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

• Market Cap: $806.89M
• Dividend Yield: N/A
• Average Volume (3M): 490.76K
• Price to Earnings (P/E): 12.1
• Beta (1Y): 1.01
• Revenue Growth: -7.05%
• EPS Growth: -128.03%
• Country: US
• Employees: 6,901
• Sector: Industrials
• Sector Strength: 72
• Industry: Airlines, Airports & Air Services
• EPS (TTM): -0.54
• Shares Outstanding: 116,597,670
• 10 Day Avg. Volume: 556,761
• 30 Day Avg. Volume: 490,756
• PEG Ratio: <0.01
• Price to Book (P/B): 2.35
• Price to Sales (P/S): 0.27
• P/FCF Ratio: 0.79
• Enterprise Value/Market Cap: 4.41
• Enterprise Value/Revenue: 1.18
• Enterprise Value/Gross Profit: 7.60
• Enterprise Value/Ebitda: 4.54
• 1Y Price Target: $8.14
• Price Target Upside: 17.46% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 8

• Rating: 64 Neutral
• Price Target: $6.50 ▼(-6.20% Downside)

VLRS's overall stock score is primarily influenced by its financial performance, which is challenged by profitability issues and high leverage. However, strong cash flow generation provides some stability. Technical analysis shows positive momentum, but valuation remains a concern due to negative earnings. The absence of earnings call data and corporate events means these factors do not influence the score.

Positive Factors

Operational Efficiency

A strong EBITDA margin indicates effective cost management and operational efficiency, which can support profitability even amid revenue challenges.

Cash Flow Generation

Robust operating cash flow provides liquidity and financial flexibility, enabling the company to manage debt and invest in growth opportunities.

Strategic Risk Management

Effective risk management through hedging stabilizes financial performance, reducing volatility from external factors like fuel prices and currency fluctuations.

Negative Factors

Profitability Challenges

Sustained profitability challenges can hinder reinvestment and growth, impacting long-term competitiveness and shareholder value.

High Leverage

Excessive leverage increases financial risk and limits flexibility, potentially affecting the company's ability to weather economic downturns.

Revenue Contraction

Declining revenue growth indicates market challenges and could pressure margins, necessitating strategic adjustments to regain momentum.

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

Company Description

Controladora Vuela Compañía de Aviación, S.A.B. de C.V., through its subsidiaries, Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V., provides air transportation services for passengers, cargo, and mail in Mexico and internationally. The company operates approximately 410 daily flights on routes connecting 43 cities in Mexico, 22 cities in the United States, and 3 cities in Central America. As of December 31, 2020, it operated through a fleet of 86 aircraft. The company also offers merchandising, recruitment and payroll, travel agency, and loyalty program services. Controladora Vuela Compañía de Aviación, S.A.B. de C.V. was incorporated in 2005 and is headquartered in Mexico City, Mexico.

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 profitability challenges amidst cost pressures and revenue contraction. High leverage and low equity present financial risks, but strong cash flow generation provides a cushion. The company needs to focus on improving profitability and managing debt to enhance financial stability.

Income Statement

VLRS shows mixed performance in its income statement. The company has a negative net profit margin in TTM, indicating challenges in profitability, with net income turning negative compared to the previous year. Gross profit margin stands at 15.5% in TTM, down from 35.3% annually, reflecting cost pressures. Revenue growth is negative in the latest period at -3.91%, indicating a contraction in sales. However, EBITDA margin remains healthy at 25.9%, showing operational efficiency.

Balance Sheet

The balance sheet reveals significant leverage, with a high debt-to-equity ratio of 14.92 in TTM, indicating heavy reliance on debt financing. The equity ratio is low at 4.53%, suggesting limited equity financing. Return on equity is negative in TTM due to negative net income. Although the company maintains a substantial asset base, high liabilities pose a risk to financial stability.

Cash Flow

Cash flow analysis shows resilience with positive free cash flow in TTM, although it decreased from the previous year. Free cash flow to net income ratio is negative due to negative net income, but operating cash flow remains strong at 817 million USD. The company demonstrates capacity to generate cash from operations, supporting liquidity despite profit challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.02B	3.14B	3.26B	2.85B	2.18B	1.11B
Gross Profit	468.00M	1.11B	505.20M	246.00M	544.61M	12.77M
EBITDA	783.00M	1.07B	722.52M	477.05M	600.99M	143.59M
Net Income	-31.00M	126.00M	7.82M	-30.00M	106.45M	―
Balance Sheet
Total Assets	5.61B	5.70B	5.15B	4.52B	4.01B	3.43B
Cash, Cash Equivalents and Short-Term Investments	788.00M	954.00M	776.48M	704.98M	745.38M	507.82M
Total Debt	3.79B	3.87B	3.54B	2.98B	2.73B	2.49B
Total Liabilities	5.36B	5.34B	4.90B	4.24B	3.69B	3.29B
Stockholders Equity	254.00M	365.00M	242.59M	277.00M	319.16M	140.54M
Cash Flow
Free Cash Flow	739.19M	1.09B	238.69M	260.06M	580.97M	67.30M
Operating Cash Flow	817.06M	1.09B	729.83M	614.00M	775.38M	243.28M
Investing Cash Flow	-256.28M	-472.00M	-462.04M	-131.00M	―	―
Financing Cash Flow	-543.36M	-472.00M	-214.39M	-513.00M	―	―

Controladora Vuela Compania de Aviacion SAB de CV Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 6.93
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 6.93 is above the 20-day moving average (MA) of 6.58, above the 50-day MA of 6.17, and above the 200-day MA of 5.93, indicating a bullish trend. The MACD of 0.26 indicates Negative momentum. The RSI at 61.81 is Neutral, neither overbought nor oversold. The STOCH value of 39.87 is Neutral, 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	73 Outperform	$631.27M	11.18	9606.85%	―	3.76%	17.44%
LUV	68 Neutral	$16.97B	48.59	4.90%	2.21%	1.64%	284.24%
VLRS	64 Neutral	$806.89M	12.09	-12.00%	―	-7.05%	-128.03%
ALGT	55 Neutral	$1.10B	-3.94	-27.09%	―	3.17%	-1689.03%
JBLU	45 Neutral	$1.71B	-4.43	-16.03%	―	-1.90%	61.06%
ULCC	43 Neutral	$992.48M	-30.90	-6.52%	―	4.60%	49.81%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Controladora Vuela Compania de Aviacion SAB de CV Corporate Events

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.

Volaris Reports Q2 2025 Financial Results and Risk Management Strategies

On July 21, 2025, Volaris released its financial results for the second quarter of 2025, highlighting its strategic use of derivative financial instruments to manage financial risks such as fuel price fluctuations, foreign currency exposure, and interest rate variations. The company employs a conservative hedging policy, ensuring that all derivative transactions are aligned with its primary financial positions and are subject to rigorous internal and external audits. This approach aims to minimize potential adverse effects on earnings and working capital, thereby maintaining stability in its financial operations.

Volaris Reports June 2025 Traffic Results with 84% Load Factor

On July 8, 2025, Volaris reported its June 2025 traffic results, highlighting a load factor of 83.9%. The airline experienced a slight increase in available seat miles (ASMs) by 0.6%, but a decrease in revenue passenger miles (RPMs) by 1.4%. Despite these declines, Volaris transported 2.4 million passengers in June. The company noted strong domestic demand and resilience in transborder demand amidst evolving U.S. immigration policies. As the peak season approaches, Volaris anticipates improved demand and is preparing for increased summer traffic.