Allegiant Travel Company (NASDAQ:ALGT) shares fell 2.9% to US$168 in the week since its latest annual results. Allegiant Travel reported in line with analyst predictions, delivering revenues of US$1.8b and statutory earnings per share of US$14.26, suggesting the business is executing well and in line with its plan. Following the result, analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
After the latest results, the eight analysts covering Allegiant Travel are now predicting revenues of US$2.04b in 2020. If met, this would reflect a notable 11% improvement in sales compared to the last 12 months. Statutory earnings per share are expected to jump 21% to US$17.27. In the lead-up to this report, analysts had been modelling revenues of US$2.03b and earnings per share (EPS) of US$17.07 in 2020. So it's pretty clear that, although analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.
There were no changes to revenue or earnings estimates or the price target of US$198, suggesting that the company has met expectations in its recent result. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Allegiant Travel at US$228 per share, while the most bearish prices it at US$180. Still, with such a tight range of estimates, it suggests analysts have a pretty good idea of what they think the company is worth.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We can infer from the latest estimates that analysts are expecting a continuation of Allegiant Travel's historical trends, as next year's forecast 11% revenue growth is roughly in line with 9.5% annual revenue growth over the past five years. Compare this with the wider market, which analyst estimates (in aggregate) suggest will see revenues grow 4.9% next year. So although Allegiant Travel is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider market.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Allegiant Travel analysts - going out to 2023, and you can see them free on our platform here.
You can also view our analysis of Allegiant Travel's balance sheet, and whether we think Allegiant Travel is carrying too much debt, for free on our platform here.
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