#5 - Spirit Airlines (NYSE:SAVE)
If you’re interested in a stock that is more “under the radar”, Spirit Airlines (NASDAQ:SAVE) may be a savvy alternative. The argument against SAVE stock is that it tends to be volatile and the company has a debt-to-asset ratio of 35% which is high even for the airline industry. And the ratio has increased by over 30% in the last year. It seems Spirit was aggressively trying to expand its fleet and now is watching the investment sit idle.
On April 9, the company got some more bad news as analysts delivered a highly pessimistic outlook for 2020 earnings. But the stock has largely traded sideways since that announcement which suggests that maybe the company’s stock has reached a bottom. After all, to single out any airline as a threat to miss on earnings in this current environment is unrealistic. It’s going to be a terrible year for every airline. Period.
That’s the bad news. The good news is that Spirit, unlike the major carriers, is very familiar with how to compete with rock-bottom airfare. And customers know what they’re getting with Spirit. That won’t change so there’s less of a chance to disappoint. And, Spirit has virtually no international exposure (the company offers flights to just a handful of Latin American countries). That’s significant because while domestic travel may come back soon, international travel will probably be restricted for some time.
Although not listed initially, it does appear that Spirit will be receiving some of the $25 billion in government stimulus. And with the company reporting positive free cash flow in 2019 (the first time the company had pulled that off in six years), things are looking good.
About Spirit Airlines
Spirit Airlines, Inc provides airline services. The company also offers hotels and rental cars services. It serves 93 destinations in 15 countries in the United States, Latin America, and the Caribbean. As of December 31, 2023, the company operated a fleet of 205 Airbus single-aisle aircraft. The company was formerly known as Clippert Trucking Company and changed its name to Spirit Airlines, Inc in 1992.
Read More - Current Price
- $1.08
- Consensus Rating
- Strong Sell
- Ratings Breakdown
- 0 Buy Ratings, 2 Hold Ratings, 7 Sell Ratings.
- Consensus Price Target
- $2.00 (85.2% Upside)
