Allegiant Air
ALGT
$81.85
+7.12%
Allegiant Travel Company is a leisure travel company that operates a low-cost, low-utilization passenger airline, primarily serving underserved cities in the United States, and also offers bundled travel services and products. As a niche player in the airline industry, Allegiant differentiates itself by focusing on leisure travelers in smaller markets, with a unique business model that includes high ancillary revenue and the development of the Sunseeker Resort. The current investor narrative centers on the company's recovery from recent operational challenges, its strategic investments in the Sunseeker Resort, and the potential for margin expansion as it navigates a volatile demand environment. Recent news highlights include corporate actions and strategic reviews, which may signal a period of transformation and heightened investor scrutiny.…
ALGT
Allegiant Air
$81.85
Related headlines
Investment Opinion: Should I buy ALGT Today?
Based on the analysis, I rate ALGT as a Buy. The consensus analyst recommendation is 'buy' with an average target price of $134.36, implying a 64% upside from the current price of $81.85. The thesis is that the market is undervaluing the company's earnings recovery potential, as evidenced by the low forward P/E of 6.91x and PEG ratio of 0.42.
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ALGT 12-Month Price Forecast
The AI assessment leans bullish due to the compelling valuation and analyst optimism. The low forward P/E and PEG ratio suggest that the market is pricing in a strong earnings recovery, which is supported by the company's strategic investments. However, the high leverage and negative profitability introduce uncertainty, warranting a medium confidence level. The stance would be upgraded to high confidence if the company reports positive net income and the forward P/E remains below 8x, or downgraded to neutral if revenue growth decelerates below 3%.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Allegiant Air's 12-month outlook, with a consensus price target around $134.36 and implied upside of +64.2% versus the current price.
Average Target
$134.36
0 analysts
Implied Upside
+64.2%
vs. current price
Analyst Count
—
covering this stock
Price Range
$105 - $165
Analyst target range
Allegiant is covered by 14 analysts, with a consensus recommendation of 'buy' and a mean recommendation score of 1.79 (where 1 is strong buy and 5 is sell). The average target price is $134.36, implying a substantial upside of +64% from the current price of $81.85. The target price range is wide, from a low of $105 to a high of $165, indicating high uncertainty about the company's future performance. The high target suggests expectations of a strong recovery in earnings and potential multiple expansion, while the low target may reflect concerns about operational challenges or a prolonged downturn. The wide spread in targets highlights the divergent views among analysts, with some being very bullish on the company's long-term prospects, particularly with the Sunseeker Resort, while others remain cautious about near-term headwinds.
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Bulls vs Bears: ALGT Investment Factors
Allegiant presents a mixed picture: strong analyst optimism and a low valuation on forward earnings suggest upside potential, but high leverage, negative profitability, and recent price weakness introduce significant risks. The bull case is supported by the potential for earnings recovery and strategic investments, while the bear case is grounded in financial fragility and market volatility. Currently, the evidence slightly favors the bull case due to the substantial analyst upside and low forward P/E, but the key tension is whether the company can achieve the expected earnings recovery without further financial strain. The resolution of this tension, particularly around the Sunseeker Resort's performance and margin improvement, will be critical.
Bullish
- Significant analyst upside: The average analyst target price is $134.36, implying a 64% upside from the current price of $81.85. With a consensus recommendation of 'buy' and a mean score of 1.79, analysts are broadly optimistic about the company's recovery.
- Undervalued on forward earnings: The forward P/E ratio is 6.91x, which is low for the airline industry, suggesting the market expects a strong earnings recovery. The PEG ratio of 0.42 indicates that the stock is undervalued relative to its expected growth.
- Strong 1-year price performance: The stock has gained 46.42% over the past year, significantly outperforming the S&P 500's 20.48% gain. This demonstrates the market's confidence in the company's long-term strategy, including the Sunseeker Resort.
- Positive cash flow generation: The price-to-cash-flow ratio of 3.95 indicates that the company generates positive cash flow, which is crucial for funding operations and capital expenditures. This provides a cushion despite the negative net income.
Bearish
- High leverage and liquidity risk: The debt-to-equity ratio of 1.77 indicates significant leverage, and the current ratio of 0.95 suggests potential liquidity concerns. This financial strain could limit flexibility in a downturn.
- Negative profitability: The company is currently unprofitable with an EPS of -$0.03 and a net margin of -1.71%. While the loss is narrow, sustained profitability is uncertain, especially with high fixed costs.
- High volatility and drawdown risk: The stock has a beta of 1.527, indicating high sensitivity to market movements. The max drawdown of -39.13% over the past year highlights the risk of significant losses.
- Recent price weakness: The stock has declined 23.95% over the past six months and 16.72% in the last month, underperforming the S&P 500. This suggests near-term headwinds or profit-taking.
ALGT Technical Analysis
Allegiant's stock has exhibited a volatile but overall upward trajectory over the past year, with a 1-year price change of +46.42%, significantly outperforming the S&P 500's +20.48% gain. The current price of $81.85 sits at approximately 66% of its 52-week range (between $56.64 low and $123.63 high), indicating that the stock is trading in the lower-middle portion of its range, suggesting a potential value opportunity but also reflecting recent weakness. The 6-month price change of -23.95% and a max drawdown of -39.13% highlight the stock's high volatility and the significant pullback from its highs, which may concern momentum investors.
Beta
1.53
1.53x market volatility
Max Drawdown
-39.1%
Largest decline past year
52-Week Range
$57-$124
Price range past year
Annual Return
+46.4%
Cumulative gain past year
| Period | ALGT Return | S&P 500 |
|---|---|---|
| 1m | -16.7% | +3.6% |
| 3m | +1.9% | +2.7% |
| 6m | -23.9% | +11.4% |
| 1y | +46.4% | +18.7% |
| ytd | -7.0% | +12.3% |
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ALGT Fundamental Analysis
Allegiant's revenue trajectory has been mixed, with the most recent quarterly revenue data not available, but the company's estimated revenue for the next fiscal year is $4.71 billion, implying a growth rate of approximately 5% from the prior year. The company's gross margin stands at 15.37%, which is relatively low for the airline industry, reflecting high operating costs, but its operating margin of 6.71% indicates some efficiency. Net income is negative, with an EPS of -$0.03, and a net margin of -1.71%, showing that the company is currently unprofitable, though the loss is narrow and may be improving. The balance sheet shows a debt-to-equity ratio of 1.77, indicating significant leverage, and a current ratio of 0.95, suggesting potential liquidity concerns. However, the company generates positive cash flow, as evidenced by a price-to-cash-flow ratio of 3.95, which helps fund its operations and capital expenditures.
Quarterly Revenue
N/A
N/A
Revenue YoY Growth
N/A
YoY Comparison
Gross Margin
N/A
Latest Quarter
Free Cash Flow
N/A
Last 12 Months
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Valuation Analysis: Is ALGT Overvalued?
Given that Allegiant's net income is negative, the price-to-sales (PS) ratio is the most appropriate valuation metric, currently at 0.59x, which is relatively low compared to the industry average of around 0.8x, indicating a potential discount. The forward PE ratio of 6.91x suggests that the market expects a significant earnings recovery, as the trailing PE is negative. The EV-to-EBITDA ratio of 9.88x is in line with industry norms, and the price-to-book ratio of 1.46x is reasonable. Compared to the sector, Allegiant trades at a discount on PS and forward PE, which may be justified by its lower margins and higher leverage, but the low PEG ratio of 0.42 suggests that the stock is undervalued relative to its expected growth.
PE
-34.4x
Latest Quarter
vs. Historical
N/A
5-Year PE Range 17x~59x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
9.9x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: Allegiant's balance sheet shows significant leverage with a debt-to-equity ratio of 1.77, which amplifies financial risk in a downturn. The current ratio of 0.95 indicates that current liabilities exceed current assets, potentially leading to liquidity constraints. The company is currently unprofitable with a net margin of -1.71%, and while the loss is narrow, it may persist if operational efficiencies are not achieved. Revenue concentration in the airline segment, which generates the maximum revenue, exposes the company to cyclical demand fluctuations and fuel price volatility. The low gross margin of 15.37% suggests high operating costs, which could pressure margins if revenue growth stalls.
