SkyWest, Inc. SKYW has commanded the stage over the past year, setting the scene for an encore in the future. If you haven’t yet hitched a ride on its surge, now might be that golden ticket moment.
Beneath this vista, let’s delve into the reasons why holding onto this stock amidst the adversities is a symphony of savvy for investors.
SKYW’s proven dedication to rewarding shareholders through share buybacks has been a compelling overture. Roaring to life in May 2023, SKYW’s board of directors orchestrated a share repurchase program that saw one million shares valued at $45 million swept off the table in the fourth quarter of 2023. In the same year, SkyWest reclaimed 10.6 million shares for $289 million. By the close of Dec 31, 2023, SkyWest had $91 million earmarked under its current share repurchase program. These shareholder-friendly maneuvers not only embolden investor confidence but also orchestrate a melody of prosperity, striking a chord with the company’s bottom line.
A soaring crescendo in SKYW’s shares sees a 196.9% surge in the past year, ascending above the industry’s humble 12.7% growth.
Image Source: Zacks Investment Research
Additionally, SkyWest boasts a remarkable track record of beating earnings projections. Over the past four quarters, the company has outshone the Zacks Consensus Estimate by an astonishing average of 128.02%.
SKYW’s dedication to fleet modernization is a stellar performance. Following the curtains down on the fourth quarter of 2023, SKYW unveiled its acquisition of a 25% stake in Contour Airlines, a Part 135 carrier. This deal includes an asset provisioning agreement where SKYW will supply CRJ airframes, engines, and rotatable parts to Contour. Plotted on the horizon is SKYW’s operation of 258 E175 aircraft by the close of 2026.
But the plot thickens, and as with any good drama, there are whispers of a potential villain. The rise in operating expenses casts shadows on SKYW’s profit margins. The company’s operating expenses in the fourth quarter of 2023 totaled $724 million, a 1% upswing from the year-ago quarter. This upswing is attributed to a surge in employee compensation, embracing higher labor pay scales and augmented maintenance costs. It’s worth noting that this surge was partially offset by reduced aircraft rent expenses stemming from the early lease buyouts of some aircraft in the initial quarter of 2023.
Your Portfolio Playlist & Harmony in Stocks
Skipping merrily along, SkyWest currently wears the Zacks Rank of #3 (Hold).
If you’re considering a symphony of stocks from the Zacks Transportation sector, may we recommend a listen to Air Lease Corporation (AL) and Kirby Corporation KEX. These darlings of the stock world currently carry a Zacks Rank of 2 (Buy). For a full-bodied experience, check out the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the spotlight, Air Lease radiates an impressive history of surpassing earnings forecasts, dance-striding past the Zacks Consensus Estimate in the preceding four quarters with an average surprise of 20.15%.
A symphonic crescendo echoes with the Zacks Consensus Estimate for 2024 earnings witnessing an upward revision of 27.7% over the past 90 days. AL is anticipated to flourish with an expected earnings growth rate of 29.96% for 2024, serenading shareholders with a 31.7% gain in the past year.
KEX enters the stage with a harmonious history of outshining the Zacks Consensus Estimate in the last four quarters, delivering an average surprise of 5.75%.
With an expected earnings growth rate of 32.80% for 2024, KEX dares to captivate, and its shares have gracefully pirouetted to a 41.6% gain in the past year.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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