Frontier Group Holdings Inc (ULCC, Financial) has experienced a notable fluctuation in its stock price recently. With a current market capitalization of $1.32 billion and a stock price of $5.96, the company has seen a significant 31.12% gain over the past three months. However, the past week has not been as favorable, with a 6.38% loss in stock value. When compared to the GF Value of $18.76, a metric that suggests the stock's intrinsic value, Frontier's current price indicates a possible value trap, urging investors to think twice before making an investment decision.
Introduction to Frontier Group Holdings
Frontier Group Holdings Inc, operating in the transportation industry, is an ultra low-cost carrier known for its 'Low Fares Done Right' philosophy. The company boasts a fleet of 120 Airbus single-aisle aircraft, which includes various models like the A320ceos and A321neos. Frontier's focus on fuel efficiency and cost-effective operations has positioned it as a competitive player in the U.S. airline industry. The company operates as a single business unit, providing passenger air transportation services.
Assessing Frontier's Profitability
Frontier's Profitability Rank stands at 6/10, reflecting a moderate level of profitability. The company's operating margin is 1.33%, which is more competitive than 20.13% of 959 companies in the same industry. Additionally, Frontier's Return on Equity (ROE) is 12.83%, surpassing 64.78% of its peers. The Return on Assets (ROA) at 1.43% and Return on Invested Capital (ROIC) at 0.85% also indicate the company's ability to generate profits relative to its assets and invested capital. Frontier has maintained profitability for 5 out of the past 10 years, which is better than 27.75% of 944 companies.
Growth Trajectory of Frontier Group Holdings
The Growth Rank for Frontier is currently at 3/10, indicating a lower growth trajectory when compared to industry standards. However, the company has shown resilience with a 3-Year Revenue Growth Rate per Share of 9.30%, which is better than 59.39% of 916 companies. The 5-Year Revenue Growth Rate per Share stands at 7.30%, outperforming 65.8% of 845 companies. These figures suggest that while growth is not explosive, Frontier has been steadily expanding its revenue streams over time.
Notable Shareholders in Frontier Group Holdings
Frontier's shareholder base includes several prominent investors. Jim Simons (Trades, Portfolio) leads the pack with 550,400 shares, representing a 0.25% share percentage. PRIMECAP Management (Trades, Portfolio) holds 113,200 shares, accounting for 0.05% of the shares, while Steven Cohen (Trades, Portfolio) has a stake of 19,400 shares, or 0.01%. These holdings reflect the confidence of seasoned investors in Frontier's business model and future prospects.
Competitive Landscape
When compared to its competitors, Frontier Group Holdings stands strong with a market cap of $1.32 billion. Sun Country Airlines Holdings Inc (SNCY, Financial) has a market cap of $773.950 million, while Allegiant Travel Co (ALGT, Financial) is slightly larger at $1.38 billion. Air Transport Services Group Inc (ATSG, Financial) follows with a market cap of $936.665 million. These figures place Frontier in a competitive position within the industry, with a market cap that rivals that of its peers.
Conclusion: Frontier's Market Position and Outlook
In summary, Frontier Group Holdings Inc has seen a dramatic 31.12% increase in stock price over the past three months, despite a recent weekly dip. The company's market position is solid, with a business model focused on cost-efficiency and fuel savings. Frontier's profitability metrics, such as operating margin and ROE, are commendable, and its growth rates, though modest, indicate a steady upward trend. The presence of significant shareholders like Jim Simons (Trades, Portfolio) adds a layer of credibility to the company's stock. Finally, when compared to its competitors, Frontier holds its own in terms of market capitalization, suggesting a robust standing in the transportation industry.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
