Why Is Allegiant Travel (ALGT) Down 21.5% Since Last Earnings Report?

Core Viewpoint - Allegiant Travel has reported a mixed performance in its recent earnings, with a notable decline in share price and a downward trend in estimates, despite beating earnings expectations for Q4 2024 [1][2][9]. Financial Performance - Allegiant reported Q4 2024 earnings per share of $2.10, exceeding the Zacks Consensus Estimate of $1.88, and up from 11 cents per share in the same quarter last year [2]. - Operating revenues reached $627.7 million, surpassing the Zacks Consensus Estimate of $624.8 million, reflecting a year-over-year increase of 2.7% [2]. - Passenger revenues, which constituted 88.2% of total revenues, decreased by 0.4% year-over-year [3]. Operational Metrics - Air traffic, measured in revenue passenger miles, fell by 2.2% year-over-year, while capacity, measured in available seat miles (ASMs), grew by 1.7% [3]. - The load factor decreased to 80.2% from 83.3% in the previous year, indicating that traffic did not keep pace with capacity growth [3]. - Operating costs per available seat mile, excluding fuel, decreased by 2.5% year-over-year to 8.29 cents, while average fuel costs per gallon fell by 22.2% to $2.49 [4]. Liquidity and Debt - As of December 31, 2024, Allegiant's total unrestricted cash and investments were $832.8 million, an increase from $804.6 million in the prior quarter [5]. - Long-term debt and finance lease obligations totaled $1.61 billion, down from $1.77 billion in the previous quarter [5]. Guidance and Projections - For Q1 2025, scheduled service ASMs are expected to increase by 14% year-over-year, with total system ASMs projected to rise by 13.5% [6]. - The operating margin is anticipated to be between 8% and 11%, with adjusted EPS expected in the range of $1.75 to $2.75 [6]. - For the full year 2025, scheduled service ASMs are projected to increase by 17% year-over-year, with total system ASMs expected to rise by 16% [7]. Capital Expenditures - Aircraft-related capital expenditures are expected to be in the range of $285 million to $315 million, with additional capital expenditures for maintenance and other airline needs projected between $85 million to $135 million [8]. Market Sentiment and Estimates - Estimates for Allegiant have trended downward, with a consensus estimate shift of -21.11% over the past month [9]. - Despite the downward revisions, Allegiant holds a Zacks Rank 1 (Strong Buy), indicating expectations for above-average returns in the coming months [11]. Industry Comparison - Allegiant Travel operates within the Zacks Transportation - Airline industry, where competitor LATAM has seen a 6.9% gain over the past month, reporting revenues of $3.34 billion and an EPS of $0.90 [12].