ALGT

Allegiant's core airline is visibly healing. Operating income swung to $37.2M (+115.5% YoY), net loss narrowed from -$240M to -$44.7M (+81.4%), and operating cash flow grew to $390M (+15.2%). The MD&A backs this up operationally: record airline-only revenue of $2.5B, airline-only CASM ex-fuel down 6.1% on 12.6% capacity growth, 99.9% controllable completion, and $139.6M of co-brand card remuneration (+3.6%). Selling Sunseeker Resort in September 2025 removes a non-core cash drain and refocuses the company on its low-cost leisure model. At a 0.9x P/S and $2.11B market cap, the stock is not demanding much for this recovery.

But the quality of the business still does not justify a buy. Despite positive operating income, the company posted its second straight annual net loss (EPS -$2.48), ROE is -4.2%, and net margin is -1.9%. The balance sheet carries strain: liabilities/equity of 3.0x, ~$1.8B of total debt ($1.68B long-term + $118M current), and cash that fell 39.6% to just $173M against $1.02B of current liabilities. Strong OCF is the offset, but a thin cash cushion in a fuel-exposed, unhedged airline (management explicitly does not hedge) leaves little room for a demand or fuel shock — and the MD&A flags softened leisure demand and macro/tariff uncertainty pressuring fares and load factors.