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Azul S.A. Sponsored ADR
(NYSE:AZUL)
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Rating:44Neutral
Price Target:
$3.50
▼(-51.79% Downside)
Action:Reiterated
Date:10/28/26
AZUL scores low primarily due to stressed financial fundamentals (negative equity, high leverage, and negative TTM operating/free cash flow) and very weak technical momentum (well below key moving averages with depressed RSI/Stoch). The earnings call adds some support via improving operations and stated liquidity/deleveraging progress, but valuation remains challenging with an extremely high P/E and only modest dividend yield.
Positive Factors
Revenue and yield strength
Record revenue and stronger RASK indicate healthy demand and effective yield management, while premium growth suggests improving revenue quality. These capabilities can support durable unit economics and help Azul absorb cost pressure when disciplined capacity and pricing remain in place.
Negative Factors
Weak capital structure
Persistent negative equity and substantial debt leave Azul with a thin capital cushion and limited financial flexibility. The structure increases sensitivity to operating setbacks, raises the importance of successful deleveraging, and can constrain investment or growth choices.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue and yield strength
Record revenue and stronger RASK indicate healthy demand and effective yield management, while premium growth suggests improving revenue quality. These capabilities can support durable unit economics and help Azul absorb cost pressure when disciplined capacity and pricing remain in place.
Read all positive factors
Azul S.A. Sponsored ADR (AZUL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$719.62M
Dividend Yield1.06%
Average Volume (3M)242.98K
Price to Earnings (P/E)659.1
Beta (1Y)5.03
Revenue Growth12.03%
EPS Growth46.01%
CountryUS
Employees15,367
SectorGeneral
Sector StrengthN/A
IndustryAirlines, Airports & Air Services
Share Statistics
EPS (TTM)58.98
Shares Outstanding200,414,630
10 Day Avg. Volume185,474
30 Day Avg. Volume242,980
Financial Highlights & Ratios
PEG Ratio-1.17
Price to Book (P/B)-0.51
Price to Sales (P/S)0.68
P/FCF Ratio-10.53
Enterprise Value/Market Cap7.71
Enterprise Value/Revenue0.26
Enterprise Value/Gross Profit0.98
Enterprise Value/Ebitda1.78
Forecast
1Y Price Target
$13.03Price Target Upside79.52% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)0.83
Revenue Forecast (FY)$4.35B
Azul S.A. Sponsored ADR Business Overview & Revenue Model
Company Description
Azul S.A., a Brazilian-based company, primarily offers air transportation services, both domestically within Brazil and across international routes, supported by its various subsidiaries. In addition to core passenger air travel, the company diver...
How the Company Makes Money
Azul primarily makes money by selling air transportation and related services. Its main revenue stream is passenger revenue, generated from ticket sales for scheduled flights; this includes fares across different cabin/products and is influenced b...
Azul S.A. Sponsored ADR Earnings Call Summary
Earnings Call Date:Aug 13, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 12, 2026
Earnings Call Sentiment Positive
The call presents a resilient operating and financial performance amid severe external pressure from sharply higher fuel costs. Highlights include record Q2 revenue, strong RASK growth (+12.7% YoY), positive adjusted EBITDA (BRL 510 million), improved operational reliability (87.7% on-time in July) and material balance-sheet progress (BRL 3.7 billion liquidity; ~BRL 13 billion YoY debt reduction). Lowlights center on large fuel-driven cost inflation (fuel +61.8% YoY; BRL 749 million headwind), higher CASK (+26% YoY), capacity cuts (-10.6% YoY), and nonrecurring restructuring cash outflows (~BRL 794 million) that compressed near-term free cash flow and created short-term uncertainty. Management emphasized disciplined capacity and premium-focused revenue actions that recaptured ~60% of the fuel impact and expect improving EBITDA in H2, while withholding full-year guidance due to fuel volatility. Overall, the company appears operationally stronger and financially more stable than a year ago, though near-term risks from fuel volatility and competitor capacity remain.Positive Updates
Record Quarterly Revenue
Operating revenue of BRL 5.0 billion in Q2 2026 — a second-quarter record, supported by healthy demand, disciplined capacity management and strong high-yield revenue.
Negative Updates
Significant Fuel Cost Pressure
Fuel cost per liter rose ~61.8% year-over-year, creating an estimated BRL 749 million EBITDA headwind versus Q2 2025 and materially increasing CASK.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Quarterly Revenue
Operating revenue of BRL 5.0 billion in Q2 2026 — a second-quarter record, supported by healthy demand, disciplined capacity management and strong high-yield revenue.
Read all positive updates
Company Guidance
Azul declined to provide full‑year 2026 guidance because of fuel price volatility, but reiterated several targets and near‑term expectations: they expect "much higher" EBITDA in H2 (Q2 results: operating revenue BRL 5.0bn, RASK BRL 0.4341 +12.7% YoY, adjusted EBITDA BRL 510m or 10.2% margin, CASK BRL 0.4480 +26% YoY and CASK ex‑fuel +12%), reported a BRL 749m fuel headwind in Q2 of which ~60% (~BRL 448m) was recaptured, delivered near‑breakeven recurring free cash flow while paying BRL 794m of restructuring cash (two‑thirds already paid, remaining one‑third expected in Q3–Q4), ended the quarter with BRL 3.7bn immediate liquidity (16.6% of LTM revenue) and total debt of BRL 21.4bn (leverage using immediate liquidity 2.8x, down 2.3x YoY), said they expect liquidity to be above ~20% of LTM revenue by year‑end, plan to access up to BRL 4.6bn of FGE/FNAC facilities in Q3–Q4, have no material maturities before 2031, and maintain longer‑term Board targets of leverage <1.5x and a 150% market‑cap increase by 2029.Azul S.A. Sponsored ADR Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
18
Very Negative
Cash Flow
27
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 21.75B | 21.64B | 19.53B | 18.55B | 15.95B | 9.98B |
| Gross Profit | 5.67B | 6.16B | 5.15B | 3.13B | 1.68B | 1.81B |
| EBITDA | 3.12B | 5.93B | 5.81B | 4.62B | 5.61B | 566.33M |
| Net Income | 1.62B | 124.86M | -9.15B | -2.38B | -722.37M | -4.21B |
Balance Sheet | ||||||
| Total Assets | 30.74B | 23.63B | 26.27B | 20.53B | 18.72B | 18.53B |
| Cash, Cash Equivalents and Short-Term Investments | 1.27B | 1.02B | 1.28B | 1.90B | 668.35M | 3.08B |
| Total Debt | 21.38B | 35.84B | 37.54B | 26.34B | 23.97B | 24.91B |
| Total Liabilities | 35.88B | 52.65B | 56.71B | 41.86B | 37.73B | 36.87B |
| Stockholders Equity | -5.15B | -29.02B | -30.44B | -21.33B | -19.01B | -18.33B |
Cash Flow | ||||||
| Free Cash Flow | -1.47B | -1.40B | 1.53B | 2.64B | 1.18B | -934.90M |
| Operating Cash Flow | -1.17B | -1.21B | 2.79B | 3.44B | 2.44B | -310.62M |
| Investing Cash Flow | -560.04M | -562.12M | -1.57B | -874.48M | -639.85M | -684.89M |
| Financing Cash Flow | 1.78B | 1.68B | -1.92B | -1.39B | -4.20B | 812.63M |
Azul S.A. Sponsored ADR Risk Analysis
Azul S.A. Sponsored ADR disclosed 65 risk factors in its most recent earnings report. Azul S.A. Sponsored ADR reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 2 New Risks
1.
Changes in the credit ratings issued by credit rating agencies could adversely affect our ability to raise funding, our cost of financing and the market price of our securities. Q4, 2023
2.
We have a significant amount of indebtedness and other financial obligations and insufficient liquidity may have a material adverse effect on our financial condition and business. Q4, 2023
Azul S.A. Sponsored ADR Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $5.34B | 8.53 | 22.40% | 5.19% | 14.80% | -1.39% | |
75 Outperform | $12.59B | 8.12 | 98.01% | 3.49% | 20.16% | 39.18% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% | |
51 Neutral | $2.22B | -6.07 | 42.95% | ― | 9.55% | -83.46% | |
48 Neutral | $702.00M | -3.20 | -151.82% | ― | 18.55% | -248.20% | |
45 Neutral | $1.08B | -1.06 | -58.36% | ― | 9.87% | -104.29% | |
44 Neutral | $719.62M | 659.09 | -0.38% | 1.06% | 12.03% | 46.01% |
* General Sector Average
AZUL
Azul S.A. Sponsored ADR
3.77
-476.62
-99.22%
CPA
Copa Holdings
129.90
12.16
10.33%
JBLU
JetBlue Airways
2.85
-1.23
-30.23%
VLRS
Controladora Vuela Compania de Aviacion SAB de CV
6.10
-0.30
-4.69%
LTM
LATAM Airlines Group SA Sponsored ADR
43.84
>-0.01
-0.02%
AERO
Grupo Aeromexico, S.A.B. de C.V. Unsponsored ADR
15.21
-5.14
-25.26%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.