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Here's How Much You'd Have If You Invested $1000 in SkyWest a Decade Ago
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For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in SkyWest (SKYW - Free Report) ten years ago? It may not have been easy to hold on to SKYW for all that time, but if you did, how much would your investment be worth today?
SkyWest's Business In-Depth
With that in mind, let's take a look at SkyWest's main business drivers.
SkyWest, founded in 1972, is based in St. George, UT and operates as a regional airline in the United States through its subsidiary SkyWest Airlines. SkyWest is also the holding company of an aircraft leasing company. In January 2019, SkyWest completed the sale of its erstwhile subsidiary, ExpressJet Airlines, to United Airlines joint venture — ManaAir LLC.
SkyWest Airlines offers high-quality regional service to airports located primarily in the Midwestern and Western United States as well as Mexico and Canada. The carrier primarily operates from Chicago (O’Hare), Denver, Houston, Los Angeles, Minneapolis, Phoenix, Salt Lake City, San Francisco and Seattle airports.
Offering scheduled regional airline service under code-share agreements (a deal between airlines allowing them to use each other’s codes on flights among other things) with its airline partners, forms the basis of the company’s operating model. On a daily basis, SkyWest is responsible for operating more than 2,100 flights to multiple destinations in North America.
SkyWest provides regional operations to its major airline partners under long-term, fixed-fee, code-share agreements. The company has codeshare agreements with key airline players like Delta Air Lines, American Airlines, United and Alaska Airlines.
The fixed-fee agreement with these companies obligate the respective major airline partner to refund the amount of fuel costs SkyWest incurs under those agreements.
Under the prorate agreements with Delta, United Airlines, and American Airlines, SkyWest is liable to cover the costs including fuel expenses of operating the concerned flights. Going by historical evidence, these multiple agreements consisting of a mix of fixed-fee and prorate flying arrangements should bolster the company’s operating results.
In 2023, 96.5% of the company's operating revenues of $3 billion came from flying agreements. The rest came from airport customer services and others. As of December 31, 2023, SKYW had a total of 485 aircraft in scheduled service or under contract (which includes 237 E175s, 41 CRJ900s, 118 CRJ700s and 89 CRJ200s in its fleet).
Bottom Line
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in SkyWest ten years ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in November 2014 would be worth $8,009.69, or a 700.97% gain, as of November 5, 2024. Investors should keep in mind that this return excludes dividends but includes price appreciation.
Compare this to the S&P 500's rally of 183.92% and gold's return of 130.29% over the same time frame.
Analysts are forecasting more upside for SKYW too.
SkyWest's fleet-modernization efforts are commendable. SKYW has fleet-related agreements with other airline heavyweights like United Airlines and Alaska Airlines. By 2026-end, SKYW is scheduled to operate 278 E175 aircraft. SKYW's shareholder-friendly approach through share buybacks are commendable. SKYW repurchased 217,000 shares of common stock for $16.3 million during third-quarter 2024. The positive sentiment surrounding the stock is evident from the fact that the Zacks Consensus Estimate for current year earnings has been revised upward in the past 60 days. Partly due to these tailwinds, shares of SKYW have outperformed its industry over the past year. On the flip side, rising operating expenses owing to an increase in employee compensation is likely to weigh on SKYW's bottom line. Low liquidity too does not bode well for the company.
The stock is up 15.96% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 2 higher, for fiscal 2024. The consensus estimate has moved up as well.
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Here's How Much You'd Have If You Invested $1000 in SkyWest a Decade Ago
For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.
What if you'd invested in SkyWest (SKYW - Free Report) ten years ago? It may not have been easy to hold on to SKYW for all that time, but if you did, how much would your investment be worth today?
SkyWest's Business In-Depth
With that in mind, let's take a look at SkyWest's main business drivers.
SkyWest, founded in 1972, is based in St. George, UT and operates as a regional airline in the United States through its subsidiary SkyWest Airlines.
SkyWest is also the holding company of an aircraft leasing company. In January 2019, SkyWest completed the sale of its erstwhile subsidiary, ExpressJet Airlines, to United Airlines joint venture — ManaAir LLC.
SkyWest Airlines offers high-quality regional service to airports located primarily in the Midwestern and Western United States as well as Mexico and Canada. The carrier primarily operates from Chicago (O’Hare), Denver, Houston, Los Angeles, Minneapolis, Phoenix, Salt Lake City, San Francisco and Seattle airports.
Offering scheduled regional airline service under code-share agreements (a deal between airlines allowing them to use each other’s codes on flights among other things) with its airline partners, forms the basis of the company’s operating model. On a daily basis, SkyWest is responsible for operating more than 2,100 flights to multiple destinations in North America.
SkyWest provides regional operations to its major airline partners under long-term, fixed-fee, code-share agreements. The company has codeshare agreements with key airline players like Delta Air Lines, American Airlines, United and Alaska Airlines.
The fixed-fee agreement with these companies obligate the respective major airline partner to refund the amount of fuel costs SkyWest incurs under those agreements.
Under the prorate agreements with Delta, United Airlines, and American Airlines, SkyWest is liable to cover the costs including fuel expenses of operating the concerned flights. Going by historical evidence, these multiple agreements consisting of a mix of fixed-fee and prorate flying arrangements should bolster the company’s operating results.
In 2023, 96.5% of the company's operating revenues of $3 billion came from flying agreements. The rest came from airport customer services and others. As of December 31, 2023, SKYW had a total of 485 aircraft in scheduled service or under contract (which includes 237 E175s, 41 CRJ900s, 118 CRJ700s and 89 CRJ200s in its fleet).
Bottom Line
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in SkyWest ten years ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in November 2014 would be worth $8,009.69, or a 700.97% gain, as of November 5, 2024. Investors should keep in mind that this return excludes dividends but includes price appreciation.
Compare this to the S&P 500's rally of 183.92% and gold's return of 130.29% over the same time frame.
Analysts are forecasting more upside for SKYW too.
SkyWest's fleet-modernization efforts are commendable. SKYW has fleet-related agreements with other airline heavyweights like United Airlines and Alaska Airlines. By 2026-end, SKYW is scheduled to operate 278 E175 aircraft. SKYW's shareholder-friendly approach through share buybacks are commendable. SKYW repurchased 217,000 shares of common stock for $16.3 million during third-quarter 2024. The positive sentiment surrounding the stock is evident from the fact that the Zacks Consensus Estimate for current year earnings has been revised upward in the past 60 days. Partly due to these tailwinds, shares of SKYW have outperformed its industry over the past year. On the flip side, rising operating expenses owing to an increase in employee compensation is likely to weigh on SKYW's bottom line. Low liquidity too does not bode well for the company.
The stock is up 15.96% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 2 higher, for fiscal 2024. The consensus estimate has moved up as well.