It has been about a month since the last earnings report for Allegiant Travel (ALGT). Shares have added about 2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Allegiant Travel due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Allegiant Q1 Earnings Beat on Higher Passenger Revenues
Allegiant's earnings (excluding 46 cents from non-recurring items) of $3.98 per share outpaced the Zacks Consensus Estimate of $3.88. The bottom line also improved year over year.
Although total operating revenues increased 6.2% year over year to $451.6 million, it missed the consensus mark of $454.5 million. The top line was primarily driven by a 5.8% rise in passenger revenues.
Systemwide air traffic (measured in revenue passenger miles: RPMs) in the quarter under review rose 4.3% and capacity (measured in available seat miles: ASMs) expanded 4.9% year over year. Consequently, load factor (percentage of seats filled by passengers) was 82.6%, down 40 basis points as capacity expansion outweighed traffic growth.
Operating cost per available seat miles (CASM) excluding fuel increased 3.7%. However, total scheduled service revenue per available seat miles (TRASM) inched up 1.8% to 11.50 cents. Average fuel cost per gallon (scheduled) dipped 1.8% to $2.13 in the quarter.
During the first quarter, Allegiant rewarded shareholders with a cash dividend worth $11.4 million.
The company anticipates earnings of $13.25-$14.75 per share. Fuel cost per gallon is now anticipated to be $2.26 compared with $2.10 expected earlier. Also, systemwide capacity is estimated to rise 7.5-9.5% year over year. Meanwhile, non-fuel unit costs are expected to dip 1.5-3.5% in the year. Capital expenditures are projected in the $400-$410 million band in the current year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 9.16% due to these changes.
At this time, Allegiant Travel has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Allegiant Travel has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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