US Metropolitan Expansion Will Transform Premium Aviation Infrastructure

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AnalystConsensusTarget
Consensus Narrative from 6 Analysts
Published
28 May 25
Updated
08 Aug 25
AnalystConsensusTarget's Fair Value
US$17.25
39.9% undervalued intrinsic discount
08 Aug
US$10.36
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1Y
18.9%
7D
9.7%

Author's Valuation

US$17.3

39.9% undervalued intrinsic discount

AnalystConsensusTarget Fair Value

Key Takeaways

  • Expansion into top metro markets and scarcity of developable airport land drive strong recurring revenue and support premium lease pricing with robust net margins.
  • Vertical integration, unique home basing offering, and access to favorable financing boost operational efficiency, occupancy rates, and long-term profitability.
  • High capital needs, industry competition, market concentration, and regulatory or societal shifts threaten Sky Harbour's growth, margins, and long-term revenue stability.

Catalysts

About Sky Harbour Group
    Operates as an aviation infrastructure development company in the United States.
What are the underlying business or industry changes driving this perspective?
  • Accelerated expansion into high-demand metropolitan markets-such as Phoenix, Dallas, Denver, and recent ground leases in Seattle and Portland-positions Sky Harbour to meet increasing demand for premium private aviation infrastructure and generate substantial recurring lease revenue, directly supporting long-term revenue growth.
  • Scarcity of developable land at major U.S. airports and barriers to entry in site acquisition allow Sky Harbour to capture significant pricing power, enabling lease rates and re-leases at meaningful premiums to industry averages and supporting robust net margins and earnings growth.
  • Vertical integration of construction operations, including in-house manufacturing and general contracting, is expected to drive down build costs, improve efficiency, speed up project delivery, and broaden Sky Harbour's addressable market, which should enhance EBITDA margins and long-term free cash flow conversion.
  • Strengthening brand awareness and a unique, differentiated "Home Basing" product offering have increased inbound demand and enabled premium lease pricing, as well as higher occupancy rates-even exceeding 100% occupancy on some campuses-positively impacting future revenues and earnings consistency.
  • Ongoing infrastructure investment trends in the U.S., supported by public and private capital, provide a stable and appreciating asset base; favorable access to tax-exempt financing further lowers capital costs and enhances long-term profitability through improved debt service coverage and reduced financing expenses.

Sky Harbour Group Earnings and Revenue Growth

Sky Harbour Group Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?
  • Analysts are assuming Sky Harbour Group's revenue will grow by 77.7% annually over the next 3 years.
  • Analysts assume that profit margins will increase from -182.0% today to 19.4% in 3 years time.
  • Analysts expect earnings to reach $19.6 million (and earnings per share of $0.62) by about August 2028, up from $-32.7 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $27.6 million in earnings, and the most bearish expecting $-6.6 million.
  • In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 109.1x on those 2028 earnings, up from -10.7x today. This future PE is greater than the current PE for the US Infrastructure industry at 17.0x.
  • Analysts expect the number of shares outstanding to grow by 7.0% per year for the next 3 years.
  • To value all of this in today's terms, we will use a discount rate of 8.83%, as per the Simply Wall St company report.

Sky Harbour Group Future Earnings Per Share Growth

Sky Harbour Group Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?
  • Aggressive expansion plans require continuous access to capital markets; rising interest rates, volatility in debt markets, or inability to secure affordable financing could constrain growth, elevate interest expense, and negatively impact future revenue growth and net margins.
  • The company's high fixed costs associated with development, construction, and vertical integration mean that any future decline in lease demand or weaker-than-expected occupancy rates would put downward pressure on margins and earnings, especially as new campuses ramp up.
  • Increasing competition from new entrants seeking to replicate Sky Harbour's model-or established FBOs and infrastructure operators diversifying into premium hangar offerings-could erode pricing power, compress lease premiums, and ultimately impact revenue and profitability.
  • Sky Harbour's concentration in a limited number of high-value airports and customer segments creates exposure to localized economic downturns, regulatory changes, or shifts in private/business aviation preferences, which could result in revenue instability and occupancy risks.
  • Long-term secular shifts-including pressures for decarbonization, regulatory action on private aviation, and rising social scrutiny of private jet usage-may lead to reduced demand for business aviation, curbing future utilization of hangar assets and threatening long-term revenue growth.

Valuation

How have all the factors above been brought together to estimate a fair value?
  • The analysts have a consensus price target of $17.25 for Sky Harbour Group based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $25.0, and the most bearish reporting a price target of just $12.0.
  • In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $100.7 million, earnings will come to $19.6 million, and it would be trading on a PE ratio of 109.1x, assuming you use a discount rate of 8.8%.
  • Given the current share price of $10.36, the analyst price target of $17.25 is 39.9% higher.
  • We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

How well do narratives help inform your perspective?

Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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