Investment Thesis
Allegiant Travel is experiencing severe profitability distress with negative net income and margins despite strong 12.1% revenue growth, indicating operational challenges that exceed top-line expansion. Critical liquidity concerns are evident with a current ratio below 1.0x, high leverage at 1.60x debt-to-equity, and dangerously low interest coverage of 0.2x, suggesting the company is struggling to service debt obligations. While free cash flow generation of $75.1M provides temporary relief, the negative ROE and ROA combined with persistent unprofitability raise substantial concerns about capital efficiency and financial sustainability.
ALGT Strengths
- Revenue growth of 12.1% YoY demonstrates market demand and top-line expansion capability
- Free cash flow generation of $75.1M (2.9% FCF margin) provides liquidity cushion despite net losses
- Operating cash flow of $389.8M exceeds capital expenditure needs, supporting operational independence
ALGT Risks
- Negative net margin of -1.7% with net income loss of $44.7M indicates structural profitability problems
- Current ratio of 0.95x and quick ratio of 0.95x signal acute liquidity constraints and working capital stress
- Interest coverage ratio of 0.2x is critically low, suggesting severe debt service distress and refinancing risk
- High leverage at 1.60x debt-to-equity with $1.7B long-term debt creates financial fragility in cyclical aviation industry
- Negative ROE of -4.2% and ROA of -1.1% demonstrate poor capital allocation and value destruction
- EPS of -$2.48 with only marginal improvement from prior period indicates unresolved operational challenges
Key Metrics to Watch
- Operating margin trend - must improve toward positive territory to restore profitability
- Current ratio and cash position - monitor liquidity deterioration and debt refinancing needs
- Interest coverage ratio - critical indicator of debt sustainability; must improve above 1.0x minimum
- Free cash flow - track whether operational cash generation can sustain debt servicing obligations
ALGT Financial Metrics
ALGT Profitability Ratios
ALGT Balance Sheet & Liquidity
ALGT 5-Year Financial Trend
5-Year Trend Summary: Allegiant Travel CO's revenue has grown significantly by 38% over the 5-year period, indicating strong business expansion. The most recent EPS of $6.29 reflects profitable operations.
ALGT Growth Metrics (YoY)
ALGT Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $489.0M | -$24.0M | $-1.38 |
| Q2 2025 | $594.5M | $12.8M | $0.68 |
| Q1 2025 | $579.9M | -$919.0K | $-0.07 |
| Q3 2024 | $489.0M | -$24.0M | $-1.38 |
| Q2 2024 | $594.5M | $12.8M | $0.68 |
| Q1 2024 | $579.9M | -$919.0K | $-0.07 |
| Q3 2023 | $516.3M | -$25.1M | $-1.44 |
| Q2 2023 | $592.6M | -$3.5M | $-0.20 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
ALGT Capital Allocation
ALGT SEC Filings
Access official SEC EDGAR filings for Allegiant Travel CO (CIK: 0001362468)