimate, resulting in an Earnings ESP of +10.23%, suggesting a strong likelihood of beating the consensus EPS estimate [10][11] Earnings Surprise History - In the last reported quarter, Allegiant Travel was expected to post a loss of $1.85 per share but actually reported a loss of $2.02, resulting in a surprise of -9.19% [12] - Over the past four quarters, the company has surpassed consensus EPS estimates three times [13] Industry Context - In comparison, Southwest Airlines (LUV) is expected to report earnings of $0.45 per share for the same quarter, reflecting a year-over-year change of +21.6%, with revenues projected at $6.95 billion, up 1.8% from the previous year [17] - Southwest Airlines has also seen a significant revision in its EPS estimate, down 453.9% over the last 30 days, but still holds a positive Earnings ESP of 6.78% and a Zacks Rank of 2, indicating a likely earnings beat [18]