Analysts Have Been Trimming Their Frontier Group Holdings, Inc. (NASDAQ:ULCC) Price Target After Its Latest Report

Shareholders might have noticed that Frontier Group Holdings, Inc. (NASDAQ:ULCC) filed its first-quarter result this time last week. The early response was not positive, with shares down 6.8% to US$10.61 in the past week. Revenues were in line with expectations, at US$605m, while statutory losses ballooned to US$0.56 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for Frontier Group Holdings

Taking into account the latest results, the most recent consensus for Frontier Group Holdings from nine analysts is for revenues of US$3.29b in 2022 which, if met, would be a major 37% increase on its sales over the past 12 months. Frontier Group Holdings is also expected to turn profitable, with statutory earnings of US$0.20 per share. In the lead-up to this report, the analysts had been modelling revenues of US$3.15b and earnings per share (EPS) of US$0.25 in 2022. While next year's revenue estimates increased, there was also a large cut to EPS expectations, suggesting the consensus has a bit of a mixed view of these results.

The analysts also cut Frontier Group Holdings' price target 10.0% to US$18.00, implying that lower forecast earnings are expected to have a more negative impact than can be offset by the increase in sales. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. The most optimistic Frontier Group Holdings analyst has a price target of US$20.00 per share, while the most pessimistic values it at US$15.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. For example, we noticed that Frontier Group Holdings' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 53% growth to the end of 2022 on an annualised basis. That is well above its historical decline of 2.2% 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 11% annually. So it looks like Frontier Group Holdings is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Frontier Group Holdings. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Frontier Group Holdings' future valuation.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Frontier Group Holdings going out to 2024, and you can see them free on our platform here..

Plus, you should also learn about the 1 warning sign we've spotted with Frontier Group Holdings .

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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.