The airline industry is a crowded place. Finding winners in this space is easier said than done. Southwest Airlines (LUV) has been one of my favorites in this space for many years, but unfortunately, my investment in LUV has not gone according to plans, so far. While analyzing the prospects for the airline sector, I recently came across SkyWest, Inc. (NASDAQ:SKYW), a regional airline operator that draws little attention from both investors and consumers. SKYW stock, up more than 108% in the past 12 months, ...

The Zacks rating relies solely on a company's changing earnings picture. It tracks EPS estimates for the current and following years from the sell-side analysts covering the stock through a consensus measure -- the Zacks Consensus Estimate. As such, the Zacks rating upgrade for SkyWest is essentially a positive comment on its earnings outlook that could have a favorable impact on its stock price. The change in a company's future earnings potential, as reflected in earnings estimate revisions, has proven to ...

Core Insights - The airline industry is experiencing a significant rebound in air travel demand, particularly in leisure travel, which is positively impacting stock performance [11] - The International Air Transport Association (IATA) has revised its global profitability forecast for the airline industry, increasing it to $30.5 billion for the current year, up from $25.7 billion [12] Company-Specific Insights - United Airlines (UAL) has seen a 0.2% upward revision in the Zacks Consensus Estimate for 2024 earnings over the past 60 days, with a 0.4% upward revision for 2025 earnings [1] - Alaska Air (ALK) has experienced a 2% upward revision in the Zacks Consensus Estimate for 2024 earnings and a 5.1% upward revision for 2025 earnings over the same period [4] - SkyWest (SKYW) has a Zacks Rank 2 (Buy) and has seen a 6.9% improvement in the 2024 earnings estimate over the past 90 days, with an expected earnings growth rate of more than 100% for 2024 [7][10] Market Trends - Passenger traffic is expected to remain high throughout the year, with U.S. airlines anticipated to carry 271 million passengers from June 1 to August 31, 2024 [8] - The airline industry is expected to perform strongly in the latter half of 2024, driven by high passenger volumes and favorable earnings estimate revisions [9][11]

Industry Overview - The transportation services sector, valued at $7.31 trillion last year, is projected to nearly double to $15.94 trillion by 2032, indicating significant growth potential despite current challenges [2]. Company Highlights Uber Technology (UBER) - Uber has transitioned from a ride-sharing app to a major player in food delivery and freight transportation, achieving a stock market gain of over 63% last year [4]. - In Q1, Uber reported a 14.8% increase in sales to $10.1 billion year-over-year, surpassing analyst estimates by $40.2 million, with total gross bookings rising nearly 20% [5]. - Despite a loss per share of 31 cents, which missed estimates by 51 cents, analysts expect earnings per share to be 90 cents this year, a 3.3% decline year-over-year, with a recovery anticipated next year [6]. United Airlines (UAL) - United Airlines has consistently exceeded revenue and earnings estimates over the past four quarters, with Q1 revenues reaching $12.54 billion, a 9.7% increase year-over-year [8]. - The airline reported a 1% rise in passenger revenue per available seat mile, driven by strong performance in the Pacific and European regions [8]. - Strategic decisions, such as maintaining its entire widebody fleet during the pandemic, have contributed to record international profits and a positive outlook for future financial performance [9]. SkyWest (SKYW) - SkyWest has established itself as a leading regional airline, connecting passengers to smaller airports and benefiting from strong pricing advantages [10]. - The company reported a 16% increase in total revenue year-over-year to $803.6 million in Q1, and turned a previous net loss of $22 million into a net gain of $60 million [11]. - With strong travel demand expected, SkyWest's stock has seen a significant increase of over 108% last year, positioning it as one of the best transportation stocks to buy [12].

Company Performance - For the annual period, the Zacks Consensus Estimates anticipate earnings of $6.83 per share and a revenue of $3.36 billion, signifying shifts of +787.01% and +14.58%, respectively, from the last year [1] - SkyWest is expected to report an EPS of $1.73, marking a 394.29% rise compared to the same quarter of the previous year, with a projected revenue of $814.4 million, reflecting a 12.23% rise from the equivalent quarter last year [8] Stock Performance - Shares of SkyWest witnessed a gain of 11.25% over the previous month, outperforming the Transportation sector, which experienced a loss of 1.91%, and the S&P 500's gain of 3.38% [2] - SkyWest closed at $81.85 in the latest trading session, marking a +1.54% move from the prior day, outpacing the S&P 500's 0.09% gain on the day [7] Analyst Estimates and Rankings - Recent modifications to analyst estimates for SkyWest indicate positive sentiment, with the Zacks Consensus EPS estimate moving 0.24% higher over the last 30 days, currently carrying a Zacks Rank of 2 (Buy) [3][4] - The Zacks Rank system has an impressive track record, with 1 stocks generating an average annual return of +25% since 1988 [4] Industry Overview - The Transportation - Airline industry is part of the Transportation sector, holding a Zacks Industry Rank of 81, placing it in the top 33% of all 250+ industries [5] - SkyWest is currently traded at a Forward P/E ratio of 11.81, indicating a premium relative to the industry's average Forward P/E of 8.97 [10]

Core Viewpoint - SkyWest has shown a strong stock performance with an 11.3% return over the past month, significantly outperforming the Zacks S&P 500 composite's 3.4% change, while the Zacks Transportation - Airline industry has declined by 4.8% [1] Earnings Estimates - For the current fiscal year, the consensus earnings estimate is $6.83, reflecting a remarkable increase of 787% from the previous year, with a slight change of +0.2% over the last 30 days [2] - For the current quarter, SkyWest is expected to report earnings of $1.73 per share, indicating a year-over-year change of +394.3%, with the Zacks Consensus Estimate remaining unchanged [12] - For the next fiscal year, the consensus earnings estimate is $8, representing a 17.2% increase from the prior year, with a change of +0.3% over the past month [19] Revenue Growth - SkyWest reported revenues of $803.61 million in the last quarter, marking a year-over-year increase of 16.2%, with an EPS of $1.45 compared to -$0.45 a year ago [15] - The consensus sales estimate for the current quarter is $814.4 million, indicating a year-over-year change of +12.2%. For the current and next fiscal years, the estimates are $3.36 billion and $3.7 billion, reflecting increases of +14.6% and +9.9%, respectively [21] Performance and Valuation - SkyWest has consistently beaten consensus EPS estimates in the last four quarters and topped revenue estimates three times during this period [5] - The company is graded A in terms of valuation, indicating it is trading at a discount compared to its peers [6] - The Zacks Rank for SkyWest is 2 (Buy), suggesting it may outperform the broader market in the near term [9][13]

Core Insights - The article emphasizes the importance of value investing as a successful strategy across various market conditions, focusing on identifying undervalued companies through fundamental analysis [2][9] Company Analysis: SkyWest (SKYW) - SkyWest (SKYW) holds a Zacks Rank of 1 (Strong Buy) and a Value grade of A, with a current P/E ratio of 10.77, significantly lower than the industry average of 15.84 [4] - The P/B ratio for SKYW is 1.48, which is favorable compared to the industry average of 3.45, indicating solid valuation metrics [5] - SKYW's P/CF ratio stands at 6.59, which is attractive relative to the industry's average of 10.34, suggesting the stock may be undervalued based on cash flow [6] Company Analysis: Controladora Vuela Compania de Aviacion, B. de C.V. (VLRS) - Controladora Vuela Compania de Aviacion, B. de C.V. (VLRS) also has a Zacks Rank of 1 (Strong Buy) and a Value grade of A, with a Forward P/E ratio of 8.50, well below the industry average [7] - VLRS's P/B ratio is 2.67, which is lower than the industry average of 3.45, indicating a potentially attractive valuation [8] - The article notes that VLRS's PEG ratio is -2.17, contrasting sharply with the industry average of 0.73, further suggesting undervaluation [7][8] Conclusion - Both SkyWest and Controladora Vuela Compania de Aviacion, B. de C.V. are highlighted as strong value stocks, with metrics indicating they are likely undervalued at present, supported by their strong earnings outlook [9]

The Transportation - Airline industry is part of the Transportation sector. This industry currently has a Zacks Industry Rank of 97, which puts it in the top 39% of all 250+ industries. SkyWest (SKYW) closed the most recent trading day at $79.44, moving -0.4% from the previous trading session. This change lagged the S&P 500's 0.16% loss on the day. Meanwhile, the Dow experienced a rise of 0.04%, and the technology-dominated Nasdaq saw a decrease of 0.18%. Shares of the regional airline have appreciated by 8 ...

The Transportation group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Has SkyWest (SKYW) been one of those stocks this year? A quick glance at the company's year-to-date performance in comparison to the rest of the Transportation sector should help us answer this question. The Zacks Rank is a successful stock-picking model that emphasizes earnings estimates and estimate revisions. The system highlights a number of different stocks that ...

Over the past month, shares of this regional airline have returned +3.1%, compared to the Zacks S&P 500 composite's +4% change. During this period, the Zacks Transportation - Airline industry, which SkyWest falls in, has lost 2.7%. The key question now is: What could be the stock's future direction? Revisions to Earnings Estimates Our analysis is essentially based on how sell-side analysts covering the stock are revising their earnings estimates to take the latest business trends into account. When earnings ...