Sun Country Airlines (SNCY) Earnings Preview: What to Watch for on October 30th

Sun Country Airlines (SNCY) Earnings Preview: What to Watch for on October 30th

Sun Country Airlines is gearing up to release its quarterly earnings on Wednesday, October 30th, 2024, and investors are on the edge of their seats. Analysts are predicting an earnings per share (EPS) of $0.06, but the real focus will be on the company’s guidance for the next quarter and its overall performance in the competitive airline industry.

What Investors Should Keep in Mind

Before the earnings announcement, here are some key factors for investors to consider:

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Guidance Matters:

Guidance, or the company’s outlook for future performance, can be a powerful driver of stock prices. Investors will be closely watching to see if Sun Country Airlines provides upbeat guidance, signaling optimism about its prospects.
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Earnings Track Record:

Sun Country Airlines has a history of exceeding earnings estimates. In the last quarter, the company beat EPS by $0.01, but this was followed by a 5.48% drop in share price the next day. This highlights the volatility that can occur even with positive earnings news.

Looking Back at Past Performance

Here’s a look at Sun Country Airlines’s past performance and how its share price reacted:

| Quarter | EPS Estimate | EPS Actual | Price Change (%) |
|—|—|—|—|
| Q2 2024 | 0.05 | 0.06 | -5.0% |
| Q1 2024 | 0.68 | 0.66 | -8.0% |
| Q4 2023 | 0.05 | 0.12 | 8.0% |
| Q3 2023 | 0.14 | 0.14 | -3.0% |

Market Sentiment and Analyst Expectations

To understand the market’s expectations, it’s crucial to analyze analyst sentiment. Sun Country Airlines has received a total of 2 ratings from analysts, with the consensus rating as Neutral. The average one-year price target is $12.5, suggesting a potential 4.14% downside.

A Closer Look at Industry Peers

To gauge Sun Country Airlines’s performance relative to its competitors, let’s examine analyst ratings and average one-year price targets for three prominent players:

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Spirit Airlines:

Analysts have an Underperform outlook, with an average 1-year price target of $1.88, indicating a potential 85.58% downside.
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Blade Air Mobility:

Analysts are optimistic, with an Outperform outlook and an average 1-year price target of $6.0, suggesting a potential 53.99% upside.
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Allegiant Travel:

Analysts have a Neutral outlook, with an average 1-year price target of $47.0, implying a potential 260.43% upside.

Peer Comparison: A Key Takeaway

Sun Country Airlines falls in the middle of the pack for consensus rating. It ranks at the bottom for revenue growth but leads in gross profit and return on equity. This suggests the company may be focusing on profitability while facing challenges in top-line revenue growth.

Deep Dive into Sun Country Airlines’s Financials

Let’s delve into some key financial metrics:

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Market Capitalization:

Sun Country Airlines’s market capitalization is below industry averages, indicating a smaller size compared to its peers. This may be due to factors like growth potential or operational scale.
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Revenue Trend:

Over the past 3 months (as of June 30th, 2024), Sun Country Airlines experienced a revenue growth decline of approximately -2.57%, reflecting a decrease in top-line earnings.
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Net Margin:

Sun Country Airlines’s net margin lags behind industry averages, suggesting challenges in maintaining strong profitability. With a net margin of 0.71%, the company may face hurdles in effective cost management.
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Return on Equity (ROE):

Sun Country Airlines’s ROE falls below industry averages, indicating challenges in maximizing returns on equity capital. With an ROE of 0.33%, the company may need to improve its financial performance.
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Return on Assets (ROA):

Sun Country Airlines’s ROA lags behind industry averages, suggesting challenges in maximizing returns from its assets. With an ROA of 0.11%, the company may need to improve its asset utilization efficiency.
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Debt Management:

With a below-average debt-to-equity ratio of 1.24, Sun Country Airlines adopts a prudent financial strategy, indicating a balanced approach to debt management.

Final Thoughts: What to Look For

Investors will be looking to Sun Country Airlines to provide a clear picture of its strategies for navigating a competitive market, its plans for growth, and its commitment to maximizing profitability. The company’s earnings release will be a critical event for investors, providing insight into the trajectory of this low-cost airline.