SkyWest's EPS Estimates Northbound: Time to Buy the Stock?

Core Viewpoint - SkyWest, Inc. (SKYW) is experiencing growth driven by flying contract rate increases, fleet modernization, and shareholder-friendly initiatives, with positive earnings estimates for 2024 [1][2]. Group 1: Financial Performance - SkyWest's third-quarter revenues reached $912.8 million, exceeding the Zacks Consensus Estimate of $887.5 million, marking a 19.1% year-over-year increase [4]. - Revenues from flying agreements, which account for 96.7% of total revenue, grew 19.1% from $883.49 million in the prior year [5]. - The airline carried 10.3% more passengers and had 11.8% more departures year-over-year in the reported quarter [5]. Group 2: Fleet Modernization - SkyWest is modernizing its fleet through agreements with major airlines, including Delta, United Airlines, and Alaska Airlines, with plans to operate 278 E175 aircraft by the end of 2026 [6]. - The company has also acquired a 25% stake in Contour Airlines and entered a multi-year contract with United Airlines for 40 CRJ550s [7]. Group 3: Shareholder Initiatives - SkyWest repurchased 217,000 shares for $16.3 million during the third quarter of 2024, with $53 million remaining under its current share repurchase program [8]. Group 4: Stock Performance - SKYW shares have gained 119.2% year-to-date, outperforming its industry and showing a strong earnings surprise history with an average surprise of 79.12% over the last four quarters [9][10]. Group 5: Valuation - From a valuation perspective, SKYW is trading at a discount compared to the industry based on the price-to-book ratio, holding a Value Score of A [14].