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Assessing Allegiant Travel’s (ALGT) Valuation After Strong October Traffic and Load Factor Gains

Simply Wall St · 2d ago

Allegiant Travel (ALGT) just posted strong October traffic numbers, with passenger volumes, available seat miles, and load factor all climbing versus last year. This gives investors fresh data on how demand is shaping the stock’s recent rebound.

See our latest analysis for Allegiant Travel.

The upbeat October traffic update seems to be feeding into a solid rebound, with Allegiant’s 90 day share price return of 28.06% standing out, even though the year to date share price return remains negative. At the same time, the 1 year total shareholder return of 3.51% hints that long term confidence is stabilising rather than surging.

If Allegiant’s momentum has you looking beyond a single airline, this could be a good moment to explore aerospace and defense stocks for other transportation and travel exposed names showing interesting risk and reward profiles.

With traffic surging and the share price already up strongly in recent months, the real question now is whether Allegiant is still flying below the market’s radar or if investors have already priced in the next leg of growth.

Most Popular Narrative: 18.8% Overvalued

With Allegiant Travel last closing at $82.64 against a narrative fair value near $69.58, the story centers on whether future profits can catch up to price.

Analysts are assuming Allegiant Travel's revenue will grow by 6.0% annually over the next 3 years.

Analysts assume that profit margins will increase from -11.1% today to 8.7% in 3 years time.

Read the complete narrative.

Want to see how a loss making airline gets mapped to healthy profits and a low future earnings multiple, and why that still signals upside and discipline, not hype, in this valuation roadmap?

Result: Fair Value of $69.58 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent softness in leisure demand, along with higher labor and fleet transition costs, could quickly erode margins and challenge the upbeat earnings recovery path.

Find out about the key risks to this Allegiant Travel narrative.

Build Your Own Allegiant Travel Narrative

If you are not fully convinced by this view, or would rather dig into the numbers yourself, you can build a custom narrative in just a few minutes, Do it your way

A great starting point for your Allegiant Travel research is our analysis highlighting 1 key reward and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.