One-glance verdict
Overvalued
$-34.61 our estimate vs market $96.25
Wall Street consensus: $119.07 (-444.1% lower than our fair-value estimate)
378% below our estimate, beyond the bull case
Fundamentals snapshot
Allegiant Travel Company
ALGT · NMS · Industrials · Airlines
Current price
$96.25
52-week range
$61.36 - $123.63
Market cap
$2.63B
Balance sheet
Distressed
1.32x Concerning
Net debt $2.15B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
0 Risks
3 rewards · 0 risks
- Reward Revenue grew 26.4% last year.
- Reward Returns 3.9% on equity, ahead of 40% of its peers.
- Reward Free cash flow was positive in 5/10 years.
What this company does
Allegiant Travel Company
Allegiant Travel Company makes money by flying people to fun vacation spots from smaller cities that don't have many direct flights, and they also sell extras like seat upgrades and hotel rooms. This is important because they focus on a specific group of travelers and offer a bundle of services, helping them keep their profit margins (the percentage of money left after paying for everything it costs to run the business) healthy. They even own a golf course as part of their leisure offerings, diversifying how they bring in money beyond just plane tickets.
How the company got here
Allegiant Travel Company was founded in 1997 and began its journey as a charter service, eventually evolving into a scheduled passenger airline. The company went through a reorganization in 2000, leading to its public offering in 2006. Allegiant carved out a niche by focusing on connecting smaller, underserved cities with popular leisure destinations, a strategy that allowed it to remain profitable even during challenging economic times. Over the years, Allegiant has expanded its offerings beyond just flights, incorporating vacation packages and other travel-related services to create a more comprehensive leisure travel experience. The company also made a significant move into the hospitality sector with the development of its Sunseeker Resort.
What it actually does
Allegiant Travel Company is primarily a leisure travel provider. Its core business is operating Allegiant Air, a low-cost airline that offers scheduled flights. Beyond air transportation, Allegiant also sells a variety of travel add-ons and services. These include things like baggage fees, advance seat assignments, and travel protection plans. They also partner with third parties to offer hotel rooms, rental cars, and travel insurance, essentially providing a one-stop shop for vacation planning.
Allegiant Air
This is Allegiant's main business and the foundation of the company. Allegiant Air operates as a low-cost carrier, focusing on providing affordable, nonstop flights. It connects smaller and mid-sized cities, often overlooked by larger airlines, directly to popular vacation destinations. The airline's strategy involves flying less frequently on these routes and generating significant revenue from optional services purchased by passengers, such as checked bags, seat selection, and priority boarding. This approach helps keep base fares low while increasing the overall value of each trip for the customer and revenue for the company.
Sunseeker Resort
Allegiant's foray into the hospitality industry is centered around its Sunseeker Resort in Charlotte Harbor, Florida. This segment of the business offers hotel accommodations, dining, and event spaces. It represents a strategic expansion beyond air travel, aiming to capture more of the leisure traveler's spending by providing a complete vacation experience. The resort is designed to attract guests looking for a leisure destination, complementing the airline's focus on connecting travelers to such locations.
What management is betting on now
Allegiant's current strategy involves a dual focus on enhancing its airline operations and growing its hospitality segment. Management is prioritizing improving the profitability of its airline business through fleet modernization, including the integration of new Boeing 737 MAX aircraft, which are expected to improve fuel efficiency and operational economics. Simultaneously, the company is focused on maximizing the return on its Sunseeker Resort investment by driving bookings and ancillary revenue. The company is also exploring strategic acquisitions, such as the potential purchase of Sun Country Airlines, to expand its operational footprint and potentially reduce earnings volatility.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q4
$24.04M
FY2025 Q1
$116.93M
FY2025 Q2
$-46.51M
FY2025 Q3
$-135.33M
FY2025 Q4
$90.41M
FY2026 Q1
$222.64M
FY2026 Q2
$-74.63M
FY2026 Q3
$-264.14M
Revenue
$961.56M
Net income
$-15.18M
Diluted EPS
-0.56
Operating cash flow
$-210.97M
Free cash flow
$-264.14M
Fetching…
Sources
Revenue
$943.49M
Net income
$-4.86M
Diluted EPS
-0.21
Operating cash flow
$46.08M
Free cash flow
$-74.63M
Fetching…
Sources
Revenue
$732.43M
Net income
$42.48M
Diluted EPS
2.30
Operating cash flow
$268.06M
Free cash flow
$222.64M
Fetching…
Sources
Revenue
$656.19M
Net income
$31.94M
Diluted EPS
1.82
Operating cash flow
$112.17M
Free cash flow
$90.41M
Fetching…
Sources
Revenue
$561.93M
Net income
$-43.57M
Diluted EPS
-2.41
Operating cash flow
$-6.05M
Free cash flow
$-135.33M
Fetching…
Sources
Revenue
$689.38M
Net income
$-65.17M
Diluted EPS
-3.62
Operating cash flow
$92.24M
Free cash flow
$-46.51M
Fetching…
Sources
Revenue
$699.07M
Net income
$32.10M
Diluted EPS
1.73
Operating cash flow
$191.41M
Free cash flow
$116.93M
Fetching…
Sources
Revenue
$627.70M
Net income
$-216.23M
Diluted EPS
-12.12
Operating cash flow
$84.38M
Free cash flow
$24.04M
Fetching…
Sources
Is it cheap or expensive?
Fair value $-34.61 vs current price $96.25
Wall Street consensus is the average analyst price target: $119.07 (-444.1% lower than our fair-value estimate).
Our most-likely fair value is $-34.61 a share — about 136.0% below today's price of $96.25, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Distressed
Net debt $2.2B. Interest coverage 1.3x.
Net debt
$2.15B
Interest coverage
1.32x
Allegiant Travel Company's profit covers its interest bill about 1.3 times over. which is stronger than most peers shown here and 3 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
ALGT
BASELINE
Allegiant Travel Company
Total debt $3.01B Interest coverage 1.32x This is the baseline the peer rows are being compared against.
Total debt $37.21B Interest coverage 0.95x -28% vs ALGT Carries about 1.4x less debt cushion than ALGT.
Total debt $9.35B Interest coverage -0.58x -100% vs ALGT This peer has almost no interest-payment cushion compared with ALGT.
Total debt $2.45B Interest coverage 5.92x +349% vs ALGT Carries about 4.5x more debt cushion than ALGT.
Total debt $34.29B Interest coverage 4.26x +223% vs ALGT Carries about 3.2x more debt cushion than ALGT.
Total debt $5.05B Interest coverage -13.55x -100% vs ALGT This peer has almost no interest-payment cushion compared with ALGT.
What you should know
The case for and against ALGT
3 Rewards
0 Risks
Rewards
-
Revenue grew 26.4% last year.
-
Returns 3.9% on equity, ahead of 40% of its peers.
-
Free cash flow was positive in 5/10 years.
Risks
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
35.00x
Forward P/E
9.62x
P/B
1.48x
P/S
0.80x
EV/EBITDA
10.32x
PEG ratio
0.85x
Profitability
How much profit each dollar creates
Gross margin
23.3%
Operating margin
8.3%
Net margin
1.7%
ROE
3.9%
ROA
3.2%
Health
Liquidity and balance-sheet strength
Debt / equity
1.70x
Current ratio
0.85x
Quick ratio
0.67x
Total debt
$3.01B
Total cash
$854.20M
Growth
How the business has been compounding
Revenue TTM
$3.29B
Revenue 5Y CAGR
11.1%
EPS TTM
2.75
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$215.35M
Free CF TTM
$75.10M
FCF margin
2.3%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
2024-05-14