Allegiant Travel CO (NASDAQ: ALGT)

Sector: Industrials Industry: Airlines CIK: 0001362468
Market Cap 2.04 Bn
P/B 2.01
P/E -6.95
P/S 0.79
ROIC (Qtr) -7.88
Div Yield % 0.00
Rev 1y % (Qtr) -0.05
Total Debt (Qtr) 2.13 Bn
Debt/Equity (Qtr) 2.09
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About

Allegiant Travel Company, also known as Allegiant Air, operates in the travel and leisure industry, with its stock symbol being ALGT. The company's main business activities revolve around providing travel and leisure services and products to residents of under-served cities in the United States. Allegiant operates a low-cost, low-fare airline model, offering scheduled air transportation services, as well as ancillary air-related products and services, such as baggage fees, advance seat assignments, and travel protection products. Additionally, Allegiant...

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Investment thesis

Bull case

  • Operating cash flow of 361.98M provides strong 16.04x coverage of stock compensation 22.57M, indicating sustainable incentive practices.
  • Strong operating cash flow of 361.98M provides 3.69x coverage of SG&A expenses 98.05M, showing efficient operational cost management.
  • Operating cash flow of 361.98M provides strong 10.70x coverage of inventory 33.84M, indicating efficient inventory management.
  • Tangible assets of 4.39B provide robust 5.47x coverage of other current liabilities 803.07M, indicating strong asset backing.
  • Cash reserves of 344.83M provide solid 0.88x coverage of other non-current liabilities 392.66M, indicating strong liquidity.

Bear case

  • Operating cash flow of 361.98M barely covers its investment activities of (163.41M), with a coverage ratio of -2.22, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating earnings of (228.15M) show weak coverage of depreciation charges of 255.91M, with a -0.89 ratio indicating high capital intensity and potential reinvestment needs.
  • Operating cash flow of 361.98M provides minimal -4.13x coverage of tax expenses of (87.61M), suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Free cash flow of 145.60M represents just -1.02x of debt issuance (143.28M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • High depreciation of 255.91M relative to operating cash flow of 361.98M, which is 0.71x suggests significant maintenance capital requirements affecting free cash flow.

Peer comparison

Companies in the Airlines
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 DAL Delta Air Lines, Inc. 45.93 Bn 9.18 0.72 20.27 Bn
2 UAL United Airlines Holdings, Inc. 37.05 Bn 11.05 0.63 31.04 Bn
3 LUV Southwest Airlines Co 29.18 Bn 66.17 1.04 5.98 Bn
4 AAL American Airlines Group Inc. 9.42 Bn 15.65 0.17 36.06 Bn
5 ALK Alaska Air Group, Inc. 6.72 Bn 67.15 0.47 6.89 Bn
6 SKYW Skywest Inc 4.33 Bn 10.12 1.07 2.47 Bn
7 AERO Grupo Aeromexico, S.A.B. de C.V. 2.64 Bn 7.49 0.49 4.06 Bn
8 JBLU Jetblue Airways Corp 2.20 Bn -3.66 0.24 9.42 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.87 0.75
EV to Cash from Ops. EV/CFO 10.61 -1.78
EV to Debt EV to Debt 1.81 1.92
EV to EBIT EV/EBIT -16.84 12.70
EV to EBITDA EV/EBITDA -101.80 -7.83
EV to Free Cash Flow [EV/FCF] EV/FCF 26.39 4.43
EV to Market Cap EV to Market Cap 1.89 2.37
EV to Revenue EV/Rev 1.49 1.05
Price to Book Value [P/B] P/B 2.01 0.89
Price to Earnings [P/E] P/E -6.95 14.33
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 292,868.00 22,529.03
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 7.43
Dividend per Basic Share Div per Share (Qtr) 0.00 0.11
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 -2.56
Interest Coverage Int. cover (Qtr) -1.50 1.76
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 29.78 -69.47
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 18.54 40.07
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 2.71
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -247.72 -58.97
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -113.18 80.32
EBIT Growth (1y) % EBIT 1y % (Qtr) -274.56 -22.88
EBT Growth (1y) % EBT 1y % (Qtr) -1,232.80 -112.97
EPS Growth (1y) % EPS 1y % (Qtr) -1,000.67 -167.26
FCF Growth (1y) % FCF 1y % (Qtr) 34,358.35 2,772.29
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 5.82 7.74
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.59 0.74
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 0.30 0.24
Current Ratio Curr Ratio (Qtr) 0.98 0.56
Debt to Equity Ratio Debt/Equity (Qtr) 2.09 0.61
Interest Cover Ratio Int Coverage (Qtr) -1.50 1.76
Times Interest Earned Times Interest Earned (Qtr) -1.50 1.76
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 1.10 5.51
EBIT Margin % EBIT Margin % (Qtr) -8.85 -0.22
EBT Margin % EBT Margin % (Qtr) -14.76 -3.82
Gross Margin % Gross Margin % (Qtr) 25.10 41.52
Net Profit Margin % Net Margin % (Qtr) -11.40 -4.40