TD Cowen has revised its price target for Volaris (VLRS, Financial), reducing it from $10 to $6. Despite the adjustment, the analyst Tom Fitzgerald maintains a Buy rating on the airline's shares. This revision comes as the firm updates its forecasts in response to the finalized March traffic data, with an anticipation of the company's first-quarter 2025 earnings report.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 11 analysts, the average target price for Controladora Vuela Compania de Aviacion SAB de CV (VLRS, Financial) is $10.25 with a high estimate of $13.00 and a low estimate of $6.00. The average target implies an upside of 118.63% from the current price of $4.69. More detailed estimate data can be found on the Controladora Vuela Compania de Aviacion SAB de CV (VLRS) Forecast page.
Based on the consensus recommendation from 13 brokerage firms, Controladora Vuela Compania de Aviacion SAB de CV's (VLRS, Financial) average brokerage recommendation is currently 1.8, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Controladora Vuela Compania de Aviacion SAB de CV (VLRS, Financial) in one year is $10.04, suggesting a upside of 114.07% from the current price of $4.69. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Controladora Vuela Compania de Aviacion SAB de CV (VLRS) Summary page.
VLRS Key Business Developments
Release Date: February 24, 2025
- Total Revenue: $3.1 billion for 2024, nearly the same level as 2023.
- Net Profit: $126 million for the full year 2024.
- EBITDA Margin: 36% for the full year 2024.
- Operating Cash Flow: Over $300 million generated in 2024.
- Liquidity Position: $954 million at the end of 2024.
- ASM (Available Seat Miles): 13% decrease year-over-year in 2024.
- Passenger Count: 29.5 million passengers carried in 2024.
- Ancillary Revenue: Accounted for more than 50% of total revenues in 2024.
- Net Debt to EBITDA Ratio: Reduced to 2.6 times by the end of 2024.
- Fuel Cost: Average economic fuel cost dropped 20% to $2.51 per gallon in Q4 2024.
- Fleet Size: 142 aircraft at the end of 2024, up from 129 a year ago.
- Load Factor: 87.3% for Q4 2024.
- Non-Fare Revenue: 52% of top line in 2024.
- Fourth Quarter Revenue: $835 million, a 7% decline year-over-year.
- Fourth Quarter Net Income: $46 million profit.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Controladora Vuela Compania de Aviacion SAB de CV (VLRS, Financial) achieved a full year EBA margin of 36% in 2024, demonstrating strong financial performance despite challenges.
- The company maintained a stable revenue stream with $3.1 billion in total revenue, nearly matching 2023 levels, despite a 13% reduction in available seat miles (ASMs).
- Ancillary revenues accounted for more than 50% of total revenues, reflecting successful diversification and integration of ancillary programs.
- Controladora Vuela Compania de Aviacion SAB de CV (VLRS) achieved a net promoter score of 37.4%, significantly outperforming low-cost carriers in the United States.
- The company was recognized in the Dow Jones best-in-class indexes for the third consecutive year, highlighting its commitment to sustainability and operational excellence.
Negative Points
- The company faced significant challenges due to GTF engine inspections and aircraft groundings, affecting more than half of its fleet engines.
- There was a 13% system-wide capacity decrease in 2024, with domestic capacity declining by 22%.
- The company anticipates ongoing revisions to affect a significant portion of its fleet in 2025, 2026, and 2027, potentially impacting operations.
- Controladora Vuela Compania de Aviacion SAB de CV (VLRS) experienced a 20% depreciation of the Mexican peso against the US dollar, impacting topline results.
- The company expects a one-time cost of approximately $100 million in 2025 due to redelivery accruals and related maintenance.
