Earnings Beat: SkyWest, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

It's been a good week for SkyWest, Inc. (NASDAQ:SKYW) shareholders, because the company has just released its latest annual results, and the shares gained 8.2% to US$58.51. Revenues were US$2.9b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$0.77, an impressive 31% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on SkyWest after the latest results.

See our latest analysis for SkyWest

Taking into account the latest results, the most recent consensus for SkyWest from four analysts is for revenues of US$3.33b in 2024. If met, it would imply a meaningful 14% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to soar 687% to US$6.60. In the lead-up to this report, the analysts had been modelling revenues of US$3.28b and earnings per share (EPS) of US$6.00 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 13% to US$54.40. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on SkyWest, with the most bullish analyst valuing it at US$70.00 and the most bearish at US$22.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the SkyWest's past performance and to peers in the same industry. For example, we noticed that SkyWest's rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 14% growth to the end of 2024 on an annualised basis. That is well above its historical decline of 0.3% a year over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 7.4% annually. So it looks like SkyWest is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards SkyWest following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for SkyWest going out to 2026, and you can see them free on our platform here.

It is also worth noting that we have found 2 warning signs for SkyWest (1 is significant!) that you need to take into consideration.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.