Allegiant Travel Company, a leisure travel company, provides travel services and products to residents of under-served cities in the United States. The company offers scheduled air transportation on limited-frequency, nonstop flights between under-served cities and leisure destinations. As of February 1, 2024, it operated a fleet of 126 Airbus A320 series aircraft. The company also provides air-related services and products in conjunction with air transportation, including baggage fees, advance seat assignments, travel protection products, priority boarding, a customer convenience fee, food and beverage purchases on board, and other air-related services, as well as use of its call center for purchases. In addition, it offers third party travel products, such as hotel rooms and ground transportation, such as rental cars and hotel shuttle products; and air transportation services through fixed fee agreements and charter service on a year-round and ad-hoc basis. Further, the company operates a golf course. Allegiant Travel Company was founded in 1997 and is based in Las Vegas, Nevada.

Allegiant Travel Company

In trading on Tuesday, the U.S. Global Jets ETF is outperforming other ETFs, up about 5.8% on the day. Components of that ETF showing particular strength include shares of Frontier Group Holdings, up about 16.2% and shares of Allegiant Travel, up about 12.6% on the day.
And underperforming other ETFs today is the Global X MLP & Energy Infrastructure ETF, down about 0.7% in Tuesday afternoon trading. Among components of that ETF with the weakest showing on Tuesday were shares of Kinder Morgan, lower by about 1.9%, and shares of South Bow, lower by about 1.7% on the day.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Tuesday's ETF Movers: JETS, MLPX

Key Points
Non-GAAP EPS of $1.23 in Q2 2025 exceeded expectations by 59.7%, driven by cost reductions rather than revenue strength.
GAAP revenue rose 3.5% to $689.4 million, Non-GAAP EPS was significantly above analyst estimates, despite declines in fare and yield metrics.
Management guided for a loss in Q3 2025, with adjusted airline-only earnings per share expected between $(1.25) and $(2.25) amid continued pressure on fares and demand; The Sunseeker Resort divestiture is pending, with the transaction expected to close during Q3 2025.
Allegiant Travel (NASDAQ:ALGT), the leisure-focused airline serving primarily small and mid-sized cities, released its results on August 4, 2025. The company delivered adjusted (Non-GAAP) earnings per share of $1.23, a substantial beat versus the analyst estimate of $0.77 non-GAAP EPS. GAAP revenue was $689.4 million, coming in just above expectations of $685.07 million in GAAP revenue. While cost discipline was the clearest driver of earnings outperformance, several key demand and revenue metrics—such as yields and ancillary sales—remained under pressure. Overall, the quarter saw top-line growth and meaningful cost reductions, but also highlighted ongoing challenges in the fare environment and non-airline ventures.
Metric
Q2 2025 (3 mos ended June 30)
Q2 2025 Estimate
Q2 2024 (3 mos ended June 30)
Y/Y Change
EPS – Diluted (Non-GAAP)
$1.23
$0.77
$1.77
(30.5%)
Revenue (GAAP)
$689.4 million
$685.07 million
$666.3 million
3.5 %
Operating Margin (Non-GAAP)
7.3 %
10.3%
(3.0) pp
Adjusted Net Income (Non-GAAP)
$22.7 million
$32.5 million
(30.2%)
Adjusted EBITDA (Non-GAAP)
$118.7 million
$118.3 million
0.3 %
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Allegiant Travel’s Business and Strategic Focus
Allegiant operates as a low-cost carrier, primarily targeting leisure travelers in small and medium-sized cities that are often bypassed by larger airlines. Its business model is built around offering non-stop flights to popular vacation spots, employing direct-to-consumer sales, and maintaining a low-cost fleet that is mainly owned or financed in-house. This strategy allows the company to offer low base fares and focus on selling ancillary services for additional revenue.
Recently, Allegiant’s focus areas have included deepening its network in under-served markets, growing ancillary revenue through digital enhancements and loyalty programs, and maintaining tight control over unit costs. The company has also explored adjacent lines of business, such as the Sunseeker Resort, though it is now refocusing efforts on its airline core as it looks to divest this hospitality asset.
Second Quarter Highlights: Progress, Pressures, and Strategic Shifts
The quarter saw Allegiant deliver adjusted diluted earnings per share (non-GAAP) of $1.23, well above analyst consensus, on GAAP revenue growth of 3.5%. This outperformance on the bottom line was the result of tight cost controls rather than significant revenue improvement. Adjusted airline-only operating margin contracted by 1.7 percentage points from the prior year, but key revenue drivers—such as average fares and per-passenger yield—remained under pressure.
Total revenue per available seat mile (TRASM), a core airline GAAP metric, was 11.57¢, falling 11.2% from the prior year. Scheduled service yield—the average fare paid per mile—declined 17.7%. Load factor, which shows how fully planes were filled, also fell to 81.9%, down 2.8 percentage points. These declines reflect ongoing pressure on yields to support bookings.
Ancillary revenue per passenger, covering baggage, seat assignment, and other add-ons, improved by $3 per passenger in the first half of 2025. This was credited to enhanced digital pricing tools and expanded premium seat options through the company's “Allegiant Extra” product offering. However, Third-party revenue streams, such as hotel room nights, declined, with hotel room nights sold slumping 39.3%. Sales from fixed-fee flying contracts also declined modestly.
The quarter also featured a pivotal business development: Allegiant booked $103.3 million in special charges tied to the impending sale of the Sunseeker Resort. This move signals a renewed focus on the company’s core airline business. In terms of network strategy, Allegiant operated a record 37,000 flights, added new nonstop routes, and maintained its emphasis on non-overlapping, competition-light markets. The company also continued to invest in its fleet, adding more Boeing 737 MAX aircraft in 2025, which management said delivered operational and financial improvements over older Airbus models.
Looking Ahead: Guidance, Risks, and Key Watchpoints
Management provided guidance pointing to continued challenges in the immediate future. For Q3 2025, Allegiant expects adjusted airline-only operating margins to turn negative (a loss), with adjusted (non-GAAP) diluted EPS projected at a loss between $1.25 and $2.25. For FY2025, Allegiant still expects adjusted airline-only EPS above $3.25 and adjusted consolidated EPS above $2.25 for the full year, System capacity is forecasted to increase about 12% for the full year, but to remain flat in fiscal 2026 as the company aims for steadier growth.
Investors considering Allegiant in coming quarters should closely monitor the company’s success in boosting yields and ancillary sales as fare pressure continues. Other factors to watch include the progress and financial impact of the Sunseeker Resort divestiture, including the recording of $102.2 million in special charges in Q2 2025 related to the pending sale of Sunseeker Resort and Aileron Golf Course, reflecting a write-down to fair value less estimated costs to sell and other related expenses, management’s ability to align capacity with demand, and the performance of the new Boeing 737 MAX fleet. The company is also exposed to any volatility in jet fuel costs, competitive fare changes, and any ongoing macroeconomic pressures that may dampen leisure travel demand.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
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Allegiant (ALGT) Q2 EPS Jumps 60%

Looking at options trading activity among components of the Russell 3000 index, there is noteworthy activity today in Block Inc (Symbol: XYZ), where a total volume of 82,043 contracts has been traded thus far today, a contract volume which is representative of approximately 8.2 million underlying shares (given that every 1 contract represents 100 underlying shares). That number works out to 115.4% of XYZ's average daily trading volume over the past month, of 7.1 million shares. Particularly high volume was seen for the $68 strike call option expiring July 03, 2025, with 12,556 contracts trading so far today, representing approximately 1.3 million underlying shares of XYZ. Below is a chart showing XYZ's trailing twelve month trading history, with the $68 strike highlighted in orange:
Allegiant Travel Company (Symbol: ALGT) options are showing a volume of 3,973 contracts thus far today. That number of contracts represents approximately 397,300 underlying shares, working out to a sizeable 110.1% of ALGT's average daily trading volume over the past month, of 360,855 shares. Especially high volume was seen for the $60 strike call option expiring July 18, 2025, with 1,914 contracts trading so far today, representing approximately 191,400 underlying shares of ALGT. Below is a chart showing ALGT's trailing twelve month trading history, with the $60 strike highlighted in orange:
And Super Micro Computer Inc (Symbol: SMCI) saw options trading volume of 436,206 contracts, representing approximately 43.6 million underlying shares or approximately 107.3% of SMCI's average daily trading volume over the past month, of 40.6 million shares. Particularly high volume was seen for the $50 strike call option expiring June 27, 2025, with 39,802 contracts trading so far today, representing approximately 4.0 million underlying shares of SMCI. Below is a chart showing SMCI's trailing twelve month trading history, with the $50 strike highlighted in orange:
For the various different available expirations for XYZ options, ALGT options, or SMCI options, visit StockOptionsChannel.com.
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Noteworthy Friday Option Activity: XYZ, ALGT, SMCI

Shares of Allegiant Travel Company (ALGT) have not had a good time on the bourses of late, declining in double digits so far this year. The disappointing price performance resulted in ALGT underperforming its industryin the said time frame. Additionally, ALGT’s price performance is unfavorable to that of other industry players like Southwest Airlines Co. (LUV) and Ryanair Holdings RYAAY in the same timeframe.
YTD Price Comparison
Image Source: Zacks Investment Research
Given the significant pullback in ALGT’s shares currently, investors might be tempted to snap up the stock. But is this the right time to buy ALGT? Let’s find out.
Headwinds Weighing on ALGT Stock
Allegiant is being hurt by the tariff-induced challenging macroeconomic backdrop. The ongoing economic uncertainties and the resultant reduction in consumer and corporate confidence have the potential to hurt domestic air travel demand. As a result, it becomes difficult to predict near-term demand, leading to the withdrawal of the company’s 2025 guidance.
Production delays at Boeing, due to quality control checks and regulatory reviews by the Federal Aviation Administration, have been hurting the fleet-related plans of most airline companies, and it is no different for ALGT. Delays in aircraft delivery will lead to lower profitability than expected from the addition of these aircraft to ALGT’s existing fleet. Further, ALGT will be burdened with increased maintenance costs for those aircraft that would have otherwise been retired and raised interest costs for funds borrowed for pre-delivery deposits. Delivery delays are also expected to limit capacity growth going forward.
Labor cost increase of 19.2% in 2024 swamped the 20.3% increase in total operating expenses in 2024, despite costs on aircraft fuel decreasing year over year (down 9.8% in 2024). The increase was attributable to deals inked with various labor groups. ALGT expects to continue experiencing increased cost pressure from the labor agreements.
What Do Earnings Estimates Say for ALGT?
In the past 60 days, the Zacks Consensus Estimate for ALGT’s second-quarter and third-quarter 2025 earnings and full-year 2025 earnings have moved south.
Image Source: Zacks Investment Research
Upbeat Air Travel Demand & Fleet Additions Aid ALGT
Improvement in air-travel demand, following the end of the pandemic and normalization of economic activities, bodes well for Allegiant's top line. While air travel demand remains particularly strong on the leisure front, business travel has also made an encouraging comeback. With people taking to the skies, ALGT’s top line increased 6.5% on a year-over-year basis in first-quarter 2025 due to a 6.3% rise in passenger revenues, which accounted for the bulk (88.2%) of the top line. Given this encouraging backdrop, for the second quarter of 2025, capacity (measured in available seat miles or ASMs) (for scheduled service) is expected to increase 15.5% on a year-over-year basis. Total system ASM is projected to gain 15% on a year-over-year basis. The operating margin is expected to be between 6% and 8%.
Allegiant’s fleet-modernization initiatives to cater to the travel demand are encouraging. The inclusion of modern planes in its fleet and the retirement of the old ones aligns with its environmentally-friendly approach. In 2013, ALGT started transitioning its fleet from a mixture of MD-80 aircraft and Boeing 757 aircraft to an all-Airbus fleet, which ended in November 2018. During this period, ALGT witnessed significant improvement in fuel efficiency.
In January 2022, ALGT inked a new purchase agreement with Boeing to purchase 50 newly manufactured 737 MAX aircraft with the option of purchasing up to an additional 80 737 MAX aircraft. This aircraft is likely to burn up to 20% less fuel on a per-passenger basis than the older Airbus A320 aircraft in ALGT’s fleet. ALGT already took delivery of four 737 MAX aircraft in 2024 and four in the first quarter of 2025. Currently, eight more aircraft are anticipated to be delivered in the last three quarters of 2025.
ALGT ended 2024 with 125 (34 A319, 87 A320 and 4 737-8200) planes in its fleet. ALGT ended first-quarter 2025 with 127 (34 A319, 85 A320 and 8 Boeing 737-8200) planes. The company aims to have a fleet size of 126 by the end of second-quarter 2025, 123 by the end of third-quarter 2025 and 122 at 2025-end.
Other Tailwinds Working in Favor of ALGT
ALGT’s liquidity position looks encouraging. The airline ended first-quarter 2025 with cash and cash equivalents of $897.6 million, higher than the current debt level of $266.6 million. This implies that the company has sufficient cash to meet its current debt obligations. Meanwhile, the long-term debt level has decreased to $1.74 billion at the end of first-quarter 2025 from $1.79 billion at first-quarter 2024-end.
A solid balance sheet enables the company to reward shareholders with dividends and share repurchases. As a reflection of its shareholder-friendly stance, ALGT paid out dividends worth $21.9 million and repurchased shares worth $6 million in 2024. During first-quarter 2025, ALGT repurchased shares worth $11.1 million (did not pay any dividends). Such shareholder-friendly initiatives should boost investor confidence and positively impact the bottom line.
Impressive Valuation Picture for ALGT Stock
From a valuation perspective, ALGT is trading at a discount compared to the industry, going by its forward 12-month price-to-sales ratio. The reading is also below its median over the last five years. The company has a Value Score of A.
ALGT P/S Ratio (Forward 12 Months) Vs. Industry
Image Source: Zacks Investment Research
To Conclude
It is understood that ALGT stock is attractively valued, and strong passenger volumes bode well for Allegiant. Efforts to modernize its fleet are praiseworthy as well. Despite these positives, we advise investors not to buy ALGT stock now due to headwinds like high labor costs, Boeing and Airbus-related delivery delays and share price volatility. ALGT is also hurt by tariff-induced economic uncertainties and the resultant reduction in consumer and corporate confidence.
We advise investors to wait for a better entry point. For those who already own the stock, it will be prudent to stay invested. The company’s current Zacks Rank #3 (Hold) justifies our analysis. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Allegiant Stock Plunges 46.6% YTD: Should You Buy the Dip?

European carrier, Ryanair Holdings RYAAY,has been benefiting from upbeat travel demand. RYAAY’s measures to expand its fleet and cater to the rising travel demand also look encouraging. A solid balance sheet implies RYAAY’s financial flexibility. The positive sentiment surrounding RYAAY stock is evident from the fact that the Zacks Consensus Estimate for the second quarter and full-year 2025 earnings has been revised upward in the past 90 days.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for the second quarter and full-year 2025 earnings per share indicates growth of 77.9% and 30.5% from the respective 2024 figures. The company’s long-term (three to five years) earnings growth rate is 13.76%.
Let’s delve deeper.
Upbeat Air Travel Demand & Fleet Additions Aid RYAAY
Passenger volume has been robust at Ryanair following the end of the pandemic and normalization of economic activities. With travel bookings rising across the industry, passenger revenues at Ryanair are also rising. Because of this air-travel demand strength, RYAAY's traffic grew 9% in fiscal 2024. In fiscal 2025, Ryanair carried more than 200.2 million passengers, becoming the first European carrier to do so in a year. Given this encouraging backdrop, Ryanair expects its fiscal 2026 traffic to grow 3% to 206 million passengers.
Ryanair’s fleet-modernization initiatives to cater to the improvement in travel demand are encouraging. The inclusion of modern planes in its fleet and the retirement of the old ones aligns with its environmentally-friendly approach. Between March 1999 and March 2025, Ryanair took delivery of 532 Boeing 737NG aircraft, one Boeing 737-700 aircraft and 176 new Boeing 737-8200s under its contracts with Boeing and disposed of 122 Boeing 737NG aircraft, including 77 lease hand-backs. During fiscal 2025, Ryanair took delivery of 30 new Boeing 737-8200 aircraft. The latest inclusions, apart from having all basic amenities, result in improved fuel efficiency.
As of March 31, 2025, 181 of the 210 Boeing 737-8200 aircraft (to be purchased under the 2014 contract) had been delivered. The remaining 29 aircraft are expected to be delivered ahead of the summer season of fiscal 2025. In May 2023, 300 new Boeing 737-MAX-10 aircraft orders were placed for delivery between 2027 and 2033. Ryanair expects these fuel-efficient MAX jets to generate substantial growth.
Some Other Tailwinds Working in Favor of RYAAY Stock
RYAAY has a solid balance sheet. The low-cost carrier ended fourth-quarter fiscal 2025 with cash and cash equivalents of $4.28 billion, much higher than the current debt level of $911 million. This implies that the company has sufficient cash to meet its current debt obligations. Meanwhile, the long-term debt level has decreased to $1.81 billion at the end of fourth-quarter fiscal 2025 from $2.74 billion at fourth-quarter fiscal 2024-end. RYAAY's efforts to repay its debts are encouraging too.
Concurrent with earnings announcement for the fourth quarter of fiscal 2025 (ended March 31, 2025), RYAAY announced its plans to pay down maturing bond debt (which includes an €850 million bond in September 2025 and €1.2 billion in May 2026), while still funding its aircraft and engine capex from internal resources.
Long-Term Debt to Capitalization
Image Source: Zacks Investment Research
A strong balance sheet enables the company to reward shareholders with dividends and share repurchases. In line with its capital allocation policy, €0.40 cumulative dividends per share were paid during fiscal 2025, and a final dividend of €0.227 per share is due in September 2025 (subject to AGM approval).
RYAAY is also active on the share buyback front. During fiscal 2025, Ryanair purchased and canceled 7% of its issued share capital, comprising more than 77 million shares, and has now retired almost 36% of its issued share capital since 2008. In April 2025, RYAAY repurchased almost 1 million shares, completing the €800 million share buyback program. In May 2025, RYAAY’s board approved a follow-on €750 million share buyback program, which will likely run for the next six to 12 months.
RYAAY's Price Performance Soars
Shares of RYAAY have had a good time on the bourses of late, improving in double digits so far this year. The encouraging price performance resulted in RYAAY outperforming the Zacks Airline industry in the said time frame. Additionally, RYAAY’s price performance is favorable to that of other airline operators like Alaska Air Group, Inc. (ALK) and Allegiant Travel Company (ALGT) in the same timeframe.
RYAAY Stock YTD Price Comparison
Image Source: Zacks Investment Research
Wrapping Up
The positives surrounding the stock (as highlighted throughout the write-up) outweigh the concerns regarding the production delays at Boeing, high staff costs and escalated air traffic control fees. We, therefore, encourage investors to add RYAAY stock to their portfolios for healthy returns. The company’s Zacks Rank #1 (Strong Buy) further supports our thesis. You can see the complete list of today’s Zacks #1 Rank stocks here.
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Ryanair Holdings PLC (RYAAY) : Free Stock Analysis Report
Alaska Air Group, Inc. (ALK) : Free Stock Analysis Report
Allegiant Travel Company (ALGT) : Free Stock Analysis Report
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Ryanair's EPS Estimates Northbound: Time to Buy the Stock?

In the past week, Allegiant Travel Company ALGT and Copa Holdings CPA reported better-than-expected earnings as well as revenues for first-quarter 2025 despite the tariff-induced uncertainty. Delta Air Lines DAL was also in the news following its decision to fly nonstop to Copenhagen and Stockholm.
Ryanair Holdings RYAAY reported impressive traffic numbers for April, driven by upbeat air-travel demand. Mexican carrier Controladora Vuela Compañía de Aviación VLRS or Volaris reported a year-over-year increase in revenue passenger miles (RPMs: a measure of air traffic) for April.
Read the last Airline Roundup here.
Recap of the Most Recent Important Stories
1. Copa Holdings' first-quarter 2025 earnings per share of $4.28 surpassed the Zacks Consensus Estimate of $3.77 and improved 2.2% year over year. Revenues of $899.2 million beat the Zacks Consensus Estimate of $889.5 million and inched up 0.6% year over year due to an 8.7% increase in onboard passengers.
Passenger revenues (which contributed 95.6% to the top line) remained flat year over year at $859 million. Despite the increase in onboard passengers, a 9.1% decrease in yield hurt passenger revenues. CPA’s management expects consolidated capacity to grow 7-8% year over year.
2. Allegiant Travel reported first-quarter 2025 earnings per share (excluding 8 cents from non-recurring items) of $1.81, which surpassed the Zacks Consensus Estimate of $1.54. The company reported earnings of 57 cents per share in the year-ago quarter.
Operating revenues of $699.1 million surpassed the Zacks Consensus Estimate of $690.3 million and improved 6.5% on a year-over-year basis. For the second quarter of 2025, ASM (for scheduled service) is expected to increase 15.5% on a year-over-year basis.
ALGT currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
3. Ryanair reported solid traffic numbers for April 2025, driven by upbeat air travel demand. The number of passengers transported on Ryanair flights was 18.3 million in April 2025, reflecting a 6% year-over-year increase. The April load factor (percentage of seats filled by passengers) of 93% was higher than the year-ago reading of 92%, reflecting consistent passenger demand for the airline's services.
4. This summer, Delta plans to fly nonstop to Copenhagen and Stockholm, as well as to more than 35 destinations across Scandinavia, through its partnership with Scandinavian Airlines System ("SAS"), the flag carrier of Denmark, Norway and Sweden. We remind investors that DAL and SAS inked a codeshare agreement last year to improve connectivity between North America and Scandinavia.
Under the expansion-oriented move, DAL will operate non-stop flights (thrice a week) on the Minneapolis–St. Paul to Copenhagen route from May 22. Additionally, a direct summer service from New York–JFK to Copenhagen and JFK to Stockholm will start on April 14. These flights will operate daily. Moreover, out of the 35 additional destinations, six are in Denmark, 14 are in Norway and 15 are in Sweden.
5. For April, Volaris reported a 16.9% year-over-year increase in consolidated capacity (measured in available seat miles). The load factor (% of seats filled by passengers) decreased 3.1 percentage points to 81.6% on a consolidated basis. The metric fell as the increase in consolidated traffic (12.7%) was less than the increase in consolidated capacity. During the month, Volaris transported 2.6 million passengers, up 14.8% year over year.
Airline Stocks Performance
The following table shows the price movement of the major airline players over the past week and during the last six months.
Image Source: Zacks Investment Research
The NYSE ARCA Airline Index increased by 5.4% to $55.03 as all airline stocks traded in the green over the past week. Over the past six months, the NYSE ARCA Airline Index has decreased by 23.3%.
What’s Next in the Airline Space?
With signs of easing in trade tensions emerging, investors keenly await further updates on the issue. Updates on declining fuel costs, a key input for airlines, is also eagerly awaited.
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Ryanair Holdings PLC (RYAAY) : Free Stock Analysis Report
Delta Air Lines, Inc. (DAL) : Free Stock Analysis Report
Copa Holdings, S.A. (CPA) : Free Stock Analysis Report
Allegiant Travel Company (ALGT) : Free Stock Analysis Report
Controladora Vuela Compania de Aviacion, S.A.B. de C.V. (VLRS) : Free Stock Analysis Report
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Airline Stock Roundup: ALGT & CPA's Q1 Earnings, DAL's Expansion

Southwest Airlines (LUV) came out with a quarterly loss of $0.13 per share versus the Zacks Consensus Estimate of a loss of $0.18. This compares to loss of $0.36 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of 27.78%. A quarter ago, it was expected that this airline would post earnings of $0.45 per share when it actually produced earnings of $0.56, delivering a surprise of 24.44%.
Over the last four quarters, the company has surpassed consensus EPS estimates four times.
Southwest, which belongs to the Zacks Transportation - Airline industry, posted revenues of $6.43 billion for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 0.40%. This compares to year-ago revenues of $6.33 billion. The company has topped consensus revenue estimates three times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Southwest shares have lost about 26.4% since the beginning of the year versus the S&P 500's decline of -10.1%.
What's Next for Southwest?
While Southwest has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Southwest: mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and current fiscal year change in the days ahead. The current consensus EPS estimate is $0.70 on $7.6 billion in revenues for the coming quarter and $1.46 on $28.77 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Transportation - Airline is currently in the bottom 38% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Allegiant Travel (ALGT), another stock in the same industry, has yet to report results for the quarter ended March 2025. The results are expected to be released on May 6.
This travel services company is expected to post quarterly earnings of $1.54 per share in its upcoming report, which represents a year-over-year change of +170.2%. The consensus EPS estimate for the quarter has been revised 24.9% lower over the last 30 days to the current level.
Allegiant Travel's revenues are expected to be $688.99 million, up 5% from the year-ago quarter.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Southwest Airlines (LUV) Reports Q1 Loss, Tops Revenue Estimates

European carrier Ryanair Holdings RYAAY looks highly unattractive from a valuation standpoint. Considering the forward 12-month price-to-sales ratio (P/S-F12M), RYAAY has a forward 12-month P/S-F12M of 1.56X compared with 1.16X for the industry.
RYAAY P/S Ratio (Forward 12 Months) Vs. Industry
Image Source: Zacks Investment Research
RYAAY has a Value Score of C.
Now, the question is whether it is worth buying, holding, or selling the RYAAY stock at current prices. Let us delve deeper to find out.
Risks Weighing on RYAAY Stock
Production delays at Boeing have been hurting the fleet-related plans of most airline companies, and it is no different for RYAAY. RYAAY is actively in talks with Boeing leadership to speed up aircraft deliveries and has also visited Seattle at the beginning of January. Although B737 production is recovering from Boeing’s strike in late 2024, it is still slow to deliver sufficient aircraft ahead of the summer season of fiscal 2025.
RYAAY anticipates nine deliveries before the summer season of fiscal 2025, while the remaining 29 Gamechangers of the 210 orderbook are likely to be delivered before March 2026. Additionally, Boeing expects the MAX-10 to be certified in late 2025, followed by the delivery of the first 15 MAX-10s in Spring 2027. Given that the risk of delivery delays remains high, Ryanair initially lowered its fiscal 2026 traffic target from 215 million passengers to 210 million passengers, and now this has been reduced to 206 million passengers.
Escalating operating expenses due to high staff costs and higher air traffic control fees are hurting Ryanair’s bottom line. During the first nine months of fiscal 2025, staff costs increased 18% year over year, primarily due to the larger fleet and Boeing delivery delays, which resulted in higher crewing ratios and the annualization of crew productivity pay increases.
Airport and handling charges rose 13% year over year owing to traffic growth, higher landing, ground air traffic control and handling rates. As a result, total operating expenses rose 8% year over year during the first nine months of fiscal 2025. High costs naturally put pressure on margins.
RYAAY’s Price Performance
Shares of RYAAY have not had a good time on the bourses of late, declining in double-digits over the past year. The disappointing price performance resulted in RYAAY underperforming the Zacks Airline industry in the said time frame. Additionally, RYAAY’s price performance compares unfavorably with that of other airline operators, such as Alaska Air Group, Inc. (ALK) and Allegiant Travel Company (ALGT), in the same timeframe.
RYAAY Stock One-Year Price Comparison
Image Source: Zacks Investment Research
Tailwinds Working in Favor of RYAAY Stock
Despite facing multiple Boeing delivery delays, RYAAY's traffic grew 9% year over year during the first nine months of fiscal 2025. Given this backdrop, Ryanair expects its fiscal 2025 traffic to reach almost 200 million (+9%) passengers, subject to no further adverse news on Boeing delivery delays. This marks an improvement from the prior view of reaching 198-200 million passengers (+8%).
Ryanair’s fleet-modernization initiatives to cater to the travel demand look encouraging. The inclusion of modern planes in its fleet and the retirement of the old ones aligns with its environmental-friendly approach. The new inclusions, apart from having all basic amenities, result in improved fuel efficiency. Ryanair expects these fuel-efficient MAX jets to generate substantial growth.
RYAAY has a solid balance sheet. The low-cost carrier ended third-quarter fiscal 2025 with cash and cash equivalents of $3.31 billion, much higher than the current debt level of $905 million. This implies that the company has sufficient cash to meet its current debt obligations. Meanwhile, the long-term debt level has decreased to $1.79 billion at the end of third-quarter fiscal 2025 from $2.72 billion at third-quarter fiscal 2024-end. RYAAY's efforts to repay its debts are encouraging too.
Concurrent with the earnings announcement for the third quarter of fiscal 2025 (ended Dec. 31, 2024), RYAAY announced it is gearing up to repay a maturing €850 million bond in September 2025 from internal cash resources.
Long-Term Debt to Capitalization
Image Source: Zacks Investment Research
A strong balance sheet enables the company to reward shareholders with dividends and share repurchases. Concurrent with RYAAY’s earnings announcement for the third quarter of fiscal 2025 (ended Dec. 31, 2024), RYAAY announced that it has completed more than 50% of its current €800m buyback program and is on track to complete this program by mid-2025. On completion, Ryanair will have returned almost €9 billion (including dividends) to shareholders since 2008, with approximately 36% of the issued share capital repurchased and canceled.
How Should Investors Approach RYAAY Stock?
It is understood that RYAAY stock is currently unattractively valued. Moreover, production delays at Boeing have been hurting the fleet-related plans of the company. Escalating operating expenses due to high staff costs and higher air traffic control fees are weighing on the bottom line.
Despite the headwinds, we advise investors not to sell RYAAY stock now, given its solid balance sheet, which increases the company’s financial flexibility. RYAAY’s measures to expand its fleet, to cater to the rising travel demand, also look encouraging. We advise investors to wait for a better entry point. For those who already own the stock, it will be prudent to stay invested. The company’s current Zacks Rank #3 (Hold) justifies our analysis.
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Ryanair Holdings PLC (RYAAY) : Free Stock Analysis Report
Alaska Air Group, Inc. (ALK) : Free Stock Analysis Report
Allegiant Travel Company (ALGT) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Should Investors Retain RYAAY Stock Despite Its Higher Valuation?

Allegiant Travel Company ALGT trimmed its capacity growth forecast for the current year due to weakness in leisure demand during off-peak periods. The Las Vegas, NV-based low-cost carrier now expects capacity for 2025 to grow 13% year over year from 17% estimated previously. On a brighter note, management said that demand remains strong in the peak weeks of March.
Due to the softness in leisure air travel demand, witnessed in the shoulder period (a travel period between the peak and off-peak seasons), ALGT’s management expects total unit revenues or TRASM in the first quarter of 2025 to decline just more than 7% from the first-quarter 2024 actuals.
Cost performance is better than expected in the current quarter. ALGT has tightened its March quarter earnings guidance, now expecting consolidated EPS of approximately $1.50 per share compared with its previous range of $1.50-$1.75 per share.
ALGT’s Passenger Traffic Up 2.9% in February
Allegiant unveiled the above forecast while disclosing its February traffic report. Despite the weakness in leisure travel demand observed during off-peak periods, ALGT carried around 1.28 million passengers under its scheduled service in February, reflecting a 2.9% year-over-year increase.
Scheduled traffic (measured in revenue passenger miles) rose 4.7% from the February 2024 levels. Capacity (measured in available seat miles) for scheduled service jumped 10.7% year over year. Despite this growth in traffic, capacity expanded even more, which led to a decline in the load factor (% of seats filled by passengers) to 79.5% from 84% in February 2024.
Total departures (scheduled services) increased 9.7% in February 2025 from a year ago. For the total system (including scheduled service and fixed fee contract), capacity increased 10.6% in February 2025 on a year-over-year basis. The fuel price per gallon in February is estimated to be $2.70.
ALGT’s Impressive Performance
We believe that the weakness observed concerning leisure travel demand is a temporary phenomenon. The overall scenario about air travel demand remains impressive. Driven by upbeat air travel demand, ALGT shares have gained in double-digits over the past six months, outperforming the Zacks Transportation - Airline industry and fellow low-cost carriers Southwest Airlines LUV and JetBlue Airways JBLU.
Six-Month Price Performance
Image Source: Zacks Investment Research
Expansion Efforts Look Good
To meet the impressive air travel demand scenario, ALGT is focusing on adding new routes to broaden its network. To this end, the carrier announced late last year the addition of 44 new nonstop routes to its network. The expansion includes 11 routes to three new cities: Gulf Shores, Alabama, Colorado Springs, Colorado and Columbia, South Carolina.
The introduction of the flights, which started operating in February, has expanded the airline's network options in 51 cities around the United States. The pocket-friendly flights offer convenient air service to premier vacation destinations.
To meet the upbeat demand scenario, Allegiant has been constantly focusing on increasing and modernizing its fleet. ALGT’s fleet size at 2019-end was 91. Despite coronavirus-related woes, the fleet size increased to 95 in 2020. Fleet size expanded to 125 at 2024-end.
Allegiant Stock is Undervalued
ALGT looks highly attractive from a valuation standpoint. With a forward price-to-sales (P/S) ratio of 0.33, the stock trades at a significant discount to industry levels. The reading is also below its five-year average. ALGT has a Value Score of A.
Image Source: Zacks Investment Research
It Still Isn’t an Opportune Time to Buy ALGT Stock
Despite the above-mentioned tailwinds, there are a couple of factors that keep us cautiously optimistic. Allegiant is being hurt by rising operating expenses. The northward movement in labor expenses is hurting ALGT’s bottom line. Expenses on salaries and related costs were up 19% year over year in 2024.
With U.S. airlines grappling with labor shortage, the bargaining power of this group has naturally increased as air-travel demand is buoyant, having bounced back very strongly from the pandemic lows. This has resulted in an increase in labor deals being inked in the space recently, which, in turn, has contributed to the uptick in labor costs. ALGT too has also inked quite a few labor deals of late. For example, last year its flight attendants approved a five-year deal, which resulted in a significant increase in their pay.
We are also concerned about its high debt levels. The company’s long-term debt at 2025-end was $1.25 billion, up 29% from 2019 levels.
Long-Term Debt to Capitalization
Image Source: Zacks Investment Research
Given these challenges, buying the stock seems premature now. Instead, one should stay on the sidelines and wait for a better entry point.
ALGT currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.3% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Southwest Airlines Co. (LUV) : Free Stock Analysis Report
JetBlue Airways Corporation (JBLU) : Free Stock Analysis Report
Allegiant Travel Company (ALGT) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

How Should You Play ALGT Stock Post FY25 Capacity Forecast Cut?

LATAM Airlines Group (LTM) reported a year-over-year increase in revenue passenger-kilometers (RPK: a measure of air traffic) for February 2025.
LATAM Airlines reported a 4.4% year-over-year increase in consolidated capacity, measured in available seat kilometers (ASK). This growth was mainly driven by a 9.1% increase in the company’s international operations. LTM’s revenue passenger kilometers increased 3.1% year over year. Although traffic improved on a year-over-year basis, it failed to outpace capacity expansion. As a result, the load factor (percentage of seats filled by passengers) fell to 83.3% from 84.4% in February 2024.
During the month, LATAM Airlines transported more than 6.5 million passengers, an increase of 1.8% year over year.
Apart from LTM, other airline companies that have reported traffic numbers recently are Ryanair Holdings RYAAY and Allegiant Travel Company ALGT.
European carrier, Ryanair, reported solid traffic numbers for February 2025, driven by upbeat air-travel demand.
The number of passengers transported on Ryanair flights was 12.6 million in February 2025, reflecting a 14% year-over-year increase. RYAAY’s traffic in February was higher than the January reading of 12.4 million.
The February load factor of 92% remained flat on a year-over-year basis. The figure was higher than the load factor of 91% reported in January 2025.
Notably, RYAAY operated more than 71,360 flights in February 2025. This marks an improvement from the prior month wherein growth at RYAAY was hampered by 38 Boeing BA delayed deliveries.
Allegiant’s scheduled traffic (measured in revenue passenger miles) in January 2025 rose 7.4% from the year-ago levels. Capacity (measured in available seat miles) for scheduled service jumped 9.9% year over year.
Despite this traffic growth, capacity expanded even more significantly by 9.9%, which led to a slight decline in the load factor (% of seats filled by passengers) to 78.8% from 80.7% in the prior year.
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The Boeing Company (BA) : Free Stock Analysis Report
Ryanair Holdings PLC (RYAAY) : Free Stock Analysis Report
Allegiant Travel Company (ALGT) : Free Stock Analysis Report
LATAM Airlines Group S.A. (LTM) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Indicator	TTM Median
P/E	0.00 21.57
Price/Sales	0.36 1.27
P/B	0.96 2.25
P/FCF	5.10 17.73

Indicator	TTM Median
ROE	0.00 15.62
ROA	0.00 6.45
ROI	0.00 9.56
Net Worth	1.05 1.27
Quick Ratio	0.87 1.16
Current Ratio	0.90 1.57

Indicator	TTM Median
Net Profit Margin	0.00 7.30
Operating Margin	0.00 10.18
Gross Margin	25.83 32.61
Return on tangible equity	0.00 25.97

Indicator	TTM Median
EPS	2.10 0.49
EPS Forecast	1.88 0.52
Revenue	699.00M 194.00M
Gross Profit	187.00M —
EBITDA	128.00M —

Allegiant Travel Company

Fundamental ALGT

Valuation

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Revenue