NEW YORK (TheStreet) -- JetBlue (JBLU - Get Report) stock is decreasing by 4.88% to $25.36 in midday trading on Monday, after reports suggested that the company may face more competition, according to Barron's.
The company could lose some of its customers to Spirit Airlines (SAVE - Get Report) , which has increased the routes that overlap with new JetBlue routes, including Cleveland to Boston and Fort Lauderdale, Fla., Barron's Avi Salzman wrote.
"It's too early to draw firm conclusions, but we are seeing competitive capacity from JetBlue's top five competitors double in the fourth quarter at Boston, a market that accounts for about 24% of JetBlue's flying (round-trip basis)," Buckingham Research Group analysts Daniel McKenzie said, Barron's reports.
JetBlue also reported in August a 3% drop in passenger revenue per available seat and a 1.3% decline in load factor, which measures how full the airplanes are, Barron's added.
Additionally, JetBlue announced today it will add a second roundtrip flight from New York's John F. Kennedy International Airport to Cuba's José Martí International Airport, starting December 1.
Separately, TheStreet Ratings team rates JETBLUE AIRWAYS CORP as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
We rate JETBLUE AIRWAYS CORP (JBLU) 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, good cash flow from operations, expanding profit margins, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 7.3%. Since the same quarter one year prior, revenues slightly increased by 8.0%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Net operating cash flow has significantly increased by 65.29% to $362.00 million when compared to the same quarter last year. In addition, JETBLUE AIRWAYS CORP has also vastly surpassed the industry average cash flow growth rate of 12.99%.
- 37.78% is the gross profit margin for JETBLUE AIRWAYS CORP which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 9.42% trails the industry average.
- The debt-to-equity ratio is somewhat low, currently at 0.73, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.48 is very weak and demonstrates a lack of ability to pay short-term obligations.
- 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, JETBLUE AIRWAYS CORP 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: JBLU