We recently compiled a list of the Top 10 Airline Stocks Benefiting From The Air Travel Boom. In this article, we are going to take a look at where SkyWest Inc. (NASDAQ:SKYW) stands against the other airline stocks.
The aviation sector wasn’t short of optimism heading into the new year as air travel demand reached pre-covid highs and the holiday season showed promise. That optimism is now turning into reality as Delta Airlines announced its Q4 earnings result and surprised to the upside. The announcement has spurred a rally across airline stocks as expectations of other companies posting an earnings beat rise.
Delta reported improved operating margins of 12% vs 9.9% from a year ago. It improved the revenue per available seat mile from $0.1995 a year ago to $0.2004 in the last quarter. All of its international regions showed sequential improvement as revenue generated from international passengers grew at 6%. The company has also improved its guidance for the first quarter to $0.85 at the midpoint to the prior $0.76.
We now look at how this may affect other stocks across the industry.
A commercial plane flying overhead with a scenic view of the region in the background.
SkyWest Inc. (NASDAQ:SKYW)
SkyWest Inc. was another airline stock that ran up massively in 2024. Even in the first few days of trading in 2025, the stock is already up 10%. This increasing price has made the valuation a bit expensive for investors’ liking, though the stock is fundamentally strong enough to support these valuations.
For the last 7 quarters, SKYW has been surpassing analyst estimates. Its Q3 earnings report showed a 19% topline growth, surpassing analyst revenue estimates by $16.6 million. Even the EPS came in ahead of expectations, though it was partially supported by the stock buybacks. On the guidance front, the company’s optimism related to full-year block hours is impressive. It first guided for an 8% growth at midpoint in Q1 last year. In the subsequent quarters, the growth target was revised to 10% and 13% respectively.
Backed by these positive developments, the stock continues to rise. There’s no doubt 2025 is set to be a great year for the company. The only question is how much of that optimism is already priced in at these levels.
Overall SKYW ranks 7th on our list of the to airlines stocks benefiting from the air travel boom. While we acknowledge the potential of SKYW as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as SKYW but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.
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