Allegiant Travel (ALGT) Up 32% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Allegiant Travel's recent earnings report shows a mixed performance, with a significant earnings beat but a decline in year-over-year earnings, raising questions about future performance as the stock has outperformed the S&P 500 by 32% in the past month [1][2]. Financial Performance - Allegiant reported Q2 2025 earnings of $1.23 per share, exceeding the Zacks Consensus Estimate of 83 cents, but down 30.5% from the previous year [2]. - Operating revenues reached $689.4 million, slightly below the consensus estimate of $698.4 million, but up 3.5% year-over-year [2]. - Passenger revenues, which made up 89.6% of total revenues, increased by 3.9% year-over-year [3]. Operational Metrics - Air traffic, measured in revenue passenger miles, grew by 12% year-over-year, while capacity, measured in available seat miles (ASMs), increased by 16.1% [3]. - The load factor decreased to 81.9% from 84.7%, indicating that traffic did not keep pace with capacity growth [3]. - Operating costs per available seat mile, excluding fuel, fell by 2.5% year-over-year to 8.29 cents [4]. Cost and Revenue Insights - The average fuel cost per gallon decreased by 22.2% year-over-year to $2.49 [4]. - Total scheduled service passenger revenue per available seat mile fell to 13.01 cents from 13.16 cents a year ago [4]. Liquidity and Debt - As of June 30, 2025, Allegiant's total unrestricted cash and investments were $852.7 million, down from $906.3 million in the previous quarter [6]. - Long-term debt and finance lease obligations totaled $1.77 billion, slightly up from $1.74 billion in the prior quarter [6]. Future Guidance - For Q3 2025, scheduled service ASMs are expected to increase by 10% year-over-year, with adjusted loss per share anticipated in the range of $1.25 to $2.25 [7]. - For the full year 2025, scheduled service ASMs are projected to rise by 13%, with adjusted EPS expected to exceed $3.25 [8]. Industry Comparison - Allegiant Travel is part of the Zacks Transportation - Airline industry, where competitor SkyWest reported a revenue increase of 19.4% year-over-year, with an EPS of $2.91 [13]. - SkyWest's consensus estimate for the current quarter is $2.56 per share, reflecting an 18.5% year-over-year change [14].