Azul SA (AZUL) AI Stock Analysis

• Market Cap: $176.79M
• Dividend Yield: N/A
• Average Volume (3M): 10.60M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.56
• Revenue Growth: -5.34%
• EPS Growth: -125.18%
• Country: US
• Employees: 15,367
• Sector: Industrials
• Sector Strength: 90
• Industry: Airlines, Airports & Air Services
• EPS (TTM): -0.69
• Shares Outstanding: 298,679,930
• 10 Day Avg. Volume: 6,730,255
• 30 Day Avg. Volume: 10,597,401
• PEG Ratio: >-0.01
• Price to Book (P/B): -0.02
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.20
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $0.50
• Price Target Upside: 11.11% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 4

• Rating: 42 Neutral
• Price Target: $0.50 ▲( 11.11% Upside)

Azul SA's stock score reflects a combination of financial instability due to high leverage and persistent losses, negative technical indicators, and a challenging valuation environment. Despite operational improvements and revenue growth highlighted in the earnings call, significant risks remain, particularly with high debt levels and market conditions impacting equity raises. Investors should approach with caution given the current financial and technical landscape.

Positive Factors

Liquidity Improvement

Liquidity is expected to improve with actions taken to secure additional funding, including a government-guaranteed credit line.

Merger Synergies

Synergies from the revenue side look feasible, as companies’ network would likely improve connectivity and generate higher income from passengers and the cargo businesses.

Revenue and Demand

Revenue and demand are tracking well, with operational, FX, and fuel trends moving in a favorable direction since March.

Negative Factors

Antitrust Approval

Antitrust approval seems challenging.

Cost Challenges

Costs proved disappointing due to the impact of the Brazilian real’s depreciation against the U.S. dollar and a temporary increase in irregular operations.

Equity Dilution

Further dilution is now inevitable and shares cannot reflect the underlying fundamentals until the $200M optional equity raise is completed and the level of dilution is clear.

Azul SA Business Overview & Revenue Model

Company Description

Azul S.A., together with its subsidiaries, provides passenger and cargo transportation services in Brazil. As of December 31, 2021, the company operated 850 daily departures to 125 destinations through a network of 259 non-stop routes with a fleet of 179 aircraft. It is also involved in the loyalty programs, travel packages, investment fund, logistics solutions, and aircraft financing activities. The company was incorporated in 2008 and is headquartered in Barueri, Brazil.

How the Company Makes Money

Azul SA generates revenue primarily through the sale of airline tickets for passenger transportation, which constitutes the majority of its income. The company also makes money through cargo services, transporting goods and packages across its network. Additionally, Azul leverages ancillary services such as in-flight sales, seat selection fees, and loyalty programs to boost its earnings. Partnerships with other airlines and agreements with tourism and travel service providers further contribute to its revenue streams. These partnerships often result in code-sharing agreements and shared marketing initiatives, enhancing Azul's market presence and operational reach.

Azul SA Financial Statement Overview

Summary

Azul SA is on a recovery path with revenue growth and operational improvements, but it still faces challenges with heavy losses, high leverage, and negative equity. Positive cash flow from operations provides some stability, but the overall financial situation is precarious due to reliance on debt and persistent net losses.

Income Statement

Azul SA has shown a significant increase in total revenue from 2020 to TTM 2025, indicating a strong recovery trajectory. However, the company continues to experience heavy losses, with a negative net income throughout the years, resulting in a negative net profit margin. The gross profit margin has improved, showcasing efficiency in cost management, but the EBIT and EBITDA margins reflect the ongoing struggle with operational profitability.

Balance Sheet

The balance sheet reflects high leverage with a debt-to-equity ratio that is uncomfortably high, compounded by negative stockholders' equity. This suggests financial instability and potential risk if market conditions worsen. The negative equity ratio highlights the company's extreme reliance on debt financing, which could pose a threat to financial sustainability.

Cash Flow

Cash flow from operations has been positive, indicating the company can generate cash from its core business activities. However, the high capital expenditures and negative free cash flow growth in recent years point to challenges in maintaining liquidity. The operating cash flow to net income ratio is robust, but the free cash flow to net income ratio remains a concern due to consistent net losses.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
20.24B	19.53B	18.55B	15.95B	9.98B	5.74B
	Gross Profit
6.28B	5.15B	3.13B	3.17B	1.81B	-531.82M
	EBIT
3.16B	3.39B	1.66B	1.43B	54.80M	-1.40B
	EBITDA
5.24B	3.56B	4.62B	5.22B	566.33M	-6.55B
	Net Income Common Stockholders
-7.08B	-9.15B	-2.38B	-722.37M	-4.21B	-10.83B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.60B	1.28B	1.90B	668.35M	3.08B	3.16B
	Total Assets
25.55B	26.27B	20.53B	18.72B	18.53B	15.79B
	Total Debt
35.88B	37.54B	26.34B	23.97B	24.91B	19.88B
	Net Debt
35.42B	36.33B	24.44B	23.30B	21.84B	16.82B
	Total Liabilities
54.00B	56.71B	41.86B	37.73B	36.87B	29.94B
	Stockholders Equity
-28.45B	-30.44B	-21.33B	-19.01B	-18.33B	-14.15B
Cash Flow		Free Cash Flow
1.51B	1.53B	2.64B	1.18B	-934.90M	633.16M
	Operating Cash Flow
2.54B	2.79B	3.44B	2.44B	-310.62M	976.23M
	Investing Cash Flow
-1.37B	-1.57B	-874.48M	-639.85M	-684.89M	-403.83M
	Financing Cash Flow
-2.04B	-1.92B	-1.39B	-4.20B	812.63M	933.51M

Azul SA Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.45
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AZUL, the sentiment is Negative. The current price of 0.45 is below the 20-day moving average (MA) of 0.66, below the 50-day MA of 1.24, and below the 200-day MA of 2.27, indicating a bearish trend. The MACD of -0.22 indicates Negative momentum. The RSI at 20.25 is Positive, neither overbought nor oversold. The STOCH value of 4.18 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AZUL.

Azul SA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LTM	77 Outperform	$11.16B	10.36	138.69%	1.74%	6.41%	49.58%
UAL	75 Outperform	$24.82B	6.93	33.57%	―	5.31%	35.95%
Sector *	64 Neutral	$4.39B	11.81	5.17%	249.38%	3.98%	-12.17%
AAL	62 Neutral	$7.52B	13.16	-21.27%	―	1.92%	36.07%
LUV	59 Neutral	$18.52B	38.59	5.63%	2.27%	3.26%	27.77%
JBLU	44 Neutral	$1.81B	―	-11.30%	―	-3.02%	66.90%
AZUL	42 Neutral	$176.79M	―	17.49%	―	-5.34%	-125.18%