Last Updated: 16 Oct 2024
Executive Summary
Frontier Group Holdings Inc. (ULCC) is a low-fare airline headquartered in Denver, Colorado. The company has a market capitalization of $1.35 billion and trades on the NASDAQ exchange. Frontier has been facing financial challenges in recent quarters, with negative earnings per share (EPS) and EBITDA. However, analysts remain cautiously optimistic about the company's long-term prospects, with a consensus price target of $5.09.
Company Overview
Frontier Group Holdings Inc. operates a fleet of over 100 aircraft and serves over 100 destinations in the United States, Mexico, and the Caribbean. The company has a strong focus on cost control and offers low fares to leisure travelers. Frontier has been expanding its operations in recent years, adding new routes and increasing its fleet size.
Fundamental Analysis
Frontier's financial performance has been mixed in recent quarters. The company reported a net loss of $239 million in the latest quarter, and EPS of -$0.29. Revenue grew by a modest 0.006% year-over-year, to $3.61 billion. Frontier's profit margin is -0.0177, and its operating margin is -0.0534. The company's return on assets and return on equity are also negative.
Frontier's financial leverage is relatively high, with an EV/EBITDA ratio of 154.19. The company's beta is 2.552, indicating that its stock is more volatile than the overall market.
Technical Analysis
Frontier's stock price has been trending lower in recent months. The stock is currently trading at $6.22, below its 50-day moving average of $4.165 and its 200-day moving average of $5.45. The stock's relative strength index (RSI) is 35.62, indicating that it is oversold.
Short Term Outlook
In the short term, Frontier's stock price is likely to remain volatile. The company's financial performance has been weak, and the stock is trading below its moving averages. However, the stock is oversold, and a short-term bounce is possible.
Long Term Outlook
In the long term, Frontier's prospects are more uncertain. The company faces competition from larger airlines and low-cost carriers. However, Frontier has a strong brand and a loyal customer base. If the company can improve its financial performance, it could be a good long-term investment.
Analyst Recommendations
Analysts are divided on Frontier's stock. One analyst has a buy rating, nine have hold ratings, and two have sell ratings. The consensus price target is $5.09, which represents a potential upside of 18.2% from the current price.
