Core Viewpoint - SkyWest (SKYW) is experiencing strong air travel demand and high passenger volumes, leading to impressive share price performance and growth opportunities [1] Financial Performance - The Zacks Consensus Estimate for SKYW's earnings per share has been revised upward by 7.7% for the current year and 7.3% for 2026, indicating broker confidence [2] - SKYW's shares have risen 36.1% over the past year, outperforming the Zacks Transportation – Airline industry's growth of 19.7% [3] - The company has a positive earnings surprise history, exceeding the Zacks Consensus Estimate in the last four quarters with an average surprise of 16.7% [4] Industry Position - SKYW belongs to an industry with a Zacks Industry Rank of 35 out of 246, placing it in the top 14% of Zacks Industries, which is crucial for stock performance [5] Growth Factors - The company has a strong track record of meeting the demands of major airline partners, with revenues primarily from flying agreements expected to remain robust due to rising air travel demand [6] - SkyWest operates a fleet of around 500 aircraft, serving over 240 destinations, and carried more than 38 million passengers in 2023 [7] - The company is modernizing its fleet with agreements to operate 278 E175 aircraft by the end of 2026 and has acquired a 25% stake in regional carrier Contour Airlines [7] Strategic Developments - SkyWest has reached a multi-year contract extension with American Airlines for 74 CRJ700s and has taken delivery of four new E175 aircraft as part of an agreement with United Airlines, highlighting its commitment to network expansion [8][9]

Group 1 - The airline sector has experienced significant changes following the pandemic, with some carriers struggling while others have emerged stronger [1]

Company Performance - SkyWest (SKYW) closed at $98.91, reflecting a +0.99% change from the previous day, underperforming the S&P 500's gain of 1.59% [1] - Over the past month, SkyWest shares have decreased by 16.12%, compared to a 5.85% loss in the Transportation sector and a 2.42% loss in the S&P 500 [1] Upcoming Earnings - SkyWest is expected to report an EPS of $2.01, indicating a growth of 38.62% year-over-year, with quarterly revenue projected at $926.38 million, up 15.28% from the same period last year [2] Full-Year Estimates - The Zacks Consensus Estimates for SkyWest's full-year earnings are $9.01 per share and revenue of $3.82 billion, representing year-over-year increases of +15.96% and +8.21% respectively [3] Analyst Revisions - Recent adjustments to analyst estimates for SkyWest are seen as a positive indicator of the company's business outlook, with a 7.64% increase in the Zacks Consensus EPS estimate over the last 30 days [5][3] Valuation Metrics - SkyWest has a Forward P/E ratio of 10.88, which is higher than the industry average of 8.86 [5] - The company holds a PEG ratio of 1.24, compared to the Transportation - Airline industry's average PEG ratio of 0.69 [6] Industry Ranking - The Transportation - Airline industry has a Zacks Industry Rank of 37, placing it in the top 15% of over 250 industries [6] - Research indicates that the top 50% rated industries outperform the bottom half by a factor of 2 to 1 [7]

Group 1 - SkyWest (SKYW) has experienced a significant decline of 15.2% over the past four weeks, but it is now in oversold territory, indicating a potential for a trend reversal [1] - The Relative Strength Index (RSI) for SKYW is at 26.67, suggesting that the heavy selling pressure may be exhausting, which could lead to a price rebound [5] - There is a strong consensus among Wall Street analysts that SKYW will report better earnings than previously predicted, with a 7.6% increase in the consensus EPS estimate over the last 30 days [6] Group 2 - SKYW holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, indicating a strong potential for a turnaround [7]

Group 1 - SkyWest (NASDAQ: SKYW) is perceived as an undervalued stock with significant upside potential, despite market concerns regarding pilot shortages and airline struggles [1] - The market's focus on these old worries is seen as missing the broader positive outlook for SkyWest [1] Group 2 - Motti Sapir, an economist and financial analyst, emphasizes the importance of simplifying complex financial concepts and uncovering market trends [1] - His approach includes creating clear visuals to make financial data more understandable for investors [1]

Core Insights - The article emphasizes the importance of value investing, highlighting the identification of undervalued companies through various valuation metrics [2][3] - Zacks has developed a Style Scores system to categorize stocks, with a focus on those that have high Zacks Ranks and "A" grades in the Value category [3] Company Analysis: SkyWest (SKYW) - SkyWest (SKYW) holds a Zacks Rank of 1 (Strong Buy) and a Value grade of A, indicating strong potential as a value stock [4] - The stock has a P/E ratio of 11.08, significantly lower than the industry average of 16.57, suggesting it may be undervalued [4] - Over the past 12 months, SKYW's Forward P/E has fluctuated between 9.16 and 14.41, with a median of 11.06 [4] - SKYW's P/CF ratio is 5.96, compared to the industry's average of 12, indicating a solid cash outlook [5] - The P/CF ratio has ranged from 5.04 to 7.64 over the last year, with a median of 6.31 [5] Company Analysis: United Airlines (UAL) - United Airlines (UAL) also holds a Zacks Rank of 1 (Strong Buy) and a Value grade of A, making it a strong candidate for value investment [6] - The stock is currently trading at a forward earnings multiple of 8.08, which is lower than the industry average P/E of 16.57 [6] - UAL's PEG ratio stands at 0.69, compared to the industry's average of 0.83, indicating potential undervaluation [6] - Over the last 12 months, UAL's P/E has varied from 3.63 to 9.45, with a median of 5.01 [7] - The P/B ratio for UAL is 2.76, significantly lower than the industry's average of 5.15, further supporting its value proposition [7] Conclusion - Both SkyWest and United Airlines exhibit strong value characteristics, with favorable P/E, P/CF, and PEG ratios compared to their respective industry averages, indicating they are likely undervalued at present [8]

Financial Performance - Total operating revenues for the year ended December 31, 2024, were $3.5 billion, a 20.2% increase from $2.9 billion in 2023[211]. - Net income for 2024 was $323.0 million, or $7.77 per diluted share, compared to $34.3 million, or $0.77 per diluted share, in 2023[211]. - Operating revenues for SkyWest Airlines and SWC increased by $513.2 million, or 21.5%, from 2023 to 2024[245]. - SkyWest Airlines and SWC segment profit was $138.9 million for 2024, a significant recovery from a loss of $165.2 million in 2023[243]. - SkyWest Leasing segment operating revenues increased by $79.3 million, or 14.6%, to $622.6 million in 2024 from $543.3 million in 2023[250]. - SkyWest Leasing segment profit rose by $87.7 million, or 42.7%, to $293.3 million in 2024 compared to $205.5 million in 2023[252]. Operational Metrics - The number of aircraft in scheduled service or under contract increased from 485 in 2023 to 492 in 2024, a 1.4% increase[212]. - Block hours increased from 1.14 million in 2023 to 1.29 million in 2024, representing a 13.3% increase[212]. - Departures increased from 691,962 in 2023 to 766,742 in 2024, a 10.8% increase[216]. - The average passenger trip length increased by 2.4%, from 453 miles in 2023 to 464 miles in 2024[219]. Revenue and Expense Analysis - Capacity purchase revenue rose by $502.4 million, or 20.5%, due to increased completed block hours and recognition of previously deferred revenue[213]. - Prorate and SWC revenue increased by $76.0 million, or 19.9%, driven by a higher number of passengers carried[213]. - Total operating expenses increased by $201.9 million, or 7.1%, primarily due to increased direct operating expenses from more flights operated[215]. - Salaries, wages, and benefits increased by $141.3 million, or 10.7%, due to higher direct labor costs from increased flight operations[246]. - Aircraft maintenance expenses rose by $39.2 million, or 5.8%, primarily due to higher flight volume[229]. Cash Flow and Debt Management - Cash and cash equivalents increased by $79.1 million, or 53.3%, to $227.4 million as of December 31, 2024, from $148.3 million in 2023[258]. - Total long-term debt decreased by $0.3 billion, or 10%, to $2.7 billion as of December 31, 2024, from $3.0 billion in 2023[254]. - Net cash provided by operating activities was $692.5 million in 2024, down $43.9 million, or 6.0%, from $736.3 million in 2023[258]. - Cash used in investing activities surged by $205.4 million, or 884.3%, to $228.6 million in 2024 from $23.2 million in 2023[258]. - Cash used in financing activities decreased by $283.1 million, or 42.4%, to $384.8 million in 2024 compared to $667.8 million in 2023[265]. Future Commitments and Investments - The fleet is scheduled to add a total of 15 new E175 aircraft with United from 2025 to 2026, enhancing capacity and profitability[208]. - SkyWest has a firm purchase commitment for 16 new E175 aircraft with anticipated delivery dates extending into 2026[269]. - The company recognized $1.5 million of previously deferred lease revenue during the year ended December 31, 2024[281]. Tax and Impairment - The effective income tax rate increased to 25.3% in 2024 from 14.8% in 2023, influenced by various factors including non-deductible expenses[238]. - The company recorded a non-cash impairment loss of $2.3 million related to 14 CRJ700 aircraft in 2023[285]. - The company reclassified the 14 CRJ700 aircraft as held for use assets in March 2024, resulting in a $4.2 million gain for the year ended December 31, 2024[285]. Fuel and Cost Analysis - The average price per gallon of aircraft fuel for the year ended December 31, 2024, was $3.19, compared to $3.70 in 2023 and $4.14 in 2022[291]. - Salaries, wages, and benefits expense represented 48.3% of total operating expenses for the year ended December 31, 2024[294]. - A hypothetical 25% increase in salaries, wages, and benefits would have raised operating expenses by approximately $366.0 million for the year ended December 31, 2024[294]. - A hypothetical 50 basis point change in market interest rates would not have a material effect on the company's financial results[292].

Group 1 - The airline industry has been significantly impacted by the COVID-19 pandemic, which halted flying and leisure travel for months starting in winter 2020 [1] - The article emphasizes the challenges faced by airline companies during the peak of COVID, highlighting the unprecedented nature of the crisis [1] Group 2 - The author expresses a commitment to providing investors with tools and knowledge for informed investment decisions, focusing on macroeconomic analysis and market trends [1]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: SkyWest (SKYW) - SkyWest currently holds a Momentum Style Score of A, indicating strong momentum characteristics [2] - The company has a Zacks Rank of 1 (Strong Buy), suggesting it is expected to outperform the market [3] Performance Metrics - Over the past week, SkyWest shares increased by 5.97%, significantly outperforming the Zacks Transportation - Airline industry, which rose by only 0.13% [5] - In a longer timeframe, SkyWest shares have risen by 6.54% over the past month, compared to the industry's 1.02% [5] - Over the last quarter, SkyWest shares increased by 5.65%, and over the past year, they surged by 99.39%, while the S&P 500 only moved 5.14% and 24.19% respectively [6] Trading Volume - The average 20-day trading volume for SkyWest is 368,876 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Outlook - In the past two months, three earnings estimates for SkyWest have been revised upwards, with no downward revisions, raising the consensus estimate from $8.35 to $9.01 [9] - For the next fiscal year, two estimates have also moved upwards, indicating positive sentiment [9] Conclusion - Given the strong performance metrics and positive earnings outlook, SkyWest is positioned as a 1 (Strong Buy) stock with a Momentum Score of A, making it a compelling investment opportunity [11]

Core Insights - Zacks Premium provides tools for investors to enhance their stock market strategies, including daily updates on Zacks Rank and Industry Rank, research reports, and stock screens [1][2] Zacks Style Scores - Zacks Style Scores rate stocks based on value, growth, and momentum, serving as complementary indicators to the Zacks Rank, helping investors identify securities likely to outperform the market in the short term [2][3] Value Score - The Value Style Score focuses on identifying undervalued stocks by analyzing financial ratios such as P/E, PEG, Price/Sales, and Price/Cash Flow [3] Growth Score - The Growth Style Score assesses a company's financial health and future outlook by examining projected and historical earnings, sales, and cash flow to find stocks with sustainable growth potential [4] Momentum Score - The Momentum Style Score evaluates stocks based on price trends and earnings outlook changes, utilizing metrics like one-week price change and monthly earnings estimate changes to identify high-momentum buying opportunities [5] VGM Score - The VGM Score combines the Value, Growth, and Momentum Scores, providing a comprehensive indicator for investors who utilize multiple investing styles [6] Zacks Rank - The Zacks Rank is a proprietary model that uses earnings estimate revisions to simplify portfolio building, with 1 (Strong Buy) stocks achieving an average annual return of +25.41% since 1988, significantly outperforming the S&P 500 [7][8] Stock Selection Strategy - To maximize returns, investors should focus on stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B, while also considering the direction of earnings estimate revisions [10][11] Company Spotlight: SkyWest (SKYW) - SkyWest, a regional airline based in St. George, UT, holds a Zacks Rank of 1 (Strong Buy) and a VGM Score of A, making it an attractive option for growth investors [12] - The company is projected to experience a year-over-year earnings growth of 16% for the current fiscal year, with recent upward revisions in earnings estimates [13]