Here's Why Investors Should Avoid Allegiant Stock for Now

Core Viewpoint - Allegiant (ALGT) is experiencing significant challenges due to rising operating expenses and a deteriorating liquidity position, negatively impacting its financial performance and attractiveness to investors [1]. Financial Performance - The Zacks Consensus Estimate for current-quarter earnings has decreased by 72.3% over the past 60 days, with a 54% downward revision for the next year's earnings, indicating a lack of confidence from brokers [2]. - Allegiant shares have declined by 40.8% year to date, compared to a 7.3% decline in the industry [3]. Industry and Rank - Allegiant currently holds a Zacks Rank of 5 (Strong Sell), reflecting its poor performance relative to peers [5]. - The industry rank for Allegiant is 149 out of 246, placing it in the bottom 39% of Zacks Industries, which suggests that industry performance significantly influences stock price movements [6]. Operating Expenses - In the first quarter of 2025, Allegiant's operating expenses accounted for 90.7% of total operating revenues, driven by increased labor costs and maintenance expenses [7]. - Labor costs rose by 8.5% year over year, while maintenance and repair expenses increased by 15.1% year over year, further straining profitability [8]. Liquidity Concerns - The current ratio for Allegiant has declined from 1.47 in 2022 to 0.78 in 2023, raising concerns about the company's ability to meet short-term obligations [9].