Shares of discount airline, Spirit Airlines (NASDAQ: SAVE), jumped 4% in trading on February 10 following the company’s impressive fourth quarter earnings results.
Highlights from Spirit Airlines’ Q4 earnings include $0.80 per diluted share, marking a 43% increase from the same quarter a year prior and beating analysts’ consensus estimates by $0.02. The company’s total operating revenue was $474.5 million, an increase of 13% increase on a year-over-year basis, driven by an increase in flight volume.
This year marks the eighth year in a row of profitability for Spirit Airlines. In total, the company ended the year with $633 million in cash which it plans to use for its $100 million share buyback plan.
Ben Baldanza, Spirit's chief executive officer, said of its earnings, "We have the right team, resources, and business model to continue to successfully grow our business. I'm pleased to be a part of the Spirit team and am excited about bringing our ultra-low fares to even more people in more places."
In 2014, Spirit Airlines added 24 new routes with seven of them in the fourth quarter. The airline also added seven new airplanes to its fleet in Q4, bringing its total fleet to 65 going into 2015. The company also announced it will have 10 new routes, seven of which will be international starting this year. In total, Spirit Airlines plans to add 26 new routes and 15 new aircrafts by the end of 2015. Many are positive that Spirit Airlines’ long-term plans will help the company maintain double-digit revenue and earnings growth for a long time coming.
Imperial Capital analyst Bob McAdoo weighed in on Spirit Airlines on February 11 following the company’s Q4 earnings, reiterating an Outperform rating on the stock and a price target of $100. The analyst explained, “In our view, Spirit remains one of the few growth stories in the U.S. airline industry, having generated double-digit growth across revenue, EBITDA and EPS each year since 2007. The addition of new aircraft and markets, including 26 new nonstop routes beginning in 2015, should help drive additional passenger growth, we believe.”
Bob McAdoo has rated Spirit Airlines 10 times since January 2013, earning a 90% success rate recommending the stock and an impressive +75.6% average return per recommendation. Overall, McAdoo has a 78% success rate recommending stocks and a +35.2% average return per recommendation.
Similarly on February 11, Barclays analyst David Fintzen maintained an Overweight rating on Spirit Airlines with a $110 price target, naming the stock as one of his top picks. He noted, “Spirit's focus on price-sensitive travelers means that it can reach deeper down the demand curve at industry-leading returns. That allows it to further develop a customer base that remains unappealing to higher-cost competitors.”
David Fintzen has rated Spirit Airlines 16 times since September 2012, earning a 94% success rate recommending the company and a +54.6% average return per recommendation. Overall, the analyst has a 76% success rate recommending stocks and a +31.6% average return per recommendation.
On average, the top analyst consensus for Spirit Airlines on TipRanks is Strong Buy.
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