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Copa Holdings (CPA)
NYSE:CPA
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Copa Holdings
(NYSE:CPA)
Rating:82Outperform
Price Target:
$119.00
▲(9.51%Upside)
Positive Factors
Operational efficiency
Total capacity rose by 5.2%, resulting in a higher load factor, which suggests improved efficiency and potential profitability.
Revenue and growth
Copa's total traffic increased 5.5% compared to the previous year, indicating positive growth for the company.
Negative Factors
Market valuation
Copa is heavily discounted compared to historical multiple levels despite delivering the highest EBIT margin since its 2005 IPO and maintaining a healthy balance sheet.
Yield performance
Copa has experienced declines in yields for the past 6 quarters.
Copa Holdings (CPA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$4.47B
Dividend Yield6.05%
Average Volume (3M)300.75K
Price to Earnings (P/E)7.4
Beta (1Y)0.68
Revenue Growth-1.06%
EPS Growth5.86%
CountryUS
Employees7,909
SectorGeneral
Sector StrengthN/A
IndustryAirlines, Airports & Air Services
Share Statistics
EPS (TTM)4.28
Shares Outstanding30,234,830
10 Day Avg. Volume372,966
30 Day Avg. Volume300,746
Financial Highlights & Ratios
PEG Ratio11.28
Price to Book (P/B)1.71
Price to Sales (P/S)0.00
P/FCF Ratio4.35
Enterprise Value/Market Cap1.34
Enterprise Value/Revenue0.43
Enterprise Value/Gross Profit4.71
Enterprise Value/Ebitda1.48
Forecast
1Y Price Target
$150.80Price Target Upside38.77% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Copa Holdings Business Overview & Revenue Model
Company DescriptionCopa Holdings, S.A., through its subsidiaries, provides airline passenger and cargo services. The company offers approximately 204 daily scheduled flights to 69 destinations in 29 countries in North, Central, and South America, as well as the Caribbean from its Panama City hub. As of December 31, 2021, it operated a fleet of 91 aircraft comprising 77 Boeing 737-Next Generation aircraft and 14 Boeing 737 MAX 9 aircraft. Copa Holdings, S.A. was founded in 1947 and is based in Panama City, Panama.
How the Company Makes MoneyCopa Holdings generates revenue primarily through the sale of airline tickets for passenger travel, which is its largest revenue stream. The company also earns significant income from cargo transportation services and various ancillary services, including baggage fees, seat selection, and onboard sales. Strategic partnerships, such as codeshare agreements with other airlines, expand Copa's network and enhance its service offerings, contributing to its earnings. Additionally, the company's hub-and-spoke model centered in Panama City allows for high connectivity and operational efficiency, further bolstering revenue generation.
Copa Holdings Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 12.45%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Positive
Copa Holdings reported a strong financial performance with a solid operating margin, increased capacity, and effective cost management. However, challenges such as decreased unit revenues and competitive pressures in specific markets were noted. The overall sentiment leans towards positive due to the company's robust financial position and strategic initiatives.Q1-2025 Updates
Positive Updates
Strong Operating Margin
Copa Holdings reported a 23.8% operating margin in Q1 2025, showing resilience despite a lower year-over-year passenger yield environment.
Capacity and Passenger Traffic Increase
Capacity increased by 9.5% year-over-year, and passenger traffic grew by 10.1% compared to Q1 2024, leading to a load factor increase of 0.4 percentage points to 86.4%.
Cost Management Success
Unit costs excluding fuel decreased by 4.3%, driven by lower sales and distribution expenses and reductions in passenger servicing costs.
On-Time Performance and Network Expansion
Copa Airlines achieved a 90.8% on-time performance and announced new services to San Diego, Salta, and Tucuman, enhancing its network.
Strong Financial Position
Copa Holdings ended the quarter with over $1.3 billion in cash and short- and long-term investments, representing 39% of the company's last 12-month revenues.
Dividend Payment
The company announced a second dividend payment of $1.61 per share, reflecting its commitment to return value to shareholders.
Negative Updates
Decrease in Unit Revenues
Unit revenues (RASM) decreased by 8.1% due to a 9.1% decrease in passenger yields, influenced by additional industry capacity and a weaker currency environment in Latin America.
Challenges in Specific Markets
Weakness in yields was observed in Brazil due to the currency situation, and competitive capacity pressures were noted in Mexico and Central America.
Company Guidance
During Copa Holdings' Q1 2025 earnings call, the company provided several key metrics and guidance highlights. The operating margin for the first quarter was reported at 23.8%, reflecting a robust start to the year despite a challenging environment with a 9.1% decline in passenger yields. Capacity increased by 9.5% year-over-year, while passenger traffic grew by 10.1%, leading to a load factor of 86.4%, a 0.4 percentage point improvement from the previous year. Unit revenues (RASM) were noted at $11.05, representing an 8.1% decrease compared to Q1 2024, primarily due to increased industry capacity and weaker regional currencies. However, unit costs excluding fuel (CASMx) decreased by 4.3% to $5.08. On-time performance was strong at 90.8%, with a completion factor of 99.9%. For the full year, Copa revised its operating margin guidance upward to a range of 21% to 23%, driven by expectations of lower fuel costs and steady passenger demand. The company plans to grow capacity by 7% to 8% year-over-year, with assumptions including a load factor of approximately 86.5%, unit revenues of $0.112, and an all-in fuel price of $2.40 per gallon.Copa Holdings Financial Statement Overview
Summary
Copa Holdings demonstrates solid financial health with strong profitability, stable leverage, and robust cash flow. The income statement shows a consistent gross profit margin and significant net profit improvements. The balance sheet reveals prudent financial leverage with a solid equity base. Cash flow management is excellent, indicating effective capital use and cash generation.Income Statement
Copa Holdings shows strong profitability with a consistent Gross Profit Margin of around 37% in TTM, indicating efficient cost management. The Net Profit Margin has improved significantly over the years, reaching about 17.7% in TTM, reflecting effective operational strategies. Revenue growth is stable, with minor fluctuations, and EBIT and EBITDA margins are healthy at 21.8% and 27.5% respectively, demonstrating robust operational performance.85
Very Positive
Balance Sheet
The company maintains a solid financial position, evidenced by a debt-to-equity ratio of 0.78 in TTM, indicating prudent financial leverage. The Return on Equity is impressive at 24.5%, showcasing strong profitability relative to shareholder equity. The equity ratio stands at 43.2%, reflecting a strong equity base. Overall, the balance sheet is stable with a healthy mix of debt and equity financing.80
Positive
Cash Flow
Copa Holdings exhibits strong cash flow management, with a significant Operating Cash Flow to Net Income Ratio of 1.6, suggesting excellent cash conversion efficiency. The Free Cash Flow to Net Income Ratio is also strong at 1.6, indicating effective use of capital. Free Cash Flow has grown substantially, reflecting improved cash generation capabilities.78
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 3.45B | 3.45B | 3.46B | 2.97B | 1.51B | 801.00M | Gross Profit |
| 1.28B | 1.23B | 1.16B | 1.09B | 550.06M | -229.00M | EBIT |
| 751.23M | 753.39M | 806.12M | 200.78M | -86.73M | -460.93M | EBITDA |
| 948.62M | 1.12B | 1.08B | 741.68M | 370.51M | -298.40M | Net Income Common Stockholders |
| 609.23M | 608.53M | 514.10M | 348.05M | 43.84M | -598.61M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 916.35M | 1.20B | 915.18M | 934.75M | 1.02B | 889.88M | Total Assets |
| 5.75B | 5.74B | 5.20B | 4.69B | 4.25B | 3.85B | Total Debt |
| 1.94B | 2.00B | 1.75B | 1.68B | 1.60B | 1.39B | Net Debt |
| 1.77B | 1.39B | 1.54B | 1.56B | 1.39B | 1.28B | Total Liabilities |
| 3.27B | 3.37B | 3.07B | 3.20B | 2.95B | 2.56B | Stockholders Equity |
| 2.48B | 2.37B | 2.12B | 1.49B | 1.30B | 1.29B |
| Cash Flow | Free Cash Flow | ||||
| 974.21M | 340.51M | 214.91M | 90.26M | -32.71M | -100.00M | Operating Cash Flow |
| 974.21M | 996.85M | 1.04B | 740.95M | 462.61M | -39.52M | Investing Cash Flow |
| -782.86M | -343.14M | -543.00M | -555.91M | -373.04M | -93.76M | Financing Cash Flow |
| -197.05M | -219.65M | -394.03M | -273.69M | 2.44M | 93.61M |
Copa Holdings Technical Analysis
Positive
108.67
Price Trends
94.25
Positive
92.64
Positive
91.29
Positive
Market Momentum
3.87
Negative
74.47
Negative
87.69
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CPA, the sentiment is Positive. The current price of 108.67 is above the 20-day moving average (MA) of 99.73, above the 50-day MA of 94.25, and above the 200-day MA of 91.29, indicating a bullish trend. The MACD of 3.87 indicates Negative momentum. The RSI at 74.47 is Negative, neither overbought nor oversold. The STOCH value of 87.69 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CPA.
Copa Holdings Risk Analysis
Copa Holdings disclosed 50 risk factors in its most recent earnings report. Copa Holdings 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 0 New Risks
Copa Holdings Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $4.47B | 7.39 | 26.07% | 6.05% | -1.06% | 5.86% | |
69 Neutral | $1.48B | 55.88 | 1.92% | ― | -5.25% | -49.90% | |
68 Neutral | $6.37B | 19.07 | 8.90% | ― | 20.82% | 47.79% | |
62 Neutral | $7.68B | 13.44 | -21.27% | ― | 1.92% | 36.07% | |
59 Neutral | $17.64B | 36.75 | 5.63% | 2.33% | 3.26% | 27.77% | |
57 Neutral | $4.84B | 20.30 | -16.90% | 5.20% | 13.60% | -28.06% | |
44 Neutral | $1.92B | ― | -11.30% | ― | -3.02% | 66.90% |
* General Sector Average
Performance Comparison
CPA
Copa Holdings
108.67
16.38
17.75%
ATSG
Air Transport Services
22.48
9.51
73.32%
ALK
Alaska Air
52.48
11.83
29.10%
JBLU
JetBlue Airways
5.42
0.24
4.63%
LUV
Southwest Airlines
32.66
7.74
31.06%
AAL
American Airlines
11.64
0.02
0.17%
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.