Allegiant Travel (ALGT) Up 10.1% Since Last Earnings Report: Can It Continue?

Core Viewpoint - Allegiant Travel reported a wider-than-expected loss in Q3 2025, raising questions about the sustainability of its recent stock performance, which has outperformed the S&P 500 by 10.1% over the past month [1][2]. Financial Performance - Allegiant Travel posted a Q3 2025 loss of $2.09 per share, exceeding the Zacks Consensus Estimate of a loss of $1.84 per share, and compared to a loss of $2.02 per share in the same quarter last year [3]. - Operating revenues were $561.9 million, missing the Zacks Consensus Estimate of $580.4 million, and fell 0.1% year-over-year. Passenger revenues, which made up 87.9% of total revenues, increased by 1.1% year-over-year [3]. Operational Metrics - Air traffic, measured in revenue passenger miles, grew by 8.7% year-over-year, while capacity, measured in available seat miles (ASMs), increased by 10.2% [4]. - The load factor decreased to 84.3% from 85.6% as traffic growth did not keep pace with capacity expansion [4]. - Airline operating costs per available seat mile, excluding fuel, decreased by 4.7% year-over-year to 8.47 cents, and the average fuel cost per gallon fell by 4.9% year-over-year to $2.55 [5]. Liquidity Position - As of September 30, 2025, Allegiant's total unrestricted cash and investments were $991.2 million, up from $852.7 million in the previous quarter. Long-term debt and finance lease obligations totaled $1.78 billion, slightly up from $1.77 billion [6]. Future Guidance - For Q4 2025, scheduled service ASMs are expected to increase by 10% year-over-year, with total system ASMs projected to rise by 9.5% [7]. - Adjusted earnings per share for Q4 are anticipated to be in the range of $1.50 to $2.50, with an expected adjusted operating margin of 10% to 12% [7]. - For the full year 2025, adjusted consolidated EPS is now expected to exceed $3.00, up from a prior estimate of above $2.25, while adjusted EPS for the airline is anticipated to be above $4.35 [8][9]. Estimate Revisions - In the past month, there has been a notable upward trend in fresh estimates, with the consensus estimate shifting by 58.26% [10]. VGM Scores - Allegiant Travel currently holds a subpar Growth Score of D, but a better Momentum Score of B, and an A score on the value side, placing it in the top quintile for value investors. The overall aggregate VGM Score is B [11]. Industry Context - Allegiant Travel is part of the Zacks Transportation - Airline industry, which has seen American Airlines gain 8.5% over the past month. American Airlines reported revenues of $13.69 billion for the last quarter, reflecting a year-over-year change of +0.3% [13].