Skywest Inc (NASDAQ: SKYW)

Sector: Industrials Industry: Airlines CIK: 0000793733
Market Cap 4.33 Bn
P/B 1.58
P/E 10.12
P/S 1.07
ROIC (Qtr) 8.72
Div Yield % 0.00
Rev 1y % (Qtr) 8.48
Total Debt (Qtr) 2.47 Bn
Debt/Equity (Qtr) 0.90
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About

SkyWest Inc., a prominent name in the airline industry with the ticker symbol SKYW, operates as a regional airline, offering scheduled passenger services to destinations in the United States, Canada, and Mexico. The company has established a strong presence in the industry through its code-share agreements with major airlines such as United, Delta, American, and Alaska. SkyWest's operations are supported by a fleet of aircraft from Embraer and Bombardier, including the E175, CRJ900, CRJ700, and CRJ200. The company's primary business activities...

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Investment thesis

Bull case

  • Operating cash flow of 940.36M provides strong 50.21x coverage of stock compensation 18.73M, indicating sustainable incentive practices.
  • Strong tangible asset base of 7.39B provides 2.99x coverage of total debt 2.47B, indicating robust asset backing and low credit risk.
  • Short-term investments of 584.24M provide solid 1.25x coverage of other current liabilities 467.53M, indicating strong liquidity.
  • Operating cash flow of 940.36M provides strong 5.58x coverage of inventory 168.55M, indicating efficient inventory management.
  • Tangible assets of 7.39B provide robust 15.80x coverage of other current liabilities 467.53M, indicating strong asset backing.

Bear case

  • Operating cash flow of 940.36M barely covers its investment activities of (651.83M), with a coverage ratio of -1.44, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Short-term investments of 584.24M significantly exceed cash reserves of 122.67M, which is 4.76x, indicating potentially excessive yield-seeking behavior at the expense of liquidity.
  • Free cash flow of 302.59M provides weak coverage of capital expenditures of 637.78M, with a 0.47 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 670.04M show weak coverage of depreciation charges of 364.50M, with a 1.84 ratio indicating high capital intensity and potential reinvestment needs.
  • Free cash flow of 302.59M represents just -1.07x of debt issuance (283.70M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Product and Service Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

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 0.91 0.75
EV to Cash from Ops. EV/CFO 7.19 -1.78
EV to Debt EV to Debt 2.73 1.92
EV to EBIT EV/EBIT 10.09 12.70
EV to EBITDA EV/EBITDA 6.88 -7.83
EV to Free Cash Flow [EV/FCF] EV/FCF 22.33 4.43
EV to Market Cap EV to Market Cap 1.56 2.37
EV to Revenue EV/Rev 1.67 1.05
Price to Book Value [P/B] P/B 1.58 0.89
Price to Earnings [P/E] P/E 10.12 14.33
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 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) 6.42 1.76
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -97.38 -69.47
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -46.05 40.07
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 2.71
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 24.24 -58.97
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 11.82 80.32
EBIT Growth (1y) % EBIT 1y % (Qtr) 22.61 -22.88
EBT Growth (1y) % EBT 1y % (Qtr) 30.88 -112.97
EPS Growth (1y) % EPS 1y % (Qtr) 32.42 -167.26
FCF Growth (1y) % FCF 1y % (Qtr) -18.07 2,772.29
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 8.72 7.74
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.55 0.74
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 0.07 0.24
Current Ratio Curr Ratio (Qtr) 0.65 0.56
Debt to Equity Ratio Debt/Equity (Qtr) 0.90 0.61
Interest Cover Ratio Int Coverage (Qtr) 6.42 1.76
Times Interest Earned Times Interest Earned (Qtr) 6.42 1.76
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 25.50 5.51
EBIT Margin % EBIT Margin % (Qtr) 16.51 -0.22
EBT Margin % EBT Margin % (Qtr) 13.94 -3.82
Gross Margin % Gross Margin % (Qtr) 70.80 41.52
Net Profit Margin % Net Margin % (Qtr) 10.60 -4.40