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Controladora Vuela Compania de Aviacion SAB de CV
(NYSE:VLRS)
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Rating:48Neutral
Price Target:
$6.00
▼(-12.92% Downside)
Action:Reiterated
Date:10/28/26
VLRS scores low-to-mid primarily due to stressed financials (return to net losses and extremely high leverage from near-eroded equity), reinforced by weak technical momentum. The latest earnings call was a relative bright spot (guidance outperformance, record revenue, strong operating cash flow and debt reduction), but valuation remains pressured by losses and there is no dividend support.
Positive Factors
Revenue Growth and Demand
Strong revenue growth alongside high load factors indicates durable demand for Volaris’ low-fare network rather than growth driven only by added capacity. Continued passenger adoption supports better aircraft utilization, route economics, and the company’s ability to expand revenue over the next several quarters.
Negative Factors
Extreme Leverage
The very small equity cushion relative to debt materially limits financial flexibility and increases sensitivity to weaker operating conditions. Heavy leverage can absorb a substantial share of future cash generation through debt service, constraining investment choices and leaving less room to manage prolonged disruption.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue Growth and Demand
Strong revenue growth alongside high load factors indicates durable demand for Volaris’ low-fare network rather than growth driven only by added capacity. Continued passenger adoption supports better aircraft utilization, route economics, and the company’s ability to expand revenue over the next several quarters.
Read all positive factors
Controladora Vuela Compania de Aviacion SAB de CV (VLRS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$702.00M
Dividend YieldN/A
Average Volume (3M)420.13K
Price to Earnings (P/E)―
Beta (1Y)1.33
Revenue Growth18.55%
EPS Growth-248.20%
CountryUS
Employees7,098
SectorIndustrials
Sector Strength72
IndustryAirlines, Airports & Air Services
Share Statistics
EPS (TTM)-1.91
Shares Outstanding116,597,670
10 Day Avg. Volume586,712
30 Day Avg. Volume420,129
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)3.88
Price to Sales (P/S)0.34
P/FCF Ratio1.36
Enterprise Value/Market Cap5.30
Enterprise Value/Revenue1.05
Enterprise Value/Gross Profit12.06
Enterprise Value/Ebitda5.14
Forecast
1Y Price Target
$8.67Price Target Upside25.79% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)-2.07
Revenue Forecast (FY)$3.66B
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., operating through its subsidiaries such as Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V., offers comprehensive air transportation for individuals, cargo, and postal shipments wi...
How the Company Makes Money
Volaris primarily makes money from (1) passenger ticket revenue and (2) ancillary revenue tied to its ultra-low-cost carrier (ULCC) model.
1) Passenger ticket revenue (base fares)
- The company sells seats on scheduled flights. Revenue is driven ...
Controladora Vuela Compania de Aviacion SAB de CV Earnings Call Summary
Earnings Call Date:Oct 26, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Mar 01, 2027
Earnings Call Sentiment Positive
The call was predominantly positive. Volaris exceeded profitability guidance, achieved record quarterly revenue, improved unit revenue, generated strong operating cash flow, reduced debt, and continued progress on fleet recovery and network optimization. These strengths were partly offset by higher fuel costs, elevated total CASM, ongoing aircraft groundings and temporary maintenance-related costs, weaker domestic fuel recapture, higher Mexican navigation costs, and pending regulatory matters.Positive Updates
Profitability Exceeded Guidance
Volaris delivered positive EBIT, an EBITDA margin of 25.3% versus 22% guidance, and exceeded its financial guidance despite average jet fuel of $3.67 per gallon versus the $3.50 guidance assumption.
Negative Updates
Higher Fuel Costs
Average economic fuel cost per gallon increased 57% year over year. Jet fuel averaged $3.67 per gallon versus the $3.50 guidance assumption, contributing approximately $16 million in additional fuel costs.
Read all updates
Q3-2026 Updates
Positive
Negative
Profitability Exceeded Guidance
Volaris delivered positive EBIT, an EBITDA margin of 25.3% versus 22% guidance, and exceeded its financial guidance despite average jet fuel of $3.67 per gallon versus the $3.50 guidance assumption.
Read all positive updates
Company Guidance
For the fourth quarter of 26, Volaris expects ASM growth of roughly 4% year over year, TRASM of around 10.99¢, CASM ex fuel of approximately 6.50¢, an EBITDA margin of around 20%, an average foreign exchange rate of around 18.17 per U. S. Dollar, and an average US Gulf Coast jet fuel price of approximately $4.40 per gallon, including approximately $0.4 in nonrecurring costs; for full year 2026, it expects ASM growth of approximately 5% year over year, EBITDAR margin of around 21%, and CapEx of around $350 million. For full year 2027, it expects low single digit ASM growth, with domestic capacity to contract and international capacity to expand; management also described a slight decline, low to mid single digit decline in domestic capacity and said it could grow by 3% or reduce capacity by 3% depending on market conditions. AOGs are expected to remain in the low to mid-20s until next summer, with the situation expected to normalize by mid 28, while lease payments are expected to be approximately $50 million lower than in full year 2026 and lease liabilities to decline from approximately $3.2 billion to $2.8 billion by year end 2027.Controladora Vuela Compania de Aviacion SAB de CV Financial Statement Overview
Summary
Income Statement
41
Neutral
Balance Sheet
18
Very Negative
Cash Flow
72
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.55B | 3.04B | 3.14B | 3.26B | 2.85B | 2.20B |
| Gross Profit | 308.84M | 173.84M | 515.50M | 505.20M | 245.50M | 548.84M |
| EBITDA | 724.39M | 850.27M | 1.07B | 721.02M | 477.05M | 600.99M |
| Net Income | -219.87M | -103.87M | 126.38M | 7.82M | -80.22M | 106.45M |
Balance Sheet | ||||||
| Total Assets | 5.80B | 5.64B | 5.70B | 5.15B | 4.47B | 4.01B |
| Cash, Cash Equivalents and Short-Term Investments | 823.00M | 774.00M | 945.18M | 776.48M | 711.85M | 745.41M |
| Total Debt | 3.79B | 3.86B | 3.87B | 3.54B | 2.98B | 2.73B |
| Total Liabilities | 5.76B | 5.37B | 5.34B | 4.90B | 4.23B | 3.69B |
| Stockholders Equity | 42.00M | 263.00M | 364.81M | 242.59M | 234.74M | 314.95M |
Cash Flow | ||||||
| Free Cash Flow | 712.82M | 750.00M | 506.65M | 238.69M | 259.67M | 589.17M |
| Operating Cash Flow | 963.24M | 750.00M | 1.09B | 729.83M | 613.60M | 785.36M |
| Investing Cash Flow | -58.52M | -89.00M | -472.00M | -462.04M | -130.69M | -134.65M |
| Financing Cash Flow | -982.45M | -819.00M | -472.00M | -214.39M | -513.09M | -435.18M |
Controladora Vuela Compania de Aviacion SAB de CV Technical Analysis
Neutral
6.89
Price Trends
6.45
Negative
7.35
Negative
7.72
Negative
Market Momentum
-0.21
Negative
47.72
Neutral
61.88
Neutral
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 6.89 is above the 20-day moving average (MA) of 6.06, above the 50-day MA of 6.45, and below the 200-day MA of 7.72, indicating a neutral trend. The MACD of -0.21 indicates Negative momentum. The RSI at 47.72 is Neutral, neither overbought nor oversold. The STOCH value of 61.88 is Neutral, 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 Risk Analysis
Controladora Vuela Compania de Aviacion SAB de CV disclosed 70 risk factors in its most recent earnings report. Controladora Vuela Compania de Aviacion SAB de CV 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
Controladora Vuela Compania de Aviacion SAB de CV Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
59 Neutral | $21.28B | 20.60 | 14.39% | 1.66% | 14.49% | 205.66% | |
51 Neutral | $2.22B | -6.07 | 42.95% | ― | 9.55% | -83.46% | |
48 Neutral | $702.00M | -3.20 | -151.82% | ― | 18.55% | -248.20% | |
48 Neutral | $1.42B | -3.43 | -186.46% | ― | 23.97% | -200.15% | |
45 Neutral | $1.08B | -1.06 | -58.36% | ― | 9.87% | -104.29% | |
44 Neutral | $719.62M | 659.09 | -0.38% | 1.06% | 12.03% | 46.01% |
* Industrials Sector Average
VLRS
Controladora Vuela Compania de Aviacion SAB de CV
6.10
-0.30
-4.69%
JBLU
JetBlue Airways
2.85
-1.23
-30.23%
LUV
Southwest Airlines
43.47
13.35
44.31%
ULCC
Frontier Group Holdings
6.17
2.35
61.52%
AERO
Grupo Aeromexico, S.A.B. de C.V. Unsponsored ADR
15.21
-5.14
-25.26%
AZUL
Azul S.A. Sponsored ADR
3.77
-476.62
-99.22%
Controladora Vuela Compania de Aviacion SAB de CV Corporate Events
Volaris Posts 32% YoY Revenue Surge in Q3 2026 While Maintaining Conservative Hedging Strategy
Oct 27, 2026
On October 26, 2026, Volaris reported its third-quarter 2026 results, highlighting revenue of about $1 billion, up 32% year-on-year, underscoring strong operating momentum in its core markets. The filing also detailed that all existing derivatives...
Volaris Posts Higher September Load Factor as International Traffic Climbs
Oct 6, 2026
Volaris, the ultra-low-cost carrier listed in New York and Mexico, has expanded from 5 routes and 4 aircraft at its 2006 launch to more than 246 routes and 154 aircraft, connecting 46 Mexican cities and 34 destinations across the U.S., Central and...
Volaris Shareholders Approve All Agenda Items at September 3 Meetings
Sep 4, 2026
On September 4, 2026, Volaris reported that shareholders at general ordinary and general extraordinary meetings held on September 3, 2026, approved all items presented on the agendas. The unanimous authorization of the agenda items signals strong ...
Volaris Posts Strong August 2026 Traffic With 84% Load Factor, Plans Capacity Moderation for Fall
Sep 3, 2026
On September 3, 2026, Volaris reported its preliminary traffic figures for August 2026, highlighting continued network expansion in both domestic and international markets. The airline carried 3.2 million passengers in the month, reflecting strong...
Volaris Calls General and Extraordinary Shareholders’ Meeting for September 3, 2026
Aug 18, 2026
Ultra-low-cost carrier Volaris, operated by Controladora Vuela Compañía de Aviación, serves Mexico, the U.S., Central and South America with a large, young fleet and more than 251 routes. The airline targets cost-conscious business ...
Volaris July Traffic Surges With 88% Load Factor, Signals Capacity Trim for Fall
Aug 5, 2026
In a filing dated August 5, 2026, Volaris reported strong July 2026 traffic performance, underscoring robust demand across its Mexican domestic and international network. The carrier’s available seat miles rose 14.4% year-on-year while reven...
Volaris Publishes 2025 Integrated Annual Report With Performance Caution
Jul 31, 2026
On July 31, 2026, Volaris announced the publication of its 2025 Integrated Annual Report, titled “Ready for what’s next,” on the company’s investor relations website. The document, covering the prior year, is presented as a...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.