Ryanair Holdings (NASDAQ: RYAAY) delivered impressive Q1 financial and operating numbers. However, this shouldn’t surprise TipRanks’ users who leverage the website traffic screener. TipRanks’ website traffic screener highlighted that Ryanair was among the top 10 airline companies based on the year-over-year growth in website visits in June 2022.
Per the tool, the web visits to ryanair.com were up 49.11% year-over-year in June 2022. Moreover, traffic more than doubled in the first six months of this year. The spike in website visits indicated that Ryanair could benefit from a rebound in demand, and Q1 results revealed the same.
Ryanair’s Q1 traffic jumped from 8.1 million to 45.5 million year-over-year. Furthermore, it was about 9% higher than the pre-COVID levels. Thanks to the sharp recovery in demand, its top line surged over 600%. While the company delivered profitable growth, its Q1 PAT (profit after tax) remained lower than the pre-COVID period.
Management stated that higher costs and lower fares due to Russia’s invasion of Ukraine impacted its bottom line.
What’s on the Horizon Post Q1
Management is optimistic that the high rate of vaccinations will support the airline and tourism industry. Ryanair targets to grow FY23 traffic to 165 million, which is 11% higher than the pre-COVID levels. Given the pent-up demand and strong bookings, Ryanair’s guidance appears achievable.
It’s worth mentioning that the Q2 average fares are tracking ahead of the pre-COVID levels, which should support its profitability. However, volatile fuel prices, geopolitical and supply chain risks, and the resurgent virus could continue to play spoilsport.
Bottom Line
Ryanair closed 4.6% higher on Monday following the Q1 numbers. Meanwhile, strong demand and higher bookings augur well for growth. It also focuses on reducing its debt and plans to reach a zero net debt position over the next two years.
Given the improving operating environment, RYAAY has a positive signal from hedge funds and retail investors. Based on three Buy recommendations, it sports a Strong Buy rating consensus on TipRanks. Further, the average Ryanair price target of $121 implies 62.94% upside potential. Overall, RYAAY stock has an Outperform Smart Score of 9 out of 10.
