For a comprehensive WACC calculation, please access the WACC Calculator.
Controladora Vuela Compania de AviacionB de CV (NYSE:VLRS) WACC % Explanation
Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Controladora Vuela Compania de AviacionB de CV's weighted average cost of capital is 10.83%%. Controladora Vuela Compania de AviacionB de CV's ROIC % is 1.48% (calculated using TTM income statement data).
Controladora Vuela Compania de AviacionB de CV earns returns that do not match up to its cost of capital. It will destroy value as it grows.
Be Aware
1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.
2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.
3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
Related Terms
Controladora Vuela Compania de AviacionB de CV WACC % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Controladora Vuela Compania de AviacionB de CV WACC % Chart
Controladora Vuela Compania de AviacionB de CV Annual Data
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Controladora Vuela Compania de AviacionB de CV WACC % vs Transportation Industry
Controladora Vuela Compania de AviacionB de CV WACC % Calculation
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
WACC
=
E
/
(E + D)
*
Cost of Equity
+
D
/
(E + D)
*
Cost of Debt
*
(1 - Tax Rate)
1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, Controladora Vuela Compania de AviacionB de CV's market capitalization (E) is $1078.491 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year quarterly average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Mar. 2026, Controladora Vuela Compania de AviacionB de CV's latest one-year quarterly average Book Value of Debt (D) is $3833.6438 Mil.
a) weight of equity = E / (E + D) = 1078.491 / (1078.491 + 3833.6438) = 0.2196
b) weight of debt = D / (E + D) = 3833.6438 / (1078.491 + 3833.6438) = 0.7804
2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 9.45%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. Controladora Vuela Compania de AviacionB de CV's beta is 2.1709.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 9.45% + 2.1709 * 6% = 22.4754%
3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year quarterly average debt to get the simplified cost of debt.
As of Mar. 2026, Controladora Vuela Compania de AviacionB de CV's interest expense (positive number) was $306.776 Mil. Its total Book Value of Debt (D) is $3833.6438 Mil.
Cost of Debt = 306.776 / 3833.6438 = 8.0022%.
4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = -7.376 / -131.248 = 5.62%.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Controladora Vuela Compania de AviacionB de CV (VLRS) has a WACC % of 10.83% as of Jun. 26, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Controladora Vuela Compania de AviacionB de CV and its competitors. This is 16% above median its historical median of 9.33. Over the past decade, Controladora Vuela Compania de AviacionB de CV's WACC % has ranged from 7.74 to 12.31. According to the industry distribution chart, Controladora Vuela Compania de AviacionB de CV ranks #679 out of 1033 companies in the Transportation industry, placing it in the top 65.7%.
Is Controladora Vuela Compania de AviacionB de CV's WACC % too high?
Controladora Vuela Compania de AviacionB de CV's current WACC % of 10.83% is 16% above median its 10-year median of 9.33. Over the past 10 years, this metric has ranged from a low of 7.74 to a high of 12.31. The Transportation industry median WACC % is 7.81. Controladora Vuela Compania de AviacionB de CV's value of 10.83% is 38.7% above this industry median. Based on the distribution chart, Controladora Vuela Compania de AviacionB de CV ranks #679 out of 1033 companies in the Transportation industry, which is below the industry midpoint. Overall, Controladora Vuela Compania de AviacionB de CV has a GF Score™ of 80/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Controladora Vuela Compania de AviacionB de CV's WACC % compare to DAL and UAL?
According to the Transportation industry distribution chart, Controladora Vuela Compania de AviacionB de CV ranks #679 out of 1033 companies for WACC %. This places Controladora Vuela Compania de AviacionB de CV in the lower half of its industry. The industry median WACC % is 7.81. Controladora Vuela Compania de AviacionB de CV's value of 10.83% is 38.7% above this benchmark. Historically, Controladora Vuela Compania de AviacionB de CV's own WACC % has ranged from 7.74 to 12.31 over the past decade. While the company's 10-year median is 9.33 vs. the industry median of 7.81, Controladora Vuela Compania de AviacionB de CV has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good WACC % for a Transportation company?
The median WACC % among Transportation companies is 7.81, based on 1,033 companies in the industry. Companies in the top quartile (top 25%) have a WACC % significantly above this median, while those in the bottom quartile fall well below. However, WACC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Controladora Vuela Compania de AviacionB de CV's current WACC % of 10.83% is 38.7% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high WACC % mean?
A high WACC % can signal that a stock is expensive relative to its fundamentals. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Controladora Vuela Compania de AviacionB de CV and its competitors. For the Transportation industry, the median WACC % is 7.81 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Controladora Vuela Compania de AviacionB de CV's current WACC % is 10.83%, which is 16% above median its own 10-year median of 9.33. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Controladora Vuela Compania de AviacionB de CV stock overvalued right now?
Based on GuruFocus' analysis, Controladora Vuela Compania de AviacionB de CV (VLRS) is currently considered Modestly Overvalued. The stock's GF Value™ is $7.66, compared to a current price of $9.39 — trading 22.6% above its estimated fair value. The current WACC % is 10.83%, which is 16% above median its 10-year median of 9.33 and 38.7% above the Transportation industry median of 7.81. Controladora Vuela Compania de AviacionB de CV's overall GF Score™ is 80/100 with 7 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is WACC % calculated?
WACC % is calculated from a company's financial statements. For Controladora Vuela Compania de AviacionB de CV (VLRS), the current WACC % is 10.83% as of Jun. 26, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Controladora Vuela Compania de AviacionB de CV (VLRS) Overvalued in 2026?
Based on GuruFocus' analysis, Controladora Vuela Compania de AviacionB de CV stock appears to be overvalued.
The current stock price of $9.39 is trading 22.6% above its estimated GF Value™ of $7.66.
GuruFocus considers Controladora Vuela Compania de AviacionB de CV to be Modestly Overvalued.
Key valuation signals for VLRS:
WACC %: 10.83% (16% above median its 10-year median of 9.33)
GF Value™: $7.66 vs. price of $9.39 (22.6% above fair value)
Industry Position: 38.7% above the Transportation median (#679 of 1033)
No single metric tells the full story. See the VLRS stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Controladora Vuela Compania de AviacionB de CV Business Description
Controladora Vuela Compania de Aviacion SAB de CV is a low-cost airline flying to Mexico, the United States, Central, and South America. It uses promotional fares to stimulate demand, and the base fares are priced to compete with long-distance bus fares in Mexico. Revenues from the air transportation of passengers are recognized earlier when the service is provided or when the non-refundable ticket expires on the date of the scheduled travel. Non-passenger revenues include revenues generated from other non-passenger services and cargo services. The Company has two geographic areas identified as domestic (Mexico) and international (United States of America, Central America, and South America).
80GF Score
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