HomeMost PopularInvestingJetBlue Stock in a Tailspin: Will It Soar Again or Crash Land...

JetBlue Stock in a Tailspin: Will It Soar Again or Crash Land for Good?

Actionable Trade Ideas

always free

The Rise and Fall of JetBlue Stock

JetBlue Airways stock (NASDAQ: JBLU) has taken a nosedive this year, plummeting 35%. Zooming out, the stock is down a dismal 78% from its late 2019 levels. Factors contributing to this include the company’s P/S ratio dropping 78% to 0.1x trailing revenues, a 16% increase in average shares outstanding, and a 20% rise in JetBlue Airways revenue to $9.7 billion.

JetBlue Stock’s Rocky Performance

JBLU stock has fared disastrously, plunging 75% from $15 in early January 2021 to around $4 presently, while the S&P 500 showed a 20% increase over the same period. Regrettably, JetBlue’s stock underperformance against the market has been consistent, delivering dismal returns of -2% in 2021, -54% in 2022, and -35% in 2023 (YTD). In stark contrast, the S&P 500 recorded returns of 27% in 2021, -19% in 2022, and 19% in 2023 (YTD).

This alarming streak paints a grim picture for the future of JBLU stock. To make matters worse, individual stocks and heavyweights in various sectors, including the aviation industry, have found it increasingly tough to outshine the S&P 500. It’s like watching a once-mighty eagle get shot down by a flock of sparrows.

The Silver Lining for JetBlue Stock

Despite the turbulent times, there’s a glimmer of hope on the horizon for JetBlue. The company’s valuation suggests a potential for growth, with its stock estimated to be undervalued by about 20%.

JetBlue’s revenue sources, primarily from commercial flight operations and ancillary services, have seen some positive signs. The increase in revenues can be attributed to a resurgence in air travel demand, symbolized by a meaningful rise in passenger traffic and ticket yield in recent years. While this resurgence bodes well for JetBlue, it does face headwinds such as lower average ticket prices this year despite an overall capacity expansion.

What the Future Holds for JetBlue Stock

As the company grapples with an uncertain macroeconomic environment marked by soaring oil prices and elevated interest rates, the big question is whether JetBlue will continue to underperform the S&P 500 over the next year or stage a remarkable recovery. The current state of affairs, however, presents an ample opportunity for growth, leaving the doors open for a potential resurgence.

Moreover, with the ongoing turbulence in the airline industry sparked by its stalled acquisition of Spirit Airlines, JetBlue might still manage to reclaim its former glory.

Comparative Performance and Outlook

Comparing JetBlue Airways to its peers and exploring the performance metrics that matter will provide a clearer perspective on its future trajectory. As the company strives to reclaim lost ground, understanding how it measures up against its peers will be vital.

Concluding Thoughts

While it’s too early to predict JetBlue’s fate, the signs of potential growth suggest that the stock might yet spread its wings and soar again, defying the odds stacked against it. Investors and industry observers will be keenly watching to see if JetBlue can reverse its fortunes and take flight once more.

Disclaimer

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Swing Trading Ideas and Market Commentary

Need some new swing ideas? Get free weekly swing ideas and market commentary from Jonathan Bernstein here: Swing Trading.

Explore More

Weekly In-Depth Market Analysis and Actionable Trade Ideas

Get institutional-level analysis and trade ideas to take your trading to the next level, sign up for free and become apart of the community.