On Thursday, shares are falling 2.08% to $61.12.
"We think airlines have individually acted very rationally, but within an industry structure that drove behavior that was collectively detrimental," analysts said.
However, referring to the airline industry as a whole, analysts believe the industry could be solidly profitable in a recession for the first time in history, which could be helped in part by substantially lower interest expense.
The Florida-based company provides low-fare airline services.
Separately, 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 revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, good cash flow from operations and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SAVE's revenue growth has slightly outpaced the industry average of 3.3%. Since the same quarter one year prior, revenues rose by 12.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.32, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, SAVE has a quick ratio of 1.58, which demonstrates the ability of the company to cover short-term liquidity needs.
- SPIRIT AIRLINES INC reported significant earnings per share improvement 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 $3.06 versus $2.43 in the prior year. This year, the market expects an improvement in earnings ($4.91 versus $3.06).
- Net operating cash flow has significantly increased by 85.16% to $167.84 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 74.79%.
- 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. Compared to other companies in the Airlines industry and the overall market on the basis of return on equity, SPIRIT AIRLINES INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full analysis from the report here: SAVE Ratings Report