Ryanair Stock Plunges 19.7% in a Year: Should You Buy the Dip?

Core Viewpoint - Ryanair Holdings (RYAAY) has experienced a significant decline in share price over the past year, underperforming compared to its industry and other airline operators [1][3] Group 1: Financial Performance and Expectations - RYAAY's passenger volume has increased by 9% year over year, with expectations to reach nearly 200 million passengers in fiscal 2025, an improvement from the previous estimate of 198-200 million [4] - The company ended the third quarter of fiscal 2025 with cash and cash equivalents of $3.31 billion, significantly higher than its current debt of$905 million, indicating a strong balance sheet [6][7] - RYAAY plans to repay a maturing €850 million bond from internal cash resources in September 2025, reflecting its commitment to debt repayment [7] Group 2: Fleet Modernization and Growth Initiatives - RYAAY is modernizing its fleet to meet rising travel demand, with 172 of the 210 Boeing 737-8200 aircraft expected to be delivered by December 31, 2024, and additional orders for 300 Boeing 737-MAX-10 aircraft for delivery between 2027 and 2033 [5] - The company has initiated a share buyback program, having repurchased €700 million worth of shares by August 2024, and is on track to complete an €800 million buyback program by mid-2025 [12] Group 3: Valuation and Market Position - RYAAY is currently trading at a discount compared to the industry based on its enterprise value to total sales ratio, and it has a Value Score of B [13] Group 4: Challenges and Cost Pressures - Production delays at Boeing are impacting RYAAY's fleet expansion plans, leading to a reduction in fiscal 2026 traffic growth targets from 215 million to 206 million passengers [16] - Operating expenses have risen, with staff costs increasing by 18% year over year and total operating expenses up by 8% during the first nine months of fiscal 2025, putting pressure on profit margins [17]