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LAS VEGAS - Allegiant Travel Company (NASDAQ: ALGT), currently valued at approximately $961 million, has announced a downward revision of its full-year capacity growth forecast, from 17% to 13%, following a softer demand in leisure travel, particularly during non-peak periods. Despite this adjustment, the company reports solid performance for peak March weeks with total revenue per available seat mile (TRASM) nearly matching the previous year’s figures, even amidst considerable expansion. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value calculation, with analysts setting price targets ranging from $73 to $125.
The revised outlook comes as Allegiant disclosed its preliminary passenger traffic results for February 2025, which showed a passenger increase of 2.9% to 1,280,034 from February 2024. Revenue passenger miles (RPMs) also rose by 4.7%, and available seat miles (ASMs) grew by 10.7%. However, the load factor, which measures how efficiently an airline fills seats, saw a decline of 4.5 percentage points to 79.5%. The company’s revenue growth stands at 11% over the last twelve months, with annual revenue reaching $2.5 billion.
Chief Commercial Officer Drew Wells commented on the observed demand softness outside of peak travel times, leading to the expectation that first-quarter TRASM will fall by just over seven percent compared to the prior year. The company plans to adapt its capacity deployment flexibly in response to the demand environment.
In terms of financial performance, Chief Financial Officer Robert Neal provided a positive note, indicating better-than-expected cost outcomes for the quarter. Allegiant anticipates its consolidated earnings per share to be at the lower end of initial guidance, approximately $1.50 per share, with the airline contributing around $1.75 per share.
The airline also reported an estimated average fuel cost of $2.70 per gallon for February 2025.
Allegiant, a Las Vegas-based integrated travel company, has been connecting customers with various destinations since 1999. The airline has focused on providing low average fares and nonstop flights primarily from small-to-medium cities.
The company’s performance metrics and financial results are based on a press release statement and reflect its status as of the date of issuance. Investors and interested parties are encouraged to verify the continued accuracy of this information.
In other recent news, Allegiant Travel Company reported strong financial results for the fourth quarter of 2024, surpassing analyst expectations with an earnings per share (EPS) of $2.10, compared to the forecast of $1.19. The company’s revenue also exceeded projections, reaching $627.7 million against the anticipated $622.34 million. Additionally, Allegiant’s preliminary passenger traffic results for January 2025 showed a 6.5% increase in passengers compared to the previous year. Meanwhile, Raymond James analyst Savanthi Syth raised the price target for Allegiant shares to $125 from $110, maintaining an Outperform rating, despite Allegiant’s first-quarter earnings guidance for 2025 being below pre-release forecasts.
In executive news, Allegiant announced the departure of Chief Operating Officer Keny Wilper after a 23-year tenure, with Tyler Hollingsworth stepping in as interim COO. Hollingsworth has been with Allegiant since 2010 and played a crucial role in integrating the Safety and Security departments. The company is also in the process of searching for a permanent successor for the COO position. Furthermore, Allegiant is focusing on strategic growth, with plans to expand its Allegiant Extra seating to 70% of its fleet by the end of the year. The company also anticipates a 17% capacity growth for 2025, aiming to enhance its operational efficiency and maintain its competitive edge in the airline industry.
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