Quick market observation: Spirit Airlines, Inc. (NYSE: SAVE)

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Stock Share Price Update: Spirit Airlines, Inc. (NYSE: SAVE)

On Friday, Spirit Airlines, Inc (NYSE: SAVE) the stock changed -0.36% to recent value of $41.1. There are 69.55M shares outstanding and 67.93M shares are floated in market SAVE over recent time; they noted that 917892 shares changed at hands contradiction to its average trading volume of 1197.49K. The stock disclosed a move of -0.45% away from 50 day moving average and -2.07% away from 200 day moving average. Moving closer, we can see that shares have been trading -3.98% away off 20-day moving average.

Spirit Airlines, Inc. (SAVE) recently stated fourth quarter and full year 2019 financial results.

Revenue Performance
For the fourth quarter 2019, Spirit’s total operating revenue was $969.8M, a raise of 12.4 percent contrast to the fourth quarter 2018, driven by an 18.6 percent increase in flight volume.  Fourth quarter 2019 revenue includes about $7.2M of out-of-period revenue related to the reclamation of over-remitted Federal Excise Tax.

Total operating revenue per accessible seat mile (“TRASM”) for the fourth quarter 2019 reduced 3.6 percent contrast to the same period last year.  Without the out-of-period revenue, the Company estimates its fourth quarter 2019 TRASM would have been down about 4.3 percent year-over-year.  The decrease in TRASM was driven by lower operating yields, as load factor for the period was up slightly.

On a per passenger flight section (“PFS”) basis, for the fourth quarter 2019 total revenue per PFS reduced 5.5 percent year over year, to $110.71, non-ticket revenue per PFS increased 2.3 percent to $58.033and fare revenue per PFS reduced 12.9 percent to $52.68.

Cost Performance
For the fourth quarter 2019, total GAAP operating expenses increased 16.3 percent year over year to $845.2M.  Adjusted operating expenses for the fourth quarter 2019 increased 16.1 percent year over year to $840.2M4. Primary drivers of the increase in adjusted operating expense contrast to the fourth quarter last year include increased flight volume and higher ground handling rates.

Aircraft fuel expense increased in the fourth quarter 2019 by 6.7 percent year over year, Because of a 14.8 percent increase in fuel gallons consumed, partially offset by a 7.1 percent decrease in fuel rates.

Spirit stated fourth quarter 2019 cost per accessible seat mile (“ASM”), not including operating special items and fuel (“Adjusted CASM ex-fuel”), of 5.67 cents4, up 3.3 percent contrast to the same period last year.  Primary drivers of the increase on a per ASM basis contrast to the same period last year included heavy maintenance amortization, maintenance, material and repairs and other operating expenses.

“Our team did a great job recovering from the operational issues we faced in the summer and finished the year 2019 with strong operational results.  Strong operational performance is key to our continued good cost management and we believe we are well-positioned as we enter 2020.  As we’ve noted before, we have several inflationary pressures we are facing such that we expect our 2020 CASM ex-fuel to increase 1 to 2 percent year over year.  From a timing perspective, we face the toughest hurdle in the first quarter, but we anticipate the headwinds will ease as we progress through the year.  And, while we already have one of the most fuel-efficient fleets in the U.S., with our growing fleet of A320neo aircraft we should see even greater fuel efficiency this year, helping us offset some Adjusted CASM ex-fuel pressure,” stated Scott Haralson, Spirit’s Chief Financial Officer.

Liquidity
Spirit ended the year with unrestricted cash, cash equivalents, and short-term investments of $1.1B.  For the twelve months ended December 31, 2019, Spirit generated $409.2M of operating cash flow.  After investing $294.5M for aircraft purchases and pre-delivery deposits, and receiving $225.9M of proceeds from issuance of long-term debt, Adjusted free cash flow for the twelve months ended December 31, 2019 was $340.6M5.  For the twelve months ended December 31, 2019, net cash used in financing activities was $120.2M.

Analyst mean recommendation for this stock stands at 2.4. A stock rating will usually tell the investor how well a stock’s market value relates to what analysts believe is a fair value for the stock, based on an objective evaluation of the company. Analyst recommendations as reported on FINVIZ are rated on a 1 to 5 scale. 1 is equivalent to a Strong Buy rating, 3 a hold rating, and 5 a Strong Sell rating. The consensus recommendation is the average rating on a stock by the analyst community.

Is SAVE Stock being Risky?

You invest to earn a return on your money, but returns are not the only consideration. Risk and return are connected. Generally, the higher the risk of an investment, the higher the potential return.  Here beta – measures how the stock is doing compared to a given benchmark, such as the S&P TSX Composite Index.  Currently SAVE has beta value of 0.38. A beta of 1.0 tells you that a stock has been going up and down with the overall stock market. A stock with a beta between 0.0 and 1.0 has smaller ups and downs. A beta greater than 1.0 has wider price swings. Stocks with a negative beta are moving opposite to the index. When you invest in a stock, you could lose all of your money – in some cases, more than you invested. Before you buy a stock, understand the risks and decide if they are risks you are comfortable taking.

SAVE’s shares are at 5.87% for the quarter and driving a -31.02% return over the course of the past year and is now at 1.96% since this point in 2019. The average volatility for the week and month was at -7.81% and -3.52% respectively.