Controladora Vuela Compania de Aviacion SAB de CV (VLRS) AI Stock Analysis

• Market Cap: $744.39M
• Dividend Yield: N/A
• Average Volume (3M): 619.45K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.00
• Revenue Growth: -6.02%
• EPS Growth: -132.85%
• Country: US
• Employees: 6,901
• Sector: Industrials
• Sector Strength: 72
• Industry: Airlines, Airports & Air Services
• EPS (TTM): 0.05
• Shares Outstanding: 116,597,670
• 10 Day Avg. Volume: 878,442
• 30 Day Avg. Volume: 619,454
• PEG Ratio: <0.01
• Price to Book (P/B): 2.35
• Price to Sales (P/S): 0.27
• P/FCF Ratio: 1.69
• Enterprise Value/Market Cap: 5.23
• Enterprise Value/Revenue: 1.30
• Enterprise Value/Gross Profit: 3.57
• Enterprise Value/Ebitda: 7.32
• 1Y Price Target: $8.83
• Price Target Upside: 33.18% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 49 Neutral
• Price Target: $6.50 ▼(-1.96% Downside)

VLRS's overall stock score is primarily impacted by financial performance challenges, including high leverage and declining profitability. Technical analysis provides a neutral outlook, while valuation is weak due to a negative P/E ratio. The earnings call offers some positive insights but is overshadowed by operational challenges.

Positive Factors

Strong Domestic Load Factor

A high domestic load factor indicates strong demand and effective capacity management, supporting stable revenue generation in core markets.

Resilient Ancillary Revenue

Consistent ancillary revenue growth enhances profitability and provides a buffer against fluctuations in ticket sales, strengthening financial resilience.

Cost Efficiency and Flexibility

Effective cost management supports margin sustainability, allowing the company to remain competitive and adapt to market changes.

Negative Factors

High Leverage

High leverage increases financial risk, potentially limiting the company's ability to invest in growth and weather economic downturns.

Decrease in Operating Revenues

A decline in operating revenues suggests challenges in maintaining sales momentum, which could impact long-term growth prospects.

Challenges with Aircraft Groundings

Aircraft groundings reduce operational capacity, potentially affecting revenue and increasing maintenance costs, impacting long-term operational efficiency.

Controladora Vuela Compania de Aviacion SAB de CV Business Overview & Revenue Model

Company Description

Controladora Vuela Compania de Aviacion SAB de CV (VLRS) is a Mexican airline holding company that operates low-cost carrier services primarily through its subsidiary, Volaris. The company focuses on providing affordable air travel within Mexico and to various international destinations, catering to both leisure and business travelers. With a fleet of modern aircraft, VLRS emphasizes operational efficiency and customer service while maintaining competitive pricing in the aviation sector.

How the Company Makes Money

Controladora Vuela Compania de Aviacion SAB de CV generates revenue primarily through ticket sales for its flights, which are offered at competitive prices to attract a broad customer base. Additional revenue streams include ancillary services such as baggage fees, seat selection fees, and in-flight sales. The company also benefits from partnerships with travel agencies and online travel platforms that help boost ticket sales. Furthermore, VLRS capitalizes on its loyalty programs and promotional deals to enhance customer retention and encourage repeat purchases. Seasonal demand fluctuations and international expansion efforts further contribute to its earnings.

Controladora Vuela Compania de Aviacion SAB de CV Financial Statement Overview

Summary

VLRS faces significant financial challenges with declining revenue growth and profitability issues. The balance sheet shows high leverage and financial risk, while cash flow management is relatively stable but not enough to offset other weaknesses.

Income Statement

The income statement shows mixed results. The company has experienced a significant decline in revenue growth rate in the TTM period, indicating potential challenges in maintaining sales momentum. Gross profit margin is relatively low, and the net profit margin has turned negative, reflecting profitability issues. However, the EBIT and EBITDA margins are positive, suggesting some operational efficiency.

Balance Sheet

The balance sheet reveals high leverage with a debt-to-equity ratio significantly above industry norms, posing financial risk. The return on equity is negative in the TTM period, indicating challenges in generating returns for shareholders. The equity ratio is low, suggesting reliance on debt financing. These factors highlight potential financial instability.

Cash Flow

Cash flow analysis shows a decline in free cash flow growth, but the company maintains a positive operating cash flow to net income ratio, indicating some ability to generate cash from operations. The free cash flow to net income ratio is favorable, suggesting efficient cash management despite profitability challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.99B	3.14B	3.26B	2.85B	2.18B	1.11B
Gross Profit	1.09B	1.11B	505.20M	246.00M	544.61M	12.77M
EBITDA	532.00M	1.07B	722.52M	477.05M	600.99M	143.59M
Net Income	-62.00M	126.00M	7.82M	-30.00M	106.45M	―
Balance Sheet
Total Assets	5.70B	5.70B	5.15B	4.52B	4.01B	3.43B
Cash, Cash Equivalents and Short-Term Investments	794.00M	954.00M	776.48M	704.98M	745.38M	507.82M
Total Debt	3.86B	3.87B	3.54B	2.98B	2.73B	2.49B
Total Liabilities	5.44B	5.34B	4.90B	4.24B	3.69B	3.29B
Stockholders Equity	262.00M	365.00M	242.59M	277.00M	319.16M	140.54M
Cash Flow
Free Cash Flow	651.83M	506.65M	238.69M	260.06M	580.97M	67.30M
Operating Cash Flow	771.72M	1.09B	729.83M	614.00M	775.38M	243.28M
Investing Cash Flow	-176.07M	-472.00M	-462.04M	-131.00M	―	―
Financing Cash Flow	-638.25M	-472.00M	-214.39M	-513.00M	―	―

Controladora Vuela Compania de Aviacion SAB de CV Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6.63
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VLRS, the sentiment is Positive. The current price of 6.63 is below the 20-day moving average (MA) of 6.84, above the 50-day MA of 6.59, and above the 200-day MA of 5.82, indicating a neutral trend. The MACD of 0.01 indicates Positive momentum. The RSI at 47.44 is Neutral, neither overbought nor oversold. The STOCH value of 16.74 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VLRS.

Controladora Vuela Compania de Aviacion SAB de CV Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SNCY	―	$600.88M	10.72	9.99%	―	4.27%	28.47%
Sector *	―	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
LUV	―	$15.56B	46.72	4.22%	2.38%	0.65%	―
ALGT	―	$1.14B	―	-24.02%	―	3.17%	-1689.03%
VLRS	―	$744.39M	―	-21.54%	―	-6.02%	-132.85%
JBLU	―	$1.53B	―	-19.09%	―	-2.49%	47.88%
ULCC	―	$839.61M	―	-6.63%	―	4.60%	49.81%

Controladora Vuela Compania de Aviacion SAB de CV Corporate Events

Volaris Reports Strong Q3 2025 Financial Results with 33.6% EBITDAR Margin

On October 27, 2025, Volaris announced its financial results for the third quarter of 2025, reporting an EBITDAR margin of 33.6%. The company employs a conservative hedging policy to manage financial risks related to fuel price fluctuations, foreign currency, and interest rate variations. These strategies aim to mitigate potential adverse effects on earnings and working capital, ensuring stable operations amidst market uncertainties.

Volaris Unveils 2024 Integrated Annual Report

On October 7, 2025, Volaris released its 2024 Integrated Annual Report titled ‘The Art of Transformation: Folding a Sustainable Future.’ The report, which is available on the company’s Investor Relations webpage, provides insights into Volaris’ strategic focus and operational highlights, although it does not include audited financial information or future performance predictions. This release underscores Volaris’ commitment to transparency and sustainability, potentially impacting its market position and stakeholder engagement.

Volaris Reports September 2025 Traffic Results with 83% Load Factor

On October 7, 2025, Volaris reported its September 2025 traffic results, noting a load factor of 83.4%, a slight decrease from the previous year. The airline experienced a 2.9% increase in available seat miles and a 1.0% rise in revenue passenger miles, despite a decline in international RPMs. Volaris transported 2.4 million passengers in September, with domestic demand remaining stable and international traffic showing resilience. The company is optimistic about market conditions improving by year-end, despite challenges such as delayed aircraft deliveries.

Volaris Reports Strong August 2025 Traffic with 85% Load Factor

On September 3, 2025, Volaris reported its August 2025 traffic results, highlighting a load factor of 84.7%. The airline saw a 4.7% increase in ASM capacity and a 1.9% rise in RPMs, with international RPMs increasing by 6.6% while domestic RPMs slightly declined by 0.9%. The company transported 2.7 million passengers in August. CEO Enrique Beltranena noted that the third quarter is progressing as expected, with positive trends in demand and strategic focus on maximizing revenues through base fares and ancillaries, indicating a strong market position and operational flexibility.

Volaris Reports July 2025 Traffic Results with 85% Load Factor

On August 7, 2025, Volaris reported its traffic results for July 2025, revealing a load factor of 84.9%, a decrease of 5 percentage points compared to the previous year. The airline experienced a 6.0% increase in ASM capacity, with international RPMs rising by 1.0% while domestic RPMs slightly declined. The company transported 2.8 million passengers in July, with a strategic focus on yield and ancillary revenues affecting international load factors. Volaris’ performance aligns with its third-quarter expectations, reflecting a gradual stabilization in the market and a tactical approach to capacity management.