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

• Market Cap: $566.06M
• Dividend Yield: N/A
• Average Volume (3M): 831.05K
• Price to Earnings (P/E): 13.5
• Beta (1Y): 1.15
• Revenue Growth: -7.43%
• EPS Growth: -62.49%
• Country: US
• Employees: 6,901
• Sector: Industrials
• Sector Strength: 91
• Industry: Airlines, Airports & Air Services
• EPS (TTM): -0.44
• Shares Outstanding: 116,597,670
• 10 Day Avg. Volume: 763,560
• 30 Day Avg. Volume: 831,050
• PEG Ratio: -0.19
• Price to Book (P/B): 1.78
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.56
• Enterprise Value/Market Cap: 6.26
• Enterprise Value/Revenue: 0.28
• Enterprise Value/Gross Profit: 6.54
• Enterprise Value/Ebitda: 1.77
• 1Y Price Target: $6.63
• Price Target Upside: 35.86% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10

• Rating: 65 Neutral
• Price Target: $5.00 ▲(2.46%Upside)

Volaris is navigating through a challenging environment with a focus on operational efficiency and strategic initiatives, such as strong ancillary revenue and load factors. However, high leverage, declining revenues, and reduced growth guidance pose significant risks. The stock's valuation is reasonable, but technical indicators suggest only modest near-term upside.

Positive Factors

Financial Strategy

The company has a strong cash position, which is expected to help it navigate the current challenging period.

Market Positioning

Capacity discipline in the market and a sequentially better yield environment in the second half are seen as positive developments.

Partnerships

Volaris also announced that it will be signing a code-share with Copa for traffic between Mexico and South/Central America.

Negative Factors

Financial Performance

Material cuts to 2025 and 2026 EBITDAR estimates are being made, influenced by macro and yield uncertainty.

Investor Confidence

Investors are skeptical about the sustainability of Volaris' margins once grounded capacity returns to operation.

Revenue Challenges

A significant drop in yields and ancillary revenue per passenger has negatively affected the company's revenue metrics.

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. (VLRS), commonly known as Volaris, is a prominent low-cost airline operating primarily in Mexico, with additional routes in the United States and Central America. Volaris focuses on providing affordable air travel through efficient operations, a point-to-point route network, and a streamlined service model. The airline targets cost-conscious travelers, offering a no-frills flying experience with optional add-on services.

How the Company Makes Money

Volaris generates its revenue primarily through passenger ticket sales, leveraging its low-cost carrier model to attract a large volume of budget-conscious travelers. The airline offers a basic fare that covers essential travel needs, with a range of ancillary services available for an additional fee. These ancillary services include seat selection, checked baggage, in-flight refreshments, and priority boarding, which contribute significantly to the company's earnings. Volaris also benefits from partnerships with various service providers, such as hotels and car rental companies, earning commission-based revenue. The airline's cost-efficient operations, including a fuel-efficient fleet and high aircraft utilization rates, further support its profitability.

Controladora Vuela Compania de Aviacion SAB de CV Financial Statement Overview

Summary

The company exhibits a complex financial profile with improving profitability and strong cash flow management offset by high leverage and declining revenue growth. Operational efficiencies are evident, but high debt levels and declining gross margins pose risks.

Income Statement

The company shows a mixed performance with a declining revenue growth trend, dropping from $3.26 billion in 2023 to $3.05 billion in TTM 2025. Gross profit margin has decreased significantly in TTM 2025, indicating potential challenges in maintaining profitability. However, the net profit margin in TTM 2025 has improved to 1.38% from previous losses, showing signs of recovering profitability. EBIT and EBITDA margins have also improved slightly, indicating better cost management.

Balance Sheet

The balance sheet reflects high leverage with a debt-to-equity ratio of approximately 12.15 in TTM 2025, which poses a financial risk. Return on equity (ROE) improved to 13.33% in TTM 2025, reflecting better utilization of equity but still constrained by high debt levels. The equity ratio remains low, indicating limited buffer against liabilities.

Cash Flow

Cash flow analysis reveals strong operational cash generation with an operating cash flow to net income ratio of 23.45 in TTM 2025. Free cash flow has shown significant growth compared to previous years, which is a positive indicator for future liquidity and investment capabilities. The company demonstrates efficient cash management despite ongoing challenges.

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

Controladora Vuela Compania de Aviacion SAB de CV Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 4.88
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VLRS, the sentiment is Neutral. The current price of 4.88 is above the 20-day moving average (MA) of 4.57, above the 50-day MA of 4.47, and below the 200-day MA of 6.31, indicating a neutral trend. The MACD of 0.07 indicates Negative momentum. The RSI at 57.70 is Neutral, neither overbought nor oversold. The STOCH value of 85.77 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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	77 Outperform	$687.98M	13.23	9.46%	―	2.24%	-20.24%
Sector *	71 Outperform	¥254.45B	13.41	8.48%	3.03%	6.33%	13.08%
VLRS	65 Neutral	$566.06M	13.51	14.19%	―	-7.43%	-62.49%
ULCC	53 Neutral	$947.50M	14.07	12.71%	―	5.99%	―
ALGT	52 Neutral	$995.25M	―	-17.12%	1.10%	1.54%	-466.46%
FLYX	47 Neutral	$192.31M	28.86	26.01%	―	―	―