NEW YORK (TheStreet) -- Shares of Spirit Airlines Inc. (SAVE - Get Report) jumped 2.28% to $65.46 after Lone Pine Capital disclosed in an SEC filing it owns a 6%, or 4.37 million shares, passive stake in the carrier.
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TheStreet Ratings team rates SPIRIT AIRLINES INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate SPIRIT AIRLINES INC (SAVE) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, impressive record of earnings per share growth and solid stock price performance. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SAVE's revenue growth trails the industry average of 43.2%. Since the same quarter one year prior, revenues rose by 18.2%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- SAVE's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.39, which illustrates the ability to avoid short-term cash problems.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. In comparison to the other companies in the Airlines industry and the overall market, SPIRIT AIRLINES INC's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
- SPIRIT AIRLINES INC has improved earnings per share by 21.4% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, SPIRIT AIRLINES INC increased its bottom line by earning $2.43 versus $1.50 in the prior year. This year, the market expects an improvement in earnings ($2.95 versus $2.43).
- Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 96.63% over the past year, a rise that has exceeded that of the S&P 500 Index. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
- You can view the full analysis from the report here: SAVE Ratings Report