Ultra low-cost airline Frontier Group Holdings (NASDAQ: ULCC) will be reporting results this Wednesday before market open. Here’s what you need to know.
Frontier beat analysts’ revenue expectations last quarter, reporting revenues of $1.07 billion, up 16.8% year on year. It was a satisfactory quarter for the company, with EPS guidance for next quarter exceeding analysts’ expectations but a significant miss of analysts’ EBITDA estimates.
Is Frontier a buy or sell going into earnings? Read our full analysis here, it’s free for active Edge members.
This quarter, the market is expecting Frontier’s revenue to grow 31.6% year on year, a reversal from the 4.5% decrease it recorded in the same quarter last year.
Analysts covering the company have generally reconfirmed their estimates over the last 30 days, suggesting they anticipate the business will stay the course heading into earnings. Frontier has missed Wall Street’s revenue estimates multiple times over the last two years.
Looking at Frontier’s peers in the consumer discretionary - travel and vacation providers segment, some have already reported their Q2 results, giving us a hint as to what we can expect. Delta delivered year-on-year revenue growth of 18.7%, beating analysts’ expectations by 3.9%, and Travel + Leisure reported revenues up 4.4%, topping estimates by 1.6%. Delta traded down 3.2% following the results while Travel + Leisure’s stock price was unchanged.
Read our full analysis of Delta’s results here and Travel + Leisure’s results here.
In the last year or so, investors have shifted their focus from one macro dynamic to the next (AI disintermediation and AI investment to geopolitical conflict, interest rates, and the health of the wider economy). While some of the consumer discretionary - travel and vacation providers stocks have shown solid performance in this choppy environment, the group has generally underperformed, with share prices down 2% on average over the last month. Frontier is down 18.7% during the same time and is heading into earnings with an average analyst price target of $6.67 (compared to the current share price of $6.10).
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