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1. Company Snapshot

1.a. Company Description

Sun Country Airlines Holdings, Inc., an air carrier company, provides scheduled passenger, air cargo, charter air transportation, and related services in the United States, Latin America, and internationally.As of December 31, 2021, the company operated a fleet of 48 aircraft, including 36 passenger and 12 cargo aircraft.Sun Country Airlines Holdings, Inc.


was founded in 1983 and is headquartered in Minneapolis, Minnesota.

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1.b. Last Insights on SNCY

The recent 3-month performance of Sun Country Airlines Holdings, Inc. was negatively impacted by a series of events. The company's Q4 2024 earnings call transcript revealed a lack of clarity on its business strategy, with CEO Jude Bricker failing to provide a clear vision for the company's future growth. Furthermore, the company's decision to participate in the J.P. Morgan 2025 Industrials Conference and the Barclays 42nd Annual Industrial Select Conference may have distracted from its core operations, potentially leading to a decline in productivity. Additionally, the company's announcement of a secondary public offering of common stock and concurrent share repurchase on February 10, 2025, may have created uncertainty among investors, potentially leading to a decline in the company's stock price. The sale of 6.3 million shares by an affiliate of Apollo Global Management, Inc. may have also contributed to the negative sentiment surrounding the company. The recent earnings release on May 1, 2025, which reported Q1 2025 earnings of $0.72 per share, beating the Zacks Consensus Estimate of $0.70 per share, may have provided some relief to investors. However, the company's revenue growth of 6.1% year-over-year in Q4 2024, driven by higher revenues from lessee payments, holiday products, passenger, and cargo services, may not have been enough to offset the negative sentiment surrounding the company.

1.c. Company Highlights

2. Sun Country Airlines' Q3 2025 Earnings: A Strong Performance

Sun Country Airlines reported total revenue of $255.5 million for the third quarter, a 2.4% increase from the same period in 2024. The airline's GAAP EPS was $0.03, while adjusted EPS was $0.07, slightly below estimates of $0.08. The airline's GAAP pretax margin was 8%, and its adjusted pretax margin was 2%. The cargo expansion is a significant contributor to the airline's revenue growth, with a 60% year-over-year increase in cargo revenue for September and an expected 75% increase by December.

Publication Date: Nov -26

📋 Highlights
  • 13 Consecutive Profitable Quarters: Demonstrated sustained profitability with 13 consecutive quarters of profitability, highlighting operational resilience.
  • Cargo Revenue Surge: Achieved 60% YoY growth in September cargo revenue with all 20 aircraft contracted to Amazon, projecting 75% growth by December.
  • Charter Revenue Expansion: Charter revenue grew 15.6% YoY, with 4% revenue per block hour increase, leveraging flexible capacity allocation between segments.
  • Balance Sheet Strength: Maintained $298.7 million liquidity and $406.1 million net debt, with $15 million remaining in share repurchase authority.
  • Cost and Margin Outlook: CASM rose 10.3% YoY due to scheduled service ASM decline, but expects 5-8% operating margin in Q4 and $300M run rate EBITDA by Q2 2027.

Cargo Expansion Driving Revenue Growth

The airline's cargo expansion is complete, with all 20 aircraft now operating under contract for Amazon. This has resulted in a significant increase in cargo revenue, which is expected to continue to drive revenue growth in the coming quarters. The airline's scheduled service business also saw a 1.6% increase in total revenue per available seat mile (TRASM) for the third quarter, with a 7% increase in September.

Operational Flexibility and Cost Management

The airline's flexible business model allows it to allocate capacity between charter and scheduled service, offsetting some of the underperformance in scheduled service. The airline's cost per available seat mile (CASM) increased 10.3% year-over-year, driven by a 10.2% drop in scheduled service available seat miles (ASMs). However, the airline expects to continue to allocate capacity between segments to maximize profitability and minimize earnings volatility.

Outlook and Guidance

The airline expects fourth quarter total revenue to be between $270 million and $280 million, with an operating margin of 5% to 8%. The airline also expects to achieve $300 million of run rate EBITDA after the second quarter of 2027, operating the fleet it currently has on its balance sheet. With a P/E Ratio of 12.1 and an EV/EBITDA of 3.03, the market seems to have a reasonable expectation of the airline's future performance.

Valuation and Future Prospects

Analysts estimate next year's revenue growth at 8.9%. With a strong balance sheet, a total liquidity of $298.7 million, and net debt of $406.1 million, the airline is well-positioned to drive future growth. The airline's focus on expanding scheduled service flying in peak periods and its strong charter business are expected to drive future revenue growth.

3. NewsRoom

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Sun Country Airlines Holdings, Inc. $SNCY Shares Acquired by Intech Investment Management LLC

Dec -01

Source: defenseworld.net

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Commonwealth of Pennsylvania Public School Empls Retrmt SYS Buys New Position in Sun Country Airlines Holdings, Inc. $SNCY

Nov -29

Source: defenseworld.net

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Sun Country Airlines Holdings, Inc. (NASDAQ:SNCY) Given Consensus Rating of “Moderate Buy” by Brokerages

Nov -25

Source: defenseworld.net

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Sun Country Airlines Holdings, Inc. (NASDAQ:SNCY) Receives Consensus Rating of “Moderate Buy” from Brokerages

Oct -31

Source: defenseworld.net

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Sun Country Airlines Holdings, Inc. (SNCY) Q3 2025 Earnings Call Transcript

Oct -30

Source: seekingalpha.com

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Compared to Estimates, Sun Country Airlines (SNCY) Q3 Earnings: A Look at Key Metrics

Oct -30

Source: zacks.com

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Sun Country Airlines Holdings, Inc. (SNCY) Q3 Earnings and Revenues Miss Estimates

Oct -29

Source: zacks.com

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Sun Country Airlines Reports Third Quarter 2025 Results

Oct -29

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.19%)

6. Segments

Passenger

Expected Growth: 7%

Sun Country Airlines' 7% passenger growth is driven by its low-cost carrier model, expanded route network, and increased flight frequencies. Additionally, the airline's focus on leisure travel, particularly to popular vacation destinations, has contributed to its growth. Furthermore, its modern fleet and improved customer experience have enhanced its competitiveness, attracting more passengers.

Cargo

Expected Growth: 9%

Sun Country Airlines' cargo growth is driven by increasing e-commerce demand, strategic partnerships with logistics providers, and expansion into new markets. Additionally, the airline's focus on temperature-controlled cargo and specialized handling services for high-value goods contributes to its growth. Furthermore, investments in digital platforms and infrastructure enhancements improve operational efficiency, supporting the 9% growth rate.

7. Detailed Products

Scheduled Airline Service

Sun Country Airlines offers scheduled flights to various destinations in the United States, Mexico, the Caribbean, and Central America.

Vacation Packages

Sun Country Vacations offers bundled travel packages that include flights, hotels, and car rentals for a convenient and cost-effective travel experience.

Charter Flights

Sun Country Airlines provides charter flight services for groups, sports teams, and other organizations, offering customized travel solutions.

Cargo Services

Sun Country Airlines offers cargo transportation services for packages and freight, leveraging its existing flight network.

Ancillary Services

The airline offers additional services, such as seat selection, baggage fees, and in-flight meals and beverages, to enhance the travel experience.

8. Sun Country Airlines Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Sun Country Airlines Holdings, Inc. faces moderate threat from substitutes, as customers have limited alternatives for air travel. However, the rise of virtual meetings and remote work could reduce demand for business travel.

Bargaining Power Of Customers

Customers have limited bargaining power due to the lack of alternatives and the airline's ability to differentiate its services. However, large corporate clients may have some negotiating power.

Bargaining Power Of Suppliers

Suppliers, such as aircraft manufacturers and fuel providers, have some bargaining power due to the airline's dependence on their products. However, the airline's size and negotiating power mitigate this threat.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry, including significant capital requirements and regulatory hurdles. Existing airlines also have a strong brand presence and established customer bases.

Intensity Of Rivalry

The airline industry is highly competitive, with many established players competing for market share. Sun Country Airlines Holdings, Inc. faces intense rivalry from major carriers, low-cost carriers, and regional airlines.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 57.56%
Debt Cost 7.97%
Equity Weight 42.44%
Equity Cost 12.06%
WACC 9.71%
Leverage 135.65%

11. Quality Control: Sun Country Airlines Holdings, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Air Transport Services Group

A-Score: 5.1/10

Value: 6.7

Growth: 4.9

Quality: 4.8

Yield: 0.0

Momentum: 9.0

Volatility: 5.0

1-Year Total Return ->

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Stock-Card
Sun Country Airlines

A-Score: 4.8/10

Value: 7.2

Growth: 6.7

Quality: 5.7

Yield: 0.0

Momentum: 6.5

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
Blade Air Mobility

A-Score: 3.9/10

Value: 8.2

Growth: 5.4

Quality: 3.1

Yield: 0.0

Momentum: 4.0

Volatility: 2.3

1-Year Total Return ->

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Stock-Card
Wheels Up Experience

A-Score: 3.7/10

Value: 9.4

Growth: 3.7

Quality: 5.2

Yield: 0.0

Momentum: 3.0

Volatility: 0.7

1-Year Total Return ->

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Stock-Card
Allegiant Travel

A-Score: 3.2/10

Value: 6.1

Growth: 3.0

Quality: 1.7

Yield: 0.0

Momentum: 5.5

Volatility: 2.7

1-Year Total Return ->

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Stock-Card
Frontier

A-Score: 2.8/10

Value: 7.0

Growth: 3.9

Quality: 2.9

Yield: 0.0

Momentum: 2.0

Volatility: 1.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

14.25$

Current Price

14.25$

Potential

-0.00%

Expected Cash-Flows